Aceh

BIN lobbying for GAM to be listed as terrorist organisation

Detik.com - June 17, 2004

M. Rizal Maslan, Jakarta - The State Intelligence Agency (BIN) believes that arrest of three Free Aceh Movement (GAM) leaders in Sweden is a political victory and they now need to lobby for GAM to be included in the list of international terrorist organisations.

"This is an [important] moment for us in achieving a political victory. Therefore we must use this moment so that GAM's relationship with the international [community] is severed and their credibility declines".

This issue was raised by the BIN chief A.M. Hendropriyono following a special politics and security meeting at the offices of the coordinating minister of politics and security on Jalan Medan Merdeka Barat in Central Jakarta on Thursday June 17.

"If this is followed up with sanctions, it means GAM has been isolated. They will have be no more international sponsors", he said.

If they are convicted he continued, it means that GAM is a terrorist organisation because they have blatantly violated Swedish law which is accepted internationally. BIN has asked the Swedish Attorney General to handle the case through legal means. If this succeeds, there will be political benefits.

[Excelled GAM leader] Hasan Tiro was not detained because of poor health and only Zaini Abdullah and Malik Muhammad have been detained? "Yeah, that's up to the Swedes. We can't interfere in the laws of another country. We can only assist", said Hendropriyono.

When asked about what new information BIN has on the case he explained that the information which is need by the Swedish prosecution and police is different from that held by BIN.

"As far as I am concerned, it must be proven to be a transnational crime. This includes terrorism and the weapons in their possession. What remains is to lobby [and see] how it is received by the international [community] so that GAM will be included in the list of international terrorist organisations", said Hendropriyono. (sss)

[Translated by James Balowski.]

The betrayal of Aceh

The Times - June 20, 2004

Farish A. Noor -- Aceh has played a crucial role in the development of Indonesian national identity and the Indonesian nation-state. But after sacrificing so much to the idea and ideals of Indonesia, it appears that the struggle of the people of Aceh is far from over

For nearly three decades the people of Aceh, the northernmost province of the Indonesian island of Sumatra, have been paying the price for trying to maintain their sense of identity and history. This week, three key leaders of the Aceh movement -- Hasan Tiro, Malik Mahmud and Abdullah Zaini -- were arrested by the authorities in Sweden, the country they had fled to in search of exile and asylum in the 1980s.

Though the Swedish authorities have cited unspecified "crimes violating international law" as the reason for these arrests, many Acehnese activists and human rights groups claim that Jakarta is behind the detentions. Worse, with Indonesia under pressure to play according to Washington's rules in the so-called "war on terror", the label "terrorist" has now been put on the Free Aceh Movement (GAM) as well. Thus far the outcry against the arrests have been muted, and Indonesia claims the detentions are part of its efforts to bring peace and stability to the country. But few observers have cared to enquire about the tortured history of Aceh, or ask the obvious question of why Aceh has been fighting for their rights for so long.

Foreign observers of Indonesian politics tend to forget that Indonesia" is an artificial entity. Spanning the geographical space of Europe, it comprises more than 350 recognised ethnic groups and 250 linguistic communities. Among the communities of present-day Indonesia, one community in particular stands out for its contribution to the country's independence struggle against the Dutch; its transnational linkages to the rest of the world and its cosmopolitan make-up: Aceh.

Situated at the northernmost tip of the great island of Sumatra, the province of Aceh covers the territory of the once-great Kingdom of Aceh. The Acehnese themselves have often been described by Dutch colonial administrators and Oriental scholars as haughty, proud of their achievements and fiercely independent in their outlook.

Being located at the northwestern most fringe of Indonesia meant that Aceh was the one kingdom that was most exposed to, and consequently influenced by, external cultural influences from the West. Aceh was also a major centre of Islamic learning, politics and culture, blending together Acehnese-Malay, Indian, Arab and Turkish influences into what would later become a cosmopolitan expression of Islamic normativity and culture.

But the people of Aceh remained unique in many respects and were proud of their own sense of identity. The Arab travellers who visited the kingdom were shocked to discover that the Acehnese were a matrilineal people and that in Acehnese society women played a prominent role in politics and social life: the "kingdom" was once ruled by a succession of female "Sultans" and Aceh even had a woman as the head of its royal navy -- Laksamana Koemalahayati -- surely a first in Muslim history!

Aceh's moment of glory came at the turn of the 20th century when the Dutch who had consolidated their rule over the rest of the Dutch East Indies made the fatal mistake of trying to conquer and domesticate Aceh as well. This led to the great "Aceh war", which dragged on for three decades and practically bled the Dutch colonial forces dry. Aceh's resistance to the Dutch inspired other Indonesians and Southeast Asians to rise up in revolt against the colonial masters. The Dutch colonial government in turn faced their first "Vietnam", and the conflict was so costly that it nearly bankrupted the colonial economy of the Netherlands. At the outset of World War II, the invading Japanese understood the power and influence of the Acehnese on the rest of the region, and plans were made to smuggle a group of Acehnese freedom fighters back into Aceh via Malaya, with the help of anti-British elements in that British colony. During WWII it was Acehnese resistance that proved crucial in the battle for Sumatra and by extension Southeast Asia. The Acehnese expected their sacrifices to be rewarded by the post-colonial government in due course.

This was not to be: When the leaders of Indonesia Sukarno and Mohammad Hatta declared Indonesia independent in 1945, Aceh was given the honorary status of a special province. But it was also integrated into the Indonesian central state system and the local rulers of Aceh were stripped of any real power. Indonesia's brief flirtation with democracy ended when Sukarno declared himself supreme leader of Indonesia saying that democracy "could not work" in the country.

By the late 1950s, Indonesia began its slide into authoritarianism with Sukarno declaring "guided democracy" to be the new philosophy of the state. In the 1960s and 1970s Indonesia's fortunes rose and fell as the outer regions felt themselves marginalised by the central government. The discovery of crucial oil and gas reserves in Aceh made the region even more important to Indonesia's national development, but the Acehnese themselves felt cheated as the Indonesian oil conglomerate Pertamina simply took away their resources while spending little on the development of Aceh itself.

These factors led to the rise of an increasingly vocal and assertive Aceh regional movement, and the birth of the Gerakan Aceh Merdeka (Free Aceh Movement) that came under the leadership of men like Hasan Tiro. Citing the United Nations General Assembly Resolution 2711-XXV (adopted on October 14, 1970) that recognised the right for self-determination on behalf of colonised peoples, GAM began its struggle for independence in the 1970s. But GAM's struggle incurred a heavy cost on the people of Aceh. Indonesia turned the province into a virtual battle zone with thousands of Indonesian army personnel being sent there to eliminate the so-called "terrorists". In the early 1980s the Indonesian Elite Kospassus force scored a coup by kidnapping one of the religious leaders of the Aceh movement and transporting him to Jakarta.

Throughout this period, the cost of the struggle in Aceh has been high in terms of abuses of human rights and the loss of innocent lives. But Indonesia was then under the helm of President Suharto, a key trusted ally to Washington, the Western bloc and western economic interests. When Indonesia forcibly annexed East Timor in 1974 the Americans were muted in their protests, as they were in 1965 when Suharto came to power following the mass killings of opposition communists in the country.

The rest, as they say, is history. But what a bloody history it is too. Since the mid-1970s the Indonesian army has launched several "security campaigns" in Aceh, such as Operations Rencong I and II, leading to the killing of more than 10,000 civilians and the destruction of much of the social infrastructure there, including schools and hospitals. It was only in 1998, when the government of the dictator Suharto was on the verge of collapse, that the true extent of the horrific murders and abuses in Aceh came to light, with scores of unidentified mass graves being "recovered" and exposed by the new independent media of post- Suharto Indonesia. Many had hoped that these revelations would lead to the final recognition of the legitimate demands of the Acehnese, not least their fundamental demand to receive some compensation for the exploitation of the resources in their territory and for more basic development. But following September 11 and the US discourse on "terrorism" the cause of Aceh has once more been relegated to the margins. What is worse, the Acehnese movement has now been presented as being terrorist instead, leading to further demonisation of GAM and culminating in the recent arrest of its leaders.

Aceh has played a crucial role in the development of Indonesian national identity and the Indonesian nation-state. But the tide of world politics these days is less sympathetic to local movements struggling for autonomy and self-determination. After sacrificing so much to the idea and ideals of Indonesia, it appears that the struggle of the people of Aceh is far from over. That, in the end, is Indonesia's loss as much as it is Aceh's.

[Dr Farish A Noor is a Malaysian political scientist and human rights activist.]

Will arrest of Aceh rebel leaders hurt group?

Straits Times - June 19, 2004

Mafoot Simon -- In an apartment in the Stockholm suburb of Alby a year ago, a leader of the movement that has fought a violent struggle with Jakarta authorities for a separate state in Aceh, Sumatra, told an interviewer that he hoped Sweden would not buckle under Indonesian pressure.

Only weeks earlier, Sweden had rebuffed Indonesia's request to extradite GAM leaders, including its ageing founder, Mr Hasan di Tiro, to face trial in Indonesia for acts of violence "as long as they do not break Swedish law or violate international law".

This Tuesday, however, Swedish authorities announced the arrest of three GAM leaders who had been residing in Alby for "grave breaches of international law". They were not named.

But the Indonesian government named them as Mr Malik, 64, Dr Zaini Abdullah, 63, and Mr Hasan, 80. The first two are prime minister and foreign minister respectively in GAM's shadow Cabinet, while Mr Hasan was the first to internationalise the struggle in 1976.

Clearly, Swedish prosecutors found enough evidence from investigations in Aceh in March this year to change their minds about GAM leaders on Swedish soil. Their visit to Aceh followed a formal complaint from Jakarta that GAM leaders were using Sweden as a base to organise armed operations in Aceh.

The Swedish investigation team interviewed 23 people, mostly Aceh separatists, to trace links between the exiles and violence in the province.

The arrests led Jakarta to praise Stockholm's "steadfast commitment to ending armed rebellion, acts of violence and acts of terrorism perpetrated by GAM in Aceh and other regions of Indonesia". Jakarta also said on Tuesday that it was ready to provide more evidence to Stockholm.

Will the arrests cripple GAM though? Some analysts believe not.

Dr Kirsten E. Schulze of the London School of Economics and Political Science is author of The Free Aceh Movement (GAM): Anatomy Of A Separatist Organisation. Replying to The Straits Times, she said the Stockholm arrests were "a blow to the morale", but will probably not affect the armed struggle on the ground "dramatically" as GAM's senior command structure in Aceh remains fully intact and supply lines have not been severed. She added: "And Acehnese culture is not one of surrender."

The Acehnese have had a history of fighting for their independence since the first Dutch force of 3,000 men landed on Aceh shores in April 1873, launching the Aceh-Dutch War which lasted more than 40 years.

Though the Acehnese were defeated, "the spirit of freedom was still alive among its people, as was manifested again in the 1940s", Acehnese academic Teuku Ibrahim Alfian noted in a recent conference paper.

In the 1950s, some Acehnese rebelled against Jakarta's rule and declared Aceh part of the Islamic State of Indonesia (NII) that had been proclaimed by a leader in West Java several years earlier.

But the latest arrests do have some impact. Many GAM activists used to see their leaders as "untouchable" because they were abroad, and also believed the movement had considerable international support and sympathy. "Both those beliefs will have been shaken," Dr Schulze said.

Supporters fighting back

Academic Muhammad Isa Sulaiman of the Universitas Syiah Kuala in Aceh, who is currently with the Asia Research Institute in the National University of Singapore, agreed that the arrests, "if so proven", might have some impact on GAM fighters in Aceh, but there was a "huge GAM network" worldwide.

Mr Hasan restructured GAM's leadership in 2002, he noted. Aside from the trio arrested in Alby, there were other key figures like Mr Bakhtiar Abdullah and Mr Yusra Habib Zen. GAM's network can also be found in Kuala Lumpur, the United States and Australia, he said.

There are believed to be some 10,000 Acehnese living outside Indonesia, mostly concentrated in Malaysia, Australia, Holland, Canada, the US and the Scandinavian countries of Sweden, Denmark and Norway. Most have become citizens of their host countries.

Meanwhile, GAM supporters and leaders are fighting back with words. Mr M. N. Djuli of the New York-based International Forum for Aceh, which styles itself as a non-profit organisation but is widely seen as a front for GAM, said he was surprised by the "timing" of this week's arrests.

"The Swedish investigating team has returned from Aceh quite some time ago and I haven't seen any special thing happening to prompt the action at this point in time," he said. "We will have to wait and see what transpires."

GAM's chief of staff in Aceh, Mr Ishak Daud, told wire agency AFP that the arrests were politically motivated. "We will continue to fight for independence of Aceh. The arrest of our leaders in Sweden will not dampen our fighting spirit." He said that GAM's military commander, the Libyan-trained Muzakkir Manaf, has promised that if the legal process in Sweden drags on "we may decide to pick new leaders of the Aceh nation".

Police say presidential favourite promises Aceh peace

Reuters - June 18, 2004

Banda Aceh -- Indonesia's presidential favourite vowed on Friday to achieve peace in rebellious Aceh and restore dignity to people in the strife-torn province if he was voted to office.

Ex-general Susilo Bambang Yudhoyono was chief security minister when Indonesia imposed martial law and launched its biggest offensive ever against Acehnese rebels in May last year. However, diplomats say he had favoured a political solution to the decades-long conflict, but eventually went along with demands of military hawks when peace talks collapsed.

"If I am elected, I will keep [trying] to solve the Aceh problem with two pillars. First, the armed separatist movement must be halted through solutions for peace," said Yudhoyono during a visit to the provincial capital Banda Aceh ahead of Indonesia's first direct presidential election on July 5.

"Second, the issues of justice and dignity in Aceh that have been felt lacking and have become one of the triggers for conflict must be dealt with through special autonomy."

Yudhoyono, who was speaking with student leaders amid tight security, did not elaborate on how he would achieve a solution to a conflict that has killed at least 10,000 people since 1976. Jakarta lifted martial law in Aceh in May, exactly one year after its imposition, but has not eased up on the offensive. Analysts have said the operation had failed to defeat the Free Aceh Movement (GAM), while rights groups have accused the military of human rights abuses during the offensive.

Yudhoyono quit President Megawati Sukarnoputri's cabinet in March after a row with her over his own presidential ambitions. Prior to the offensive, the government had offered an autonomy package that gave Acehnese more say over their affairs and a share in the province's natural wealth. But there has been little accounting for years of abuses, both at the hands of the military and the rebels, rights groups say.

A tambourine troupe and girls with floral garlands welcomed Yudhoyono when he stepped off the plane at Banda Aceh, 1,700 km northwest of Jakarta. Later on Friday, he plans to hold a rally in Aceh's largest stadium.

Some 150 million Indonesians will be eligible to choose out of the five presidential candidates and their running mates on July 5. Yudhoyono has led recent opinion polls with numbers far above the others. His Aceh visit came in the same week as Swedish authorities, following pressure from Indonesia, arrested three Stockholm-based GAM leaders.

Indonesia has hailed the arrests after years of trying to convince Sweden to take action against Acehnese who have become Swedish citizens or residents but remain active GAM leaders. GAM has said the arrests would not dampen their fight.

Government divides labor in Aceh recovery work

Jakarta Post - June 18, 2004

Tiarma Siboro, Jakarta -- The government issued on Wednesday guidelines for the implementation of integrated operations in Aceh under a state of civil emergency, which restrict the governor's authority over local administrations.

Interim coordinating minister for political and security affairs Hari Sabarno said all related ministries and institutions in the central government would oversee the implementation of the integrated operations, which would be carried out by specified local officials.

Speaking after a coordinating meeting on Aceh, Hari said the guidelines assigned the Indonesian Military (TNI) chief to oversee military operations in the troubled province, while the Aceh military commander would follow orders coming from TNI Headquarters.

The National Police chief will have full authority over law enforcement in Aceh, but he can delegate tasks to the Aceh Police chief.

The office of the coordinating minister for the economy, the office of the coordinating minister for people's welfare and the home affairs ministry will supervise three other operations in Aceh and delegate jobs to local offices.

"The Ministry of Home Affairs will oversee the Aceh governor in the implementation of local administration, while the Ministry of Social Affairs will delegate its tasks to the Aceh deputy governor in charge of people's welfare," said Hari, who is also minister of home affairs.

In regards to economic recovery in the province, Coordinating Minister for the Economy Dorodjatun Kuntjoro-Jakti has yet to name an institution or person who will be in charge of operations. He has, however, temporarily assigned the regional planning agency to carry out all policies issued by his office.

Present at the Wednesday meeting were Dorodjatun, TNI chief Gen. Endriartono Sutarto, National Police chief Gen. Da'i Bachtiar, National Intelligence Agency chief A.M. Hendropriyono and Aceh Governor Abdullah Puteh.

Steps to limit Puteh's power come after legal authorities unveiled several corruption cases in which the governor has been implicated. The cases involve billions of rupiah from the state budget.

Puteh has undergone questioning at the National Police Headquarters in Jakarta over alleged corruption in the purchase of a power generator for Rp 30 billion (US$33 million). He has also been questioned by the Corruption Eradication Commission over alleged markups in the procurement of a Russian-made Mi-2 helicopter that may have caused some Rp 6 billion in state losses.

A presidential decree issued on May 19 lowering the 12-month martial law in Aceh to a state of civil emergency says Puteh must consult with other officials and the central government before taking a decision, instead of having full power in accordance with Law No. 23/1959 on civil emergency.

President Megawati Soekarnoputri earlier issued an instruction on the establishment of a body she heads to supervise the implementation of the civil emergency in Aceh.

About 40,000 security troops who were deployed to crush the Free Aceh Movement during martial law, meanwhile, will be maintained in the province.

The central government has also deployed two special teams to assist in the implementation of the civil emergency in Aceh.

Forgotten People: The people of Aceh

Reuters - June 16, 2004

Larry Thompson -- A 28-year conflict between the Indonesian government and the separatist Free Aceh Movement (GAM) has killed thousands of civilians, displaced hundreds of thousands of people, and destroyed much of the infrastructure of Aceh. In May 2003, the Indonesian government launched a military offensive in Aceh, the government's largest military campaign since its invasion of East Timor in 1975.

Human rights groups report that the military campaign has resulted in an increase in murders, torture, arrest, and other human rights abuses of civilians. Both sides are responsible for human rights abuses.

As a small province on an island within the vast Indonesian archipelago, which is itself many thousands of miles away from major media centers in the United States and western Europe, Aceh is inherently difficult to raise to the level of a major pre- occupation of the international community. The Government of Indonesia is making a difficult situation worse by imposing a virtual ban on access to the region by foreign media and international aid workers.

The most recent government step in June 2004 was to expel two international staff members of the International Crisis Group from Indonesia and to crack down on other non-governmental organizations (NGOs) who have been critical of the government.

A US State Department spokesman described the ICG expulsion as "disappointing" because it contrasts with the "impressive progress made by Indonesia in recent years in developing a democratic civil society." The crackdown on NGOs in Indonesia will make monitoring the humanitarian and human rights situation in Aceh more difficult than ever.

The People and the land

Aceh province is on the northern tip of the Indonesian island of Sumatra. Aceh is rich in natural gas and petroleum, providing 15 percent of Indonesia's exports, but the people of Aceh receive little benefit from the exploitation of their natural resources and resent the economic and political domination of Java and the Javanese. Army and government authorities are also accused of being involved in illegal logging and export of timber The population of Aceh is 4.2 million. The language and culture of the Acehnese is distinct from other ethnic groups of Indonesia, and they have traditionally had a strong ethnic and religious identity. Aceh fought a long, bloody war against the Dutch colonizers in the nineteenth and twentieth centuries and the strongly nationalistic character of the Acehnese has continued since Indonesian independence.

While 87 percent of Indonesians are Muslim, the Islamic character of Aceh is most pronounced. Islam first came to Indonesia and possibly to all of Southeast Asia through Aceh in 700. Islamic Sharia law was adopted in Aceh in 2002, but the independence movement appears to be primarily nationalistic rather than Islamic.

Current conflict and political climate

In 1976, an armed independence group known as Free Aceh Movement (GAM) was established to push for independence. Throughout the 70's and 80's Acehnese attacks on police and military installations were common, and in the early 90's the Jakarta government began to respond with harsh counter-insurgency campaigns.

Talks between the government and GAM broke down in May 2003 because neither side complied with the Cessation of Hostilities Agreement. In response, the Jakarta government imposed martial law in Aceh and launched a military offensive, sending 40,000 troops to attack some 5,000 GAM rebels.

Foreign press and aid workers were effectively banned from the region at that time. On May 19, 2004, after one year under martial law, Aceh's status was changed to that of a "civil emergency." Under this new status, the province will be jointly overseen by military and civilian leaders, with the army staying in place for security reasons.

An important upcoming event is a national election on July 5 with a likely runoff between the top two vote-getters on September 20. This will be the first direct election of a President in Indonesian history, but the electorate seems disillusioned.

Humanitarian conditions

The conflict in Aceh has had harsh consequences for the civilian population. Since the imposition of martial law on May 19, 2003, according to the local media, more than 2,300 people have been killed, 122,000 displaced, and 600 schools and 32 health centers have been destroyed.

Fighting has also disrupted food supplies, electricity, and water, and caused unemployment and poverty to reach alarming levels. Reports of violence against civilians by both the army and GAM forces, including abduction, torture, rape, displacement, extrajudicial detainment and murder, have emerged from Aceh.

Violence has continued despite the partial lifting of martial law last month.

Most displaced persons in Aceh stay with relatives or in the forest rather than in one of 19 camps set up by the Indonesian government. These camps reportedly lack organized assistance and necessary resources such as potable water, proper sanitation, food and adequate medical supplies.

People fear the camps because of the lack of real protection and the frequent outbreaks of contagious diseases. Displacement has been used as a strategy of war by the army, forcibly relocating entire villages, placing people in camps with guards, looting their homes and accusing them of links to the GAM.

In addition to those displaced within Aceh, 120,000 people have fled to neighboring provinces and countries, especially to Malaysia. Water and sanitation in refugee camps in Malaysia have been below international standards.

Malaysia has taken a tough stance on refugees and considers Acehnese as illegal immigrants. Several hundred refugees forcibly returned to Indonesia since the 1990s have reportedly been killed or tortured.

Recommendations:

• The United Nations and its most powerful member states, including the United States, should push for a renewal of the ceasefire and a resumption of negotiations between Acehnese and the government. Some international observers have called for the Acehnese representation in negotiations to be broadened to include all sectors of the population and not just the GAM.
• The Indonesian government and GAM should publicly condemn the human rights abuses of their armed forces and supporters in Aceh, bring the perpetrators of these abuses to justice through independent and impartial investigations, and take immediate steps to curb abuses.
• The Indonesian government should facilitate, not hinder, full access by international organizations, NGOs, and the media to Aceh to provide for the basic humanitarian needs and protection of Acehnese civilians and to monitor and report human rights violations.
• Malaysia should refrain from forcibly returning refugees. The Indonesian government should ensure the safety of any refugees voluntarily returning from Malaysia, Thailand and other provinces of Indonesia, and allow for peaceful resettlement in Aceh.

[Larry Thompson is Senior Advocate with Refugees International. Intern Natalie Merrill assisted with the preparation of this report. Any views expressed in this article are those of the writer and not of Reuters.]

Sweden: Separatists from Aceh arrested, charged

Radio Australia - June 16, 2004

Police in Sweden have arrested three leaders of Indonesia's separatist Free Aceh Movement after raiding their homes in a Stockholm suburb.

The Free Aceh Movement, or GAM has been waging a separatist campaign against the Indonesian government for twenty-five years, with both sides accused of atrocities against civilians. The Indonesian government has welcomed the arrests, after lobbying Sweden to restrict the activities of GAM's exiled leaders -- branding them terrorists for allegedly directing the fighting in Aceh.

Presenter/Interviewer: Sen Lam

Speakers: Thomas Lindstrand, Sweden's state prosecutor, Bakhtiar Abdullah, spokesman, the Free Aceh Movement leadership in Stockholm

Lindstrand: I cannot answer for the whole of Sweden, but as far as I'm concerned I received last summer a lot of documents from the Prosecutor General and the documents had been handed over from the previous Indonesian Foreign Minister, Ali Alatas when he visited the Prosecutor General in June last year. And after I have received these documents I studied them of course and then I found that the Indonesians had more evidence to submit and I asked them for these documents, these new documents. And then in February this year I decided to initiate a preliminary investigation.

Lam: Jakarta of course has been trying to prove that the GAM leadership organised armed operations from the Stockholm suburb of Alby, where the detained men lived. Have you uncovered more information about this? Was that why you decided to proceed?

Lindstrand: We have studied, I have studied the material and we have also we made a trip in March to Indonesia and we questioned a lot of people, all these investigative measures have resulted in what took place yesterday, and now it's a question about what the detainees will say and what the other materials will show.

Lam: So has a decision been made then to prosecute these detainees with some kind of breach of international law or international crimes?

Lindstrand: No because for the moment there is a preliminary investigation and when that investigation is finished then I must decide whether I shall go to court, to a trial to prosecute them or not. First the preliminary investigation, and that investigation I think will take some time.

Lam: But for a senior prosecutor such as yourself to be involved, surely you must see some signs or some significant evidence that might have been uncovered?

Lindstrand: Yes I see some evidence, but the suspects have not declared their opinions, they have not been questioned yet. At this point I think it's not meaningful to have an idea of about how it all will end.

Lam: Were the detentions driven by diplomatic pressure from Jakarta? What do you say to critics who claim that Stockholm is taking this action because of Jakarta's diplomatic pressure?

Lindstrand: I consider it to be an insult. I don't do anything because of diplomatic pressure, that's an insult if anybody claims that.

Lam: So you will be going purely by rule of law and to see whether or not these men have indeed breached some kind of international law?

Lindstrand: Of course.

Lam: Did you uncover any evidence that might have pointed to illegal activities within Sweden itself committed by these men?

Lindstrand: Of course I cannot reveal anything about things like that to you because the investigation is going on right now.

Lam: But you have reason enough to proceed?

Lindstrand: I have reason enough to proceed yes.

Rebels' detention may be UN-based

Jakarta Post - June 17, 2004

Fabiola Desy Unidjaja and Tiarma Siboro, Jakarta -- The detention of two Aceh rebel leaders in Sweden may have been based on a UN resolution requiring member states to take action against anyone that threatens the territorial integrity of states.

The United Nations General Assembly resolution was the legal standard used by the Indonesian government to file its case against the Free Aceh Movement (GAM) members, Indonesian foreign ministry spokesman Marty Natalegawa said on Wednesday.

"We are not informed about which international law the Swedish government used in the arrest but we used that resolution earlier to support our case [sent to Sweden]," Marty said.

Two GAM leaders -- Malik Mahmud and Abdullah Zaini -- were detained in Sweden recently following a request from Jakarta. GAM senior leader Hasan Tiro was not detained due to his poor health but he is also believed to be facing charges in Sweden, over what a Swedish prosecutor called a "grave breach of international law".

UNGA resolution No. 49/60 of 9 December 1994 says "the state members of the United Nations solemnly reaffirm their unequivocal condemnation of all acts, methods and practices of terrorism as criminal and unjustifiable, wherever and by whomever committed, including those in which jeopardize the friendly relations among states and peoples and threaten the territorial integrity and security states".

Separately, interim coordinating minister for political and security affairs Hari Sabarno said the government was considering filing a new case against Malik Mahmud in Singapore after Swedish authorities told them Malik was a Singaporean citizen. "We don't know yet whether Swedish prosecutors can continue to proceed with his case," Hari said.

Swedish Embassy of Indonesia official Anders Bacman confirmed Malik Mahmud held Singaporean citizenship but refused to comment further. "The Swedish prosecutors have independent authority to prosecute the case," he said.

The Indonesian Military (TNI) Chief Gen. Endriartono Sutarto on Wednesday urged GAM members to stop their activities and join with other Acehnese to help build the province.

Members of government ministries that dealt with Aceh held a meeting at Hari's office on Wednesday to respond the arrests, Hari said. Several police officers would also be involved in the process, he said, because "we have the right to know about all previous testimonies from the leaders."

In Aceh, GAM spokesman Sofyan Dawood said the involvement of foreign investigators in the case would benefit GAM's fighters even though they had to face "an unexpected situation".

"Let the Swedish law enforcers continue with the investigation, and if the case is strong enough to be taken to court, let the court decide whether the evidence provided by the Indonesian government meets international legal standards. Most of the GAM witnesses were tortured by Indonesian soldiers, while the data found in a laptop is inadequate evidence," Sofyan told the Post.

Hari earlier said one important piece of evidence was the contents of a laptop owned by former GAM member Tgk. Amri who had surrendered it to the Indonesian authorities. However, Sofyan said the laptop did not explain anything because "none of the GAM leaders communicate with us."

As of midday Wednesday, Malik and Zaini were still being questioned at the Swedish prosecutor's office accompanied by their lawyer Lief Libersky. The prosecutors have the authority to question them for three days.

"If the Indonesian government thinks the arrests will weaken our struggle, they will be disappointed because we will not stop the fight," Sofyan said.

Swedish arrest of Aceh separatists cheers Jakarta

Reuters - June 15, 2004

Stephen Brown, Stockholm -- Swedish police on Tuesday arrested three leaders of an Aceh separatist group which has been fighting Indonesia for independence since 1976, saying they were suspected of "grave breaches of international law."

Two of the exiled leaders of GAM, the Free Aceh Movement, were being held in custody, the Swedish prosecutors' office said. Jakarta, which has long lobbied Sweden to curtail their activities, welcomed the move.

About 10,000 people, mostly civilians, have died in the fighting between GAM and government troops in the western-most province of the vast Indonesian archipelago.

Jakarta named the three as Hasan Tiro, Zaini Abdullah and Malik Mahmud, who is considered by GAM as Aceh's exiled prime minister. It did not specify which two were in custody.

The Indonesian foreign ministry issued a statement hailing Sweden's "steadfast commitment" to ending "armed rebellion, acts of violence, and acts of terrorism perpetrated by GAM in Aceh and other regions in Indonesia."

Indonesia troops launched an offensive and imposed martial law in Aceh, an oil and gas-rich province on the northern tip of Sumatra island, after peace talks collapsed in 2003. Martial law was lifted this May but there are still 40,000 troops there.

US-based Human Rights Watch said in a report in December the military was waging an extensive campaign of extra-judicial killings, kidnapping and torture in Aceh -- a report Jakarta dismissed as "ill-informed and one-sided."

Sweden granted the GAM leaders asylum in the late 1970s. After years of pressure from Jakarta a team of Swedish court investigators including a chief prosecutor went to Indonesia in March to investigate Indonesia's allegations.

GAM spokesman Bakhtiar Abdullah told Reuters in a recent interview in Stockholm that they had taken the precaution of hiring a lawyer after the prosecutors' trip to Indonesia but that they still believed "there is justice and law in Sweden."

Sweden's foreign ministry, asked if Stockholm had yielded to Indonesian lobbying over GAM, said prosecutor Thomas Lindstrand had seen the situation in Indonesia for himself and was acting as "an independent member of the judiciary."

Indonesia goes to the polls in July to choose a new president, with policy on Aceh a campaign issue.

[Additional reporting by Patrick Mcloughlin and Simon Johnson in Stockholm and Jerry Norton in Jakarta.]

West Papua

Papuans reach peace accord to end bloody tribal conflict

Jakarta Post - June 17, 2004

Nethy Dharma Somba, Timika -- Two conflicting tribes, the Damal and Nduga, in Papua province have agreed to end the bloody clashes that have killed two tribesmen on each side.

The agreement was reached during a traditional ceremony in Old Kwamki village in the remote town of Timika on Tuesday, during which the tribespeople sacrificed two pigs, broke the string of a bow and fired two salvos of shots into the air.

The peace accord was witnessed by Mimika Police chief Adj. Sr. Comr. Paulus Waterpauw.

One sacrificial pig was presented by each tribe, and both were killed by arrows in the space between two wooden poles in the traditional manner. After the two pigs were dead, warriors from the two sides took turns walking between the two poles, a sign that there was no more enmity between the two groups.

They returned to their respective localities after swapping the sacrificed pigs, denoting that they had forgiven one another. The peace accord was signed by representatives from both sides.

Besides causing the deaths of four warriors, the clashes also left at least 123 people injured. Peace was only agreed after the death toll from both sides had become equal -- two from each side. The two dead warriors from the Nduga tribe were Pedimen Alom and Unum Alom. Both were killed by arrows.

The dead on the Damal side were Mathius Murib, who was killed by Jimmy Murib on May 20 at the SP 13 Jayanti complex, and Jumar Murib, who was killed on June 5. The death of Mathius Murib was believed to have triggered the conflict as his murderer, Jimmy, was from the Nduga tribe.

The peace ceremony began with the war chiefs from the two groups parading in full war regalia into the middle of the field. Both sides took turns running from one end of the field to the other while yelling -- which is a traditional sign of peace. Security personnel from the Mimika Police and the military kept the two groups from coming into direct contact.

The Damal tribe was represented at the meeting by Pagugingme Murib, a relative of the dead victims on the Damal side, and Simeon Allom, who lost two of his family members in the conflict, from the Nduga side.

Both showed remorse and expressed their desire for an end to the conflict. "Don't let this war lead to the deaths of any more of our brothers as they represent the next generations of our tribes," said Pagugingme. "This conflict has lead to the deaths of two of my brothers and that is why I want peace. We have lost kinsmen as a result of this conflict," said Simeon.

Vanuatu: Government calls for dialogue on West Papua

Radio Australia - June 16, 2004

With a long tradition of supporting independence movements in the Pacific, Vanuatu has taken the lead to support dialogue on the future of the Indonesian province of Papua. Last month, Vanuatu's Foreign Minister Moana Cacasses issued an invitation to the Government of Indonesia to participate in a roundtable meeting with representatives of the West Papuan movement. Now community groups in Vanuatu have formed a new association to mobilise support for the movement across Melanesia.

Presenter/Interviewer: Nic Maclellan

Speakers: Dr. John Ondawame, West Papua People's Representative Office, Port Vila; i Sakita, Chairman, Vanuatu Free West Papua Association

MacLellan. Vanuatu has long been a supporter of independence movements in the Pacific, such as the FLNKS in New Caledonia. But in recent years, the Vanuatu government has extended support to the Melanesian population in the Indonesian province of Papua, which is called West Papua by its independence movement.

Dr. John Ondawame works with the West Papua People's Representative Office in Port Vila -- an office established with the approval of the Vanuatu government. Dr. Ondawame welcomes Vanuatu's recent initiative calling for a round table dialogue between the Government of Indonesia and representatives of the West Papuan movement.

Ondawame: "Primary objectives of this round table discussions is to bring in together the government of Indonesia and the people of West Papua, representatives of the people of West Papua, to develop a common understanding and trust before we start a real negotiation regarding the situation in West Papua.

"But the most important thing in the peace process is the need for both conflicting parties to sit down on the negotiating table, which is the first time in our history that the two parties agree to sit down together.

"The government of Vanuatu would like to facilitate these historical events, so we really appreciate the government of Vanuatu and the people of Vanuatu for these initiatives that have been taking place."

MacLellan: Dr. John Ondawame.

The Vanuatu government's formal invitation for Indonesia to attend a roundtable discussion was preceded by informal discussions between Vanuatu Foreign Minister Moana Cacasses and Indonesian Foreign Minister Hassan Wirajuda, meeting earlier this year in Shanghai, China.

The Indonesian Foreign Minister indicated that his government was open to the idea, but as yet there's been no formal response to Vanuatu's invitation.

With elections scheduled for July in both countries, there's unlikely to be a quick decision, but community groups are working to ensure that a new Vanuatu government maintains its involvement in the issue.

A new Vanuatu Free West Papua Association was launched in Port Vila last week, to lobby any future Vanuatu government to support West Papuan independence. The association's members include youth and community groups but also major institutions like the Vanuatu Cultural Centre, the Vanuatu Association of NGOs and the Malvatumauri Council of Chiefs. Lai Sakita is Chairman of the new association.

Sakita: "In Solomon Islands, Indonesia has set up over there a consulate and in Fiji an embassy and we are afraid that it might happen in Vanuatu, so we must prepare the ni-Vanuatu.

"And that's why we set up this association to remind also new politicians or whoever in the government that the West Papuan issue is also a Melanesian issue and Vanuatu is part of Melanesia, that's why we should be part of that issue.

"The association has been formed also to advocate for the independence and human rights of the people of West Papua and Melanesia, and there are groups in the association which includes members from NGOs, cultural institutions, government and other bodies."

MacLellan: Lai Sakita, chair of Vanuatu's new West Papua association.

Since 2000, the Pacific Islands Forum has included the issue of Papua on its agenda, calling for dialogue and expressing concern about human rights violations. But Forum leaders have stressed that they recognise Indonesian sovereignty over Papua, and support the current Special Autonomy process that Indonesia introduced in January 2003.

West Papuan representatives attended the 2000 Forum in Kiribati as part of Nauru's delegation, but later lobbying efforts were hampered by disagreements between groups campaigning for independence.

I asked Dr. John Ondawame whether this disunity was a problem in achieving international support:

Ondawame: "Not at all. We already demonstrated to world community, particularly when we had meetings with the European governments like the United Kingdom, the Netherlands, Ireland, Finland governments at the beginning of this year, demonstrate to them that we are united.

"We representatives of the whole movement, factions and the civil society and political and social organisations like all the OPM, Papuan Presidium Council, human rights organisations, churches, tribal councils, women's councils are united and with one voice.

"Even when it comes to the negotiations with the Indonesian government, not one party will dominate that discussion but all of us, a united voice, representatives of all those organisations will come together and we have a plan to have meetings, internal meetings before the discussion is taking place.

West Papua governor illegitimate: Court

Jakarta Post - June 16, 2004

Ridwan Max Sijabat, Jakarta -- The Papuan people's campaign against the province's division has received a major boost after the State Administrative Court ruled on Tuesday against a law appointing Abraham Octavianus Atururi as West Irian Jaya governor.

Several prominent Papuan figures immediately called on the government to comply with the court's ruling that Presidential Decree No. 213/2003 appointing the governor was contrary to the 2001 law on special autonomy. They warned Papuan people would lose trust in the central government if the court ruling went unheeded.

Simon Patris Morin, a Golkar Party legislator from Papua, urged President Megawati Soekarnoputri to abide by the verdict. Megawati would have to recognize the Papuan people's opposition to her decree if she wished to win their support in the coming presidential election, he said.

Provincial legislature speaker John Ibo and the Advocacy Team for Papua's Special Autonomy have asked the Constitutional Court for a judicial review of the decree that enforces Law No. 45/1999 on the formation of West and Central Irian Jaya provinces in Papua.

The court has delayed its hearing of the case because of its heavy workload. It is currently hearing hundreds of election disputes involving political parties and Regional Representative candidates that contested the legislative election in April.

Deputy speaker of the Papuan legislature Paskalis Kasai said Papuan leaders were aware of the central government's attempts to railroad them into accepting the division.

"Jakarta has suspended the disbursement of special autonomy funds worth Rp 1.6 trillion as Papua [provincial government] refuses to allocate a part of it to West Irian Jaya. Jakarta is also organizing a ceremony in Biak to announce the establishment of the Central Irian Jaya province in the near future," he said.

The declaration creating the Central Irian Jaya province was suspended in August last year following a bloody clash between supporters and opponents of the new province in Timika. Six people died in the conflict and dozens of others were injured. There is widespread opposition in Papua to the division of the province.

Many people have criticized the central government for its inconsistency in enforcing the special autonomy law and its decision to split the natural resource-rich province for security and economic reasons.

Meanwhile, director general of public administration and regional autonomy affairs at the Home Ministry Oentarto Sindung Mawardi said the government would lodge an appeal against the ruling with the High Administrative Court.

The state court had failed to take the government's explanation about the presidential decree into consideration, Oentarto said.

"The government's decision to enforce Law No. 45/1999 and the appointment of Atururi as acting governor in West Irian Jaya are not against Law No. 21/2001 because all three provinces will enjoy special autonomy," he said.

Oentarto said Papua Governor Jaap Salossa had earlier proposed the development of Papua into five -- not three -- provinces.

He denied allegations the government was set to announce the formation of the Central Irian Jaya province in Biak and had suspended the special autonomy funds' disbursement.

"The special autonomy funds for the first and second quarters of the 2003 fiscal year have been disbursed, while the third and fourth quarters will follow," he said.

Hundreds of people stage rally in West Papua

Antara - June 15, 2004

Biak -- Some 300 people in Biak Numfor district in Indonesia's Papua province staged a peaceful rally at the legislative council building on Tuesday to press for the discharge of police officers for beating a local official last June 9.

Rally coordinator, Marinus Baab, asked the legislative council, along with local security authorities, to discharge 1st Brig Samuel Ohoi Ulun and his fellows, suspected of beating Biak Kota subdistrict head, Johanes Sopacau, last June 9.

Baab said it is for the umpteenth time that members of the police's mobile brigade have tortured local officials.

Human rights court orders officers' trial to continue

Jakarta Post - June 15, 2004

Andi Hajramurni, Makassar -- A panel of judges dismissed on Monday defense pleas by two senior police officers charged with human rights abuses in Papua, ruling that their ad hoc rights trials must continue in Makassar, South Sulawesi.

The charges laid by prosecutors against the two defendants -- Mobile Brigade deputy chief Brig. Gen. Johny Wainal Usman and Papua Police spokesman Adj. Sr. Comr. Daud Sihombing -- are complete and accurate, the judges said.

The judges said the charges complied with "formal and material conditions" as regulated in Article 153 (2a) of the Criminal Code Procedures. "Therefore, the pleas presented by the defendants and their lawyers cannot be accepted and we declare that the trials will continue," presiding judge Jalaluddin Amin said.

He said the court would summon at least 98 witnesses to testify for or against, Johny, 49, and Sihombing, 45. Lawyers for the two defendants said they would appeal the ruling.

The two police officers could face jail terms of 25 years to life if found guilty of rights abuses. Last month, prosecutors told the Makassar court that Johny and Sihombing were guilty of violating articles 39 and 42 of Law No. 26/2000 on human rights. The two failed to prevent their subordinates from committing rights violations, according to prosecutors. Neither did they hand over their subordinates to the authorities for investigation and prosecution.

The alleged abuses took place on December 7, 2000, in Abepura, about 20 kilometers south of the Papua capital Jayapura. They were triggered when 30 residents armed with sharp weapons attacked and set fire to the Abepura Police station at about 1:30 a.m.

Sgt. Petrus Eppa was killed and three other policemen were injured in the incident. In a separate attack on the Irian Jaya Autonomy office in Abepura, a security officer, identified as Markus Padama, was killed.

About an hour later at 2:30 a.m., the Abepura Police, assisted by the Jayapura Mobile Brigade, began a search for the perpetrators of the attacks, scouring nearby residential areas and hostels, including a student residence.

During the search, police allegedly arrested, assaulted and tortured at least 99 residents suspected of having been involved in the attack, resulting in three deaths. Elkuis Suhunaib, 18, reportedly died during the search while Johny Karunggu, 18, and Orry Doronggi, 17, allegedly were tortured to death.

At the time of the incident, Johny was the commander of the Jayapura Mobile Brigade and Sihombing was the local police chief.

'War on terrorism'

Co-operation key to regional counter-terrorism

Radio Australia - June 17, 2004

Australia's Defence Minister says Asia must confront the unpalatable fact that it's a breeding ground for Islamic extremism. Senator Robert Hill was speaking at the first meeting in Australia of Asia Pacific special forces military -- including officers from Indonesia's Kopassus force.

Presenter/Interviewer: Graeme Dobell

Speakers: Robert Hill, Australia's Defence Minister

Dobell: The first Australian conference of military special forces involved officers from a close ally, the United States, and neighbours such as Papua New Guinea, but also representatives from Indonesia, Vietnam, Cambodia, India and China. Australia's Defence Minister, Robert Hill, says it's a unique opportunity to build a regional response to the common threat of terrorism.

Hill: The only way to effectively combat today's terrorism is through cooperation and the forces better at the sharp end of defeating this threat have not necessarily had a close relationship in the past. But it's very important that they know each other, have confidence in each other so that if an event does occur that requires a cooperative response, they won't be starting from scratch.

Dobell: The Defence Minister says today's terrorism is a product of Islamic extremism that targets Muslims and non-Muslims. Senator Hill says extremists are engaged in a jihad against all who do not commit to their apocalyptic ideology and the aim of creating what he describes as an Islamic theocratic super state. He says terrorist groups in Asia have adopted Al Qaeda's methods and shown a similar fanaticism and violent commitment. The unpalatable fact for Asia, he says, is that the region is a breeding ground for Islamic extremism. Senator Hill says Australia is building a military response through special forces exercises and military cooperation in Southeast Asia.

Hill: We have as you know, we have bilateral exercises with a number of states. We've got one coming up in Thailand. We also exercise with the Philippines. We announced a week ago that we were extending the exercise program under the Five Powers Arrangement to include a counter terrorism scenarios. So it's a step in confidence building and basically learning the capacities, the capabilities of each other and being able to jointly respond if it proves to be necessary.

Dobell: The Five Power Arrangements cover Malaysia and Singapore and the bilateral links go separately to Thailand and the Philippines ... meaning the big gap in Southeast Asia is with Indonesia.

Australia last trained with Indonesia's special forces in 1997, and the links with Kopassus were severed after the violence in East Timor in 1999. Senator Hill says Australia is slowly rebuilding links with the notorious Indonesia special forces, although contacts with some Kopassus officers are vetoed because of human rights issues.

Hill: Kopassus is represented at this conference through its Unit 81 which is its primary counter terrorism capability because we believe that's in Australia's security interests. If there was -- one can imagine a terrorist scenario in Indonesia where that unit is called upon to respond and in those circumstances we believe it's very important that our Special Forces know who's responding, know their capability and can be able to offer assistance. It might be in intelligence, to assist them in their task.

Terror suspect Bashir loses lawsuit against police

Agence France Presse - June 14, 2004

An Indonesian court has rejected a lawsuit brought by lawyers for terror suspect Abu Bakar Bashir which sought his release from police detention.

Bashir's arrest on April 30 was "carried out by police according to procedures which are stipulated in the penal code," Chief Judge Hari Sasongko said at South Jakarta district court. Sasongko said police had also convinced the court they had enough evidence to build a case against Bashir.

"Allahu Akbar!" (God is greatest) shouted some of Bashir's supporters inside the court in a defiant response to the ruling.

The lawyers had brought a lawsuit against national police chief General Da'i Bachtiar, demanding the Islamic cleric's release. They argued that police did not follow proper procedures in arresting Bashir and were acting under pressure from the United States.

One of them, Achmad Michdan, said he would appeal the ruling to the Supreme Court. "The panel of judges still do not have the guts to carry out a breakthrough against cases with political nuances," he told reporters.

Police say they have new evidence that Bashir, 65, led the Al- Qaeda-linked Jemaah Islamiyah (JI) terror network, after a court earlier cleared him of the charge. They rearrested him on April 30 as he stepped out of a Jakarta prison after completing a sentence for immigration violations.

Lawyers for Bashir said he never saw the identification of the policeman who arrested him and he and his family were not given copies of the arrest warrant as required by law.

Bashir, who was not present in court for the hearing on the lawsuit, has denied involvement in terrorism and has said the allegations were a US-inspired smear campaign against Islam.

Indonesian authorities say Bashir, by virtue of his alleged leadership of JI, will be charged with involvement in attacks between 1999 and 2002 -- including the Bali nightclub bombings which killed 202 people in October 2002.

Police are holding him under an anti-terror law which allows detention without trial for six months.

A court last September jailed Bashir for four years for involvement in a JI plot to overthrow the government but said there was no proof he led the network. An appeal court overturned the treason conviction but ruled that Bashir must serve three years for immigration-related offences. The Supreme Court later halved that sentence.

2004 elections

SBY: Government, business and the people must work together

Detik.com - June 18, 2004

Anton Aliabbas, Jakarta -- Presidential candidate from the Democratic Party Susilo Bambang Yudhoyono (SBY) says that if he is elected he will work to create a harmonious relationship between government, business and the ordinary people. In such a climate it is hoped that the economy will grow strongly.

The statement was made when SBY was giving greetings at a meal and informal meeting with hundreds of business people at the Hotel Mulia Grand Ballroom on Jalan Asia Afrika in Senayan, Jakarta. Also present at the event was SBY's running mate, vice- presidential candidate Jusuf Kalla. "And if a harmonious relation can develop between a good government, business and the people then over the next five years the economy will grow strongly. And in 2009 it is very possible that our situation will return to the way it was before the [economic] crisis. Because we have the ability [to make this happen]", said SBY.

SBY also took the opportunity to express his regret that there have been slogans used the election campaign which are unhealthy and provocative such as the slogan "Which [will you] choose, the big conglomerates or the ordinary people". "Why must [we] make that choice. Instead we should build a harmonious relationship", he said.

He went on to say that "If we can get through this then we will be able to develop the nation. I also appeal to business people to be good business people who pay tax and give [their] employees good wages. And for the people to become productive workers". SBY also said however, he would not be making too many promises about what will be done if he wins the presidential elections. "Don't make to many promises if in fact it is not possible to implement them. Because if this is swallowed by the people then it will become a great disaster. We are not being pessimistic but also not making too many promises. We only want make Indonesia better over the next five years".

In Jusuf Kalla's greeting meanwhile, he said that the elections are not to seek prestige but to advance and improve Indonesia. "So it is not just for the two of us", he went on to say.

He then added "If we want to be a nation which is prosperous, secure and just, of course we need a leader who is strong and has authority. And we are that strong and authoritative leadership. [And] because this is in our mutual interests of course we also need mutual cooperation because a strong government need a strong business world". (gtp)

[Translated by James Balowski.]

Students burn photographs of five candidates in Medan

Detik.com - June 14, 2004

Khairul Ikhwan, Medan -- Burning photographs of a presidential candidate has become commonplace. In the South Sumatra provincial capital of Medan however, five photographs of candidates for the national leadership were burnt at the same time.

The photographs were burnt during an action by students from the National Student League for Democracy (LMND) in the grounds of the Medan General Elections Commission on Jalan Perintis Kemerdekaan on Monday June 14.

"This is a form of protest action by us against them. There is not a single presidential candidate who has sided with the poor. None of them will be able to counter US (United States) intervention through the IMF and similar [insitutions]", said LMND activist John Merdeka.

As well as burning the photographs of the five presidential candidates, that is incumbent President Megawati Sukarnoputri, Golkar Party candidate former general Wiranto, National Mandate Party candidate Amien Rais, incumbent Vice-President Hamzah Haz and Democratic Party candidate Susilo Bambang Yudhoyono, the demonstrators also held speeches in which they called on the Indonesian people not to elect a presidential candidate who will be against the poor.

No repressive action was taken by security forces during the demonstration. The scores of police present only watched over the demonstration from a distance. (djo)

[Translated by James Balowski.]

Wiranto biggest vote buyer in campaign: NGOs

Jakarta Post - June 18, 2004

M. Taufiqurrahman, Jakarta -- Corruption watchdogs say Gen. (ret) Wiranto tops the list of presidential candidates who have practiced vote buying in their campaigns, while President Megawati Soekarnoputri was deemed the most prone to misuse state facilities.

The Indonesian Corruption Watch (ICW) and Indonesian Transparency International (TI) said here Thursday that Wiranto, nominated by the Golkar Party, spent almost Rp 60 million (US$6,300) distributing cash and gifts to prospective voters on his campaign trail during the first two weeks of the month.

Head of Wiranto's national team Slamet Effendi Yusuf said the allegations were "all lies." "How come dozens of journalists covering our campaigns have never raised this ... And where does Golkar get so much money to throw away?" The allegations were aimed to discredit Golkar and the Wiranto-Solahuddin Wahid ticket, he said.

The first round of presidential campaigning began on June 1 and ends on July 1. Megawati, nominated by the Indonesian Democratic Party of Struggle (PDI-P), and running mate Hasyim Muzadi top the list of candidates who have misused state facilities.

Megawati was flown in an Indonesian Air Force chopper when she was campaigning in Medan, North Sumatra, Hasan Gamet of TI said. TI said it discovered Wiranto's team had pledged to give scholarships to 40 students in the East Java town of Jember, paying them Rp 600,000 each for a one-year school term. It also said the team gave out "transportation cost" for his supporters while campaigning in Bantul, Yogyakarta.

The Megawati-Hamzah team came second in the gift stakes, allegedly spending more than Rp 17 million distributing free medicines, T-shirts, instant noodles and other souvenirs.

The pairing of Amien Rais-Siswono Yudhohusodo spent Rp 9.9 million in two campaigns and the pairing of Susilo Bambang Yudhoyono-Jusuf Kalla spent Rp 8 million, the watchdogs said. No data was available for United Development Party nominees Hamzah Haz and Agum Gumelar.

The NGOs said candidates had deliberately set up two teams to handle their campaigns, one of them in charge of vote buying. The NGOs have made reports to the General Elections Supervisory Committee (Panwaslu) about the allegations. Panwaslu member Didik Supriyanto said the official supervisory committee would soon follow up the reports. Didik said Panwaslu had filed 50 complaints to the police on vote buying allegations for the April 5 legislative elections alone.

"Only 10 of the complaints have reached the court, while other investigations were abandoned by the police, illustrating the difficulty of proving vote buying is taking place," he said. If a candidate was caught red-handed buying votes, he or she would immediately be disqualified from the race, Didik said.

SBY's trustworthy face lures Indonesians ahead of poll

Agence France Presse - June 20, 2004

He's 54 years old, somewhat heavyset, with a pudgy face. To a startling number of Indonesians disillusioned with politics, the face of Susilo Bambang Yudhoyono is one they believe they can trust.

Analysts say it could soon be the face of Indonesia's next president. Opinion polls give the retired general -- popularly known as SBY -- a massive lead ahead of his rivals for the July 5 presidential election.

"Personal charms are a very important fact people consider and SBY has that: not emotional, and people see him as sincere and trustworthy. His face says so," said Daniel Sparringa, a sociology lecturer at Airlangga University.

Yudhoyono resigned as President Megawati Sukarnoputri's security minister less than a month before the April 5 general election. He quit after the president's husband, Taufik Kiemas, accused him of acting like a child for complaining about being shut out of cabinet meetings.

His Democrat Party, contesting its first election, went on to win 7.45 percent of the vote thanks to the backing of millions of disaffected Megawati supporters.

Opinion polls have given Yudhoyono between 41 and 47 percent support, more than twice as much as his nearest rival. If no candidate wins at least 50 percent on July 5, the top two candidates face a run-off on September 20.

"Many Indonesians want a military man to lead the country. Second, he is considered moderate. Third, he was seen as humiliated by Megawati," Amir Santoso, a lecturer in politics at the University of Indonesia, said in explaining Yudhoyono's popularity. "SBY knows how to show he is one of the people," Sparringa said.

Still, he is not always an electrifying speaker. On the opening day of the election campaign, Yudhoyono read to reporters a 50- minute speech outlining his vision of the country. When he was finished, he wiped his face with a handkerchief.

The speech reached out to the country's downtrodden with dramatic promises to cut unemployment and poverty while battling corruption. "We come with clean thoughts, in the spirit of peace, and with an offer of enthusiasm, resolve, hard work, along with concepts and steps for a safer, more peaceful Indonesia, one more just and democratic and prosperous," he said.

H.S. Dillon, executive director of pro-reform group Partnership, said Yudhoyono would create an inner cabinet of technocrats. Sparringa said the former general would run government "more professionally, rather than politically".

Yudhoyono will come first in the first round and then battle Megawati, retired general Wiranto -- SBY's one-time military boss -- or former Muslim leader Amien Rais in the second round, according to Santoso.

It will not be an easy victory, said Dillon, noting the sudden reopening of a long-dormant investigation into the July 27, 1996, army-backed attack on Megawati supporters in Jakarta. Yudhoyono was the Jakarta military's chief of staff at the time of the incident, which sparked riots that killed five. He has denied prior knowledge of it.

Dillon said it remains unclear how Yudhoyono will do in heavily- populated Central and East Java, strongholds of Megawati's Indonesian Democratic Party of Struggle and of the country's largest Muslim organization, Nahdlatul Ulama (NU). NU support is divided between Megawati and Wiranto.

Yudhoyono is also battling a whisper campaign that his running mate, Yusuf Kalla, is anti-ethnic Chinese and that Yudhoyono himself supports Islamic law.

An intensification of those rumours could push worried ethnic Chinese and Christian minority voters back to Megawati, Sparringa said. "I think what will be critical is the last week before the election," he said.

'Ordinary' candidate wins extraordinary support

Financial Times (UK) - June 18, 2004

Shawn Donnan and Taufan Hidayat -- The trap worked like a charm. A sly detour imposed on the campaign convoy by local police, a handful of supporters brave enough to step into traffic and force it to a stop, and before Susilo Bambang Yudhoyono's aides could protest too much, he was being bundled from his bus and into a nearby home to address a giddy gathering.

"This is too much. I am only an ordinary human being," Mr Yudhoyono protested in vain 20 minutes later after effusive introductions from local dignitaries.

But with campaigning under way for the July 5 first round of presidential elections in Indonesia, Mr Yudhoyono is emerging as a figure anything but ordinary. On the back of an image loaded with gravitas, the former Suharto-era general has built what looks like an unassailable lead in opinion polls.

Polls show him with more than 40 per cent support among the country's 150m registered voters, while his main rivals in the five-candidate field -- incumbent Megawati Sukarnoputri and former defence minister General Wiranto -- lag far behind.

His aides expect him to struggle to garner the simple majority he needs to avoid a September run-off with the number two finisher. Pollsters, however, say disappointment with Mrs Megawati's administration and discomfort with General Wiranto's human rights record (a UN-backed court has issued a warrant for his arrest in connection with a 1999 massacre in East Timor) are rife and "SBY", as he is known to most Indonesians, is a clear favourite.

Mr Yudhoyono's popularity is partly drawn from his role in recent years as the chief security minister for the notoriously shy Mrs Megawati, during which time he became the earnest and reassuring face of her administration in times of crisis. "He is always saying what she should be saying," Frans Seda, one of Mrs Megawati's top advisers, grumbled in an interview earlier this year. Mr Yudhoyono has built on that image since leaving her administration in March.

He has promised a "second wave" of reforms and to address the current appalling climate for domestic and foreign investors, and the country's endemic corruption. And to tackle security concerns such as terrorism, offering "peace, justice, and prosperity" to Indonesians worn down by the country's chaotic entry into democracy following the 1998 fall of strongman Suharto.

Mr Yudhoyono has also sought to distance himself from his military past and his former colleague, Gen Wiranto, and to address concerns over the possibility of a Suharto-era general ascending to the presidency. "I do hate also militarism," he told the Financial Times in a pre-campaign interview.

Diplomats in Jakarta liken the prospect of a Yudhoyono presidency to that of Fidel Ramos, the respected former Philippines president. He is also seen by most as a preferable option to Gen Wiranto, the candidate of Mr Suharto's Golkar party, at a time when many see the need for a firm hand to take Indonesia forward.

On the campaign trail, Mr Yudhoyono has opted for intimate, town hall-style meetings over the raucous rallies usually associated with electioneering in the world's largest Muslim constituency.

On a bus tour through key Javanese battlegrounds this week, he entertained questions from voters on topics ranging from his recent pilgrimage to Mecca to the price of fertiliser. He had lunch with religious leaders at a roadside restaurant and crooned a famous Indonesian love song for a noisy audience at another lunch less than an hour later.

He also sought, gently, to reduce expectations for what his election would mean. "There are a lot of problems in this nation," he told the audience. "It will not be easy to solve them."

But soaring expectations may be hard to suppress. As his rivals struggle to generate enthusiasm for their campaigns, the simple passing of Mr Yudhoyono's bus -- with its broken-down massage chair and "Together We Can" slogan on the bumper -- draws effusive crowds.

Outside an Islamic boarding school on Tuesday, Mr Yudhoyono greeted supporters as the sun set over paddy fields and swallows circled overhead.

Idu Farida, one of the waiting crowd, gushed: "He is wise and fair. You can see it in his eyes. All of my family -- my mother, my grandmother, all of them -- like SBY. We all like him very much."

[Additional reporting by Taufan Hidayat.]

Feature: Democracy the Indonesian way

Weekend Australian - June 19, 2004

Sian Powell, Banda Aceh -- Courted by the Western press, feted by prominent Indonesian intellectuals and religious leaders, and idolised by crowds of villagers and farmers, it seems Susilo Bambang Yudhoyono can do no wrong.

Indonesia's favourite presidential candidate flew into the blood-soaked province of Aceh yesterday to garner support for his bid for the top job.

As chief security minister, Yudhoyono last year launched the military operation to crush the separatist rebels in Aceh, a show of force that has killed about 2000 people so far -- mostly civilians, according to the activists.

Yet few blame the smiling politician. Yudhoyono tried hard to keep a shaky ceasefire going, but when it failed he became Jakarta's linchpin for the Aceh crackdown.

Yesterday's visit was his first free of the trappings of security minister or army general. Wearing a peci, or Indonesian Islamic hat, the former soldier concentrated more on the religious nature of his visit, addressing clerics and praying in one of the most beautiful mosques in the world. Yet dozens of paramilitary police in bullet-proof vests served as a reminder that the brutal crackdown begun by Yudhoyono last May continues.

An apparently gentle intellectual with an impassive expression, Yudhoyono is widely seen as a soldierly type with deep reserves of inner strength. Perceived as a leader who can match wits with diplomats, he speaks impeccable English and usually wears immaculate suits.

Unlike one of his chief rivals, the former armed forces chief Wiranto, there are no documented atrocities looming out of a dark military past to haunt his candidacy. Unlike his other chief rival, President Megawati Sukarnoputri, there isn't a long list of dubious appointments and missed chances or a stagnant economy that has left half the nation living below the poverty line.

Yudhoyono appears to be not only the preferred candidate of most Western nations but reputable polls suggest he is also Indonesia's favourite presidential aspirant -- with at least 40 per cent of the electorate giving him the nod.

He roared out of the blocks earlier this year when his campaign officially started and he hasn't looked back since. Yet many question the ease with which SBY, as he is popularly known, slipped into the lead and assumed the mantle of statesman- candidate.

He was a New Order general, a commander in the time of brutal military crackdowns, one of the strongarm dictator Suharto's hand-picked soldiers. When East Timor was writhing under the Indonesian military, Yudhoyono commanded Battalion 744 in Dili for nearly three years, from 1984 to 1986. In an authorised mini-biography, he says he learned about human rights in East Timor and prevented his troops from executing a guerilla commander on the spot.

This was such a novel departure from the norm, according to the biography, that no less a military authority than Zacky Anwar Makarim (a name notorious in the annals of East Timor) flew in from Bali to congratulate him on starting a noble tradition of taking prisoners.

A rising star in the army ranks, by the early 1990s Yudhoyono was one of president Suharto's chosen few, partly to counter-act jealousy of Suharto's soldier son-in-law Prabowo. By the late '90s, Yudhoyono was chief-of-staff in the Jakarta command and in charge at the time of the July 27, 1996, raid on the headquarters of Megawati's Democratic Party of Indonesia headquarters.

The bloody ruckus left at least five dead and 23 missing. Many believe the order for the attack came directly from Suharto, who was concerned about the burgeoning popularity of Megawati. Indonesian police this year accelerated their investigation into the tragedy, recently handing several dossiers to the prosecutor's office. But to the surprise of many, SBY's name is not among the suspects.

"For July 27, as the chief-of-staff, I think he certainly must have known about the plans to attack the PDI offices," says human rights activist Munir. "He was the one responsible for operations."

These days Yudhoyono tries to distance himself from his military past. At a recent conference he took issue with a question from the floor in which he was referred to as a military man. He had left the army five years ago, he pointed out firmly. But as Indonesia's chief security minister until earlier this year, when he was forced out by Megawati, he wielded extraordinary power over the armed forces and has to take a lot of responsibility for the military crackdown in Aceh.

Jun Honna, a democratisation expert at the University of Indonesia and an academic who has researched widely on the evolution of the Indonesian military, says he has never heard Yudhoyono's name connected with specific brutality. Yet Honna is concerned by the presence of a circle of conservative generals around Yudhoyono's campaign.

"They see an opportunity with him," he says. "If SBY becomes president and if he wants to implement military reform, he will face resistance from these generals, especially if he can't resist them now."

Honna points out that Yudhoyono's Democrat Party website once featured a promise on military reform -- but it was the work of a hacker rather than party policy-makers. This was explained to army chief Ryamizard Ryacudu when he rang to inquire. Anyway, Honna says, international pressure for military reform in Indonesian got shunted after September11, 2001, when the West decided combating terrorism had sidelined the problems of military brutality and impunity.

Human rights activists are concerned about Indonesia's choices in the July 5 direct presidential election. The three frontrunners are two New Order generals and a self-described beauty who has had protesters imprisoned for stamping on her posters. Widely seen as the best of the bunch, Yudhoyono usually makes all the right noises about the importance of democracy, the crucial battle with terrorism, the need to crush corruption, maintain the rule of law and encourage foreign investment. Occasionally, though, he sounds a sour note.

"Democracy, human rights, concern for the environment and other concepts promoted by Western countries are all good, but they cannot become absolute goals because pursuing them as such will not be good for the country," he was quoted as saying by state news agency Antara in January, when he was still the nation's security tsar.

Dita Indah Sari, a labour organiser and activist, doesn't like the smell of khaki that hangs about Wiranto and Yudhoyono. Like the students in a recent spate of anti-military demonstrations, she believes that if either of them became president, it would signify a setback for Indonesia's infant democracy.

"They are people with a problem, their track records have problems, both politically and in reality," she says. "They are from the military, which finished democracy in this country for 32 years." She worries that the contest between the generals and Megawati has become a contest between military and civilian rule, and says Yudhoyono and Wiranto have both capitalised on the perceived failure of civilian administrations since 1999.

The candidacy of the generals is not good for Indonesia, Sari adds. "It means two things; first, it strengthens the legitimacy of the military in politics in Indonesia," she says. "And, second, it strengthens the assumption that conflicts can be resolved only if the military joins in."

Although the Indonesian military has been instructed not to vote in the forthcoming election, there are signs many soldiers have plumped for SBY and instructed their families to vote for him.

There is a huge military complex in Brawijaya, in East Java, and Honna says it was a Democrat Party stronghold in the April general election, with most military families lining up behind Yudhoyono's party. He has seen village military leaders campaigning for Yudhoyono in East Java.

Their support certainly doesn't stem from the former general's brilliance as a military commander. "I don't think there is a single operation which has been successfully handled by SBY," Honna says, pointing out that the inter-religious strife in Ambon and Poso was largely settled in 2002 by Yusuf Kalla, once a Megawati minister and now Yudhoyono's running mate.

The earlier flare-up in West Kalimantan was handled at a local level, and most analysts agree the ongoing Aceh operation has failed, with 2000 dead, not a single senior commander captured and the separatist rebels still fighting back.

Veteran human rights activist Munir, executive director of Imparsial -- Indonesian Human Rights Watch -- says that regardless of military prowess, Yudhoyono was an integral part of the Suharto military fortress.

He remembers the former general saying in 1997 that there was no need to replace Suharto's New Order regime; that there was nothing wrong with the New Order. A main concern, he says, lies with the righting of past wrongs. "The legal system in Indonesia means the president is in a very strong position to decide whether atrocities from the past should be heard in a human rights court or not," he says. A president who was a leading light in the regime may not want the spotlight shone on the dark places of the New Order, and that goes for Wiranto as well, Munir adds.

Sari says Indonesia should take care to look beyond Yudhoyono's impressive facade. "What appears is the image of SBY as cool, quick to smile, soft, polite, a good singer, oppressed by Taufik Kiemas, Megawati's husband, but that's just talk. That's fake. What is real is martial law and July 27. That's the real thing."

Students reject Amien-Wiranto debate in Surabaya

Jakarta Post - June 18, 2004

Surabaya -- Students of the Surabaya Institute of Technology (ITS) have rejected a planned debate between Golkar Party candidate Wiranto and National Mandate Party (PAN) candidate Amien Rais at their university on Saturday, ITS student leader Rendara Sanjaya said here on Friday. "We are committed to not letting these two figures talk at the ITS campus as it would likely be nothing more than disguised campaigning," the chairman of the ITS student executive board said, adding that their decision was in line with electoral law.

He noted that based on the law, presidential and vice presidential candidates were not allowed to use government facilities, educational institutes and places of worship for campaigning purposes.

"We are going to call on all students of ITS not to attend the debate if it goes ahead," Rendara said.

On Wednesday, students from the Sultan Syarif Kasim State Islamic University in Pekanbaru, Riau, prevented a discussion involving vice presidential candidate Jusuf Kalla, the running mate of Susilo Bambang Yudhoyono, from going ahead after staging a demonstration against his presence on their campus.

Despite Kalla's explanations, the students continued to insist that Kalla leave, and he finally acceded to their demands.

Behind the Wiranto-Akbar alliance

Straits Times - June 18, 2004

Devi Asmarani, Bengkulu -- Standing before some 1,500 party supporters last week, Golkar chairman Akbar Tandjung was all praise for the man who only two months ago trashed him at a party convention.

He declared that Golkar presidential candidate Wiranto, whom he accompanied to this Sumatra province, was the best pick among Indonesia's five presidential candidates. "He comes from the military but he has the qualities of a democrat to lead the country," he told the crowd.

He might well say that, given that he is chairman of the party that is backing Mr Wiranto, officially at least. At such public events, Mr Akbar is a model supporter of the retired general, his political nemesis.

He accompanied the presidential candidate to many events, urging party supporters to vote for Mr Wiranto and his running mate Solahuddin Wahid, come July 5. His statements even helped assuage fears that Mr Wiranto's unexpected victory in Golkar's April convention would split the party.

Said senior Golkar MP Happy Bone Zulkarnaen: "Mr Akbar shows he has a big heart and a strong commitment by supporting Mr Wiranto even after his defeat. This helps him build sympathy from within the party."

But behind the scenes, questions are being asked about whether all of the party's supporters will back Mr Wiranto. Poor turnout at Mr Wiranto's rallies, Golkar's lack of financial contribution and lackadaisical support from some of the party elite have set tongues wagging. Some members of the Wiranto camp have begun to charge that the party has been giving it "half-hearted support".

With Mr Wiranto still trailing far behind front-runner Susilo Bambang Yudhoyono in popularity, Golkar's political machinery will be crucial in boosting his chances of becoming one of the top two candidates to slug it out in a run-off election in September.

But now, even Golkar members admit that the party's formidable political machinery is not nearly as effective as it could be. Money, they claim, is the main problem. During the April campaign, some 20,000 candidates for the legislature -- from local to national level -- bankrolled party campaigns across the country. Said Mr Bomer Pasaribu, a senior Golkar member who is also in the Wiranto campaign team: "Our coffers were drained of money after the April election. These people have barely recovered."

The Straits Times understands this was made clear by Mr Akbar when he and Mr Wiranto held a "reconciliation meeting" days after the Golkar convention. In plain terms, Mr Akbar told Mr Wiranto that Golkar could not be expected to foot the bill for Mr Wiranto's campaign, say party insiders.

Mr Akbar also stressed that Mr Wiranto should not interfere in his leadership in the party, and that Golkar members would be given key positions on his campaign team. Mr Akbar even asked that he be given a say in the choice of Cabinet members should Mr Wiranto win the presidency -- all in return for his official endorsement of the candidacy.

But despite the concessions made at that meeting, persuading Mr Akbar's loyalists to back Mr Wiranto proved a little harder than expected. Some party leaders have opted to stay away from his presidential campaign, in some cases out of disappointment at not being given key roles in the campaign team.

There are also fears of the party's future with Mr Wiranto in the picture, particularly with the coming leadership succession later this year.

And there are lingering fears of a fissure within the party along factional lines. Should Mr Wiranto rise to power, some expect a major purge of party cadres with close links to Mr Akbar. Said a senior party official: "Mr Wiranto may have given his commitment to stay out of Golkar, but in politics you cannot rely on promises. The fact is that there are people in Golkar who feel they have been marginalised or hurt by Mr Akbar's leadership. These same people, who played a role in Mr Wiranto's victory in April, are looking for opportunities to get Mr Akbar and his people out of the picture."

Buying more than food from Wiranto outlets

Straits Times - June 18, 2004

Salim Osman -- Tucked in a side street in south Jakarta is a bamboo hut that has been attracting scores of working-class Indonesians daily.

It is a popular eatery, or warung and one of thousands that dot nooks and crannies in the Indonesian capital providing decent food and drink at budget prices for lower-income workers.

But this outlet is like no other. It is called Warung Wiranto, named after the presidential aspirant who is behind a chain of more than 2,000 similar eateries across the country.

It is festooned with banners bearing pictures of Mr Wiranto and his running mate, Solahuddin Wahid. The banners are yellow -- the colour of Golkar -- and green, the symbol of Nadhlatul Ulama, Indonesia's largest Muslim organisation.

Operating like a franchise, the eatery serves staples such as nasi goreng, nasi rames and mie kuah, as well as hot and cold drinks. Its other attraction is the sale -- at a discount -- of T-shirts and key-chains as well as CDs of songs by Mr Wiranto and a VCD about him.

Customers might even find the former general seated next to them. "The warung is just a place for Pak Wiranto to interact with the community. This is no election gimmick. Pak Wiranto likes to eat in warungs and we decided to set this up for that purpose," said aide Tito Sulistiyo.

Since the middle of last month, about 200 such eateries have sprung up in the capital and at least 2,000 others across the rest of the country. According to Mr Tito, the 600-million-rupiah (S$110,000) venture has franchises all across the nation, in Aceh, Kalimantan, Papua and even far-flung Sulawesi.

The manager of the Jalan Wijaya warung, Mr Omen Sontiani, told The Straits Times that his eatery made four million rupiah a day. "It's a source of income for our supporters and also provides employment for Indonesian youths working at our roadside cafes," he said.

Critics argue the warungs are nothing more than a medium for the Wiranto team to fish for votes. "We don't deny this. But if this eatery can bring in the support for Pak Wiranto, it will be a bonus," said Mr Omen.

The campaign teams of the other four presidential candidates concede that the warung strategy is a clever way of getting voter support without breaching electoral rules. "We can't afford to set up similar warungs to rival them because we don't have the money," said Mr Alvin Lie, an aide of presidential contender Amien Rais.

Mr Lie, of the National Mandate Party (PAN), said that his political boss sought other ways of reaching out to the voters. This included mingling with people at wet markets -- a tactic employed by other contenders such as front runner Susilo Bambang Yudhoyono and incumbent President Megawati Sukarnoputri.

While Mr Wiranto has his warungs to garner support, some allege his rivals have resorted to buying votes. Such vote-buying includes the distribution of basic commodities, free medical services and even transportation money of up to 35,000 rupiahs to entice voters to attend campaign events.

Campaign workers for Mrs Megawati are said to have provided free anti-dengue spraying in many areas of South Sumatra. Over in Surabaya, they have even capitalised on the current Euro 2004 soccer fever by setting up a large screen at a sports field.

Political observer Indria Samego of LIPI, Indonesia's Institute of Sciences, commented: "Our election watchdog should scrutinise how candidates fish for votes. Is running the warung a disguised form of vote-buying like giving out packets of food or fertiliser?"

Surveys predict Bambang landslide victory

Straits Times - June 17, 2004

Robert Go, Jakarta -- Pollsters, who gained credibility after they predicted a win for the Golkar party ahead of April's parliamentary elections, are now forecasting a landslide victory for former military general Susilo Bambang Yudhoyono in the presidential elections. The numbers so far are stunning.

Jakarta-based Centre for Political Studies (CPS), for instance, said last week that SBY, as Mr Bambang is popularly known, would have bagged nearly 47 per cent of votes if the election were held this week. CPS figures placed Dr Amien Rais, head of supreme legislative assembly MPR, second with about 20 per cent. Incumbent Megawati Sukarnoputri, who has led the country for the past three years, would have ended up third with around 14 per cent.

Some other surveys may disagree on which candidate will occupy second to fifth spots, and the percentages of votes they will collect. They include groups with global experience, like the International Foundation for Election Systems (IFES), or those with a strictly domestic scope, such as the Indonesian Survey Agency (LSI).

But most agree that Mr Bambang looks poised to walk away with the crown in July. And pollsters are confident that, like in April, they would be on target again on July 5.

The retired general's rise in popularity has been spectacular. In December last year, IFES gave him a rating of 5 per cent. In May this year, the figure surged to 41 per cent.

LSI, whose projections ahead of the parliamentary elections results had an average error rate of 1.65 per cent, has tracked Mr Bambang moving from 7 per cent last November to nearly 41 per cent in April. The executive director of LSI, Mr Denny J.A., told The Straits Times that results from its May polling, which was privately commissioned by a domestic television station and not made public, had the front runner increasing his lead to 49 per cent at the end of last month.

Both IFES and LSI are expected to publicise their latest survey results a few days before July 5. Mr Denny said: "The science of polling in Indonesia has improved dramatically, and polling groups' success from April presents a good evidence of this."

Mr Alan Wall of IFES said both international and domestic pollsters are applying better methodologies and therefore getting more accurate projections. The Indonesian public's greater expectations of polling exercises, and changes that have taken place in the country's media and media laws are also positive factors.

Mr Wall said: "When newspapers or television stations talk about poll results, they are now required to also talk about how the polls are done. This introduces greater accountability and cuts down the chance that poll results can be manipulated."

The public, pollsters point out, is also getting more sophisticated and is more likely to rely on surveys that are done on a face-to-face basis, rather than over the telephone, or through Web-based or cellular SMS methods.

Analysts argue that polls not only provide a snapshot of political sentiment, but may also influence the outcome of elections, even if indirectly. At least 30 per cent or more of Indonesia's 147 million eligible voters remain undecided and could make their decisions based on others' preferences. Some analysts call it the "snowball effect", while others talk about the "herd mentality".

But no matter how the phenomenon is described, there is a sense that undecided voters may flock to Mr Bambang simply because polls are showing that other Indonesians are heading that way already. Mr Denny said: "The effect may not be a direct one. It isn't that poll results are convincing people one way or another about the candidates. Rather, it may have to do with how poll results are publicised by the media, and this generates greater name recognition for some candidates, like Mr Bambang, right now."

But pollsters acknowledge that other candidates may yet eat into Mr Bambang's lead in the next couple of weeks of campaigning. Mr Sukardi Rinakit of CPS said: "The polls are in favour of [Mr Bambang] now, but things may change as we get closer to the election date itself."

Students thwart appearance by Kalla

Jakarta Post - June 16, 2004

Pekanbaru -- Hundreds of students from the Sultan Syarif Kasim State Islamic University prevented a discussion involving vice presidential candidate Jusuf Kalla, the running mate of presidential candidate Susilo Bambang Yudhoyono, from going ahead after staging a rally against his presence on their campus on Wednesday.

Antara reported that the Democratic Party vice presidential hopeful eventually decided to leave the venue under tight guard.

According to the students, they did not want their university to be used for campaigning, and had therefore asked Kalla to leave. Despite Kalla's explanations, the students continued to insist that Kalla leave.

Kalla was slated to attend a discussion on the manifestos of the candidates standing in the presidential election.

Use of NU image protested

Jakarta Post - June 16, 2004

Jakarta -- Yusuf Hasyim, the head of the Tebu Ireng Islamic boarding school in Jombang, East Java, filed a complaint with the General Elections Commission on Tuesday over the use of images of Nahdlatul Ulama (NU) founder Hasyim Asy'ari.

Images of the NU founder have been used nationwide in posters distributed by the campaign team for presidential candidate Megawati Soekarnoputri and her running mate Hasyim Muzadi.

"Hasyim Asy'ari is a national hero and he should not be used as a political commodity," Yusuf, who is also Hasyim Asy'ari's son, said. Yusuf called on Megawati's campaign team to take down the posters using his father's image and demanded they run apologies in national print and television media for seven days.

Chinese tycoons place their bets

Straits Times - June 15, 2004

Eugene Low -- The cukongs (wealthy Indonesian businessmen) are back in force. Business tycoons in Indonesia are aligning themselves with key presidential candidates, who are also out to woo them for financial backing.

Campaigning in such a large country is an expensive business, say political observers. Each candidate needs hundreds of billions of rupiah to ensure that his or her campaign machinery runs smoothly.

A portion of the money is spent on expensive television advertising, said a close aide of one candidate. But the bulk of the funds is said to be used to help sway voters.

Transparency International Indonesia alleged last week that all five candidates were engaged in money politics by handing out free basic commodities, medical services and transportation.

Wealthy businessmen seeking to ingratiate themselves with the political elite offer a ready source of funds for presidential hopefuls mounting a major charm offensive across the sprawling archipelago. The sums of money changing hands are huge, with some donations amounting to more than tens of billions of rupiah.

And with the outcome of the election still anybody's guess, the tycoons are hedging their bets. Many are said to support more than one candidate.

An analyst said: "The businessmen don't know which one is the winning horse. So it is safety first -- they are putting their eggs in several baskets." Should their candidate win, the tycoons will expect some returns -- either in the form of preferential access to lucrative government contracts or policies that help their businesses.

Tycoon Tomy Winata, for instance, is rumoured to be supporting Mr Susilo Bambang Yudhoyono as well as Mr Wiranto, although both candidates have denied it. Lippo Group chief executive James Riady and the Gajah Tunggal group's Sjamsul Nursalim are also said to be backing several candidates. The talk is that Mr Bambang, Mr Wiranto and President Megawati Sukarnoputri all have close links with Chinese businessmen.

Welcome to the muddy waters of campaign funding in Indonesia, where the rumour mill churns out plenty of grist. The problem is a lack of transparency when it comes to reporting the sources of campaign funds, political observers told The Straits Times.

Earlier this month, an Indonesian anti-corruption commission announced the wealth of the five pairs of candidates in a bid to improve accountability. The richest among them is vice- presidential candidate Jusuf Kalla, with a total wealth of 122.7 billion rupiah (S$23 million), according to figures announced by the Commission for the Eradication of Corruption.

The General Elections Commission (KPU) also requires candidates to report where their campaign donations come from. However, the rules tend not to be followed strictly. "Under-reporting is common and even if a report is filed, it is usually not very detailed," said a source. "Some donations are also hard to trace because they are given in cash."

Does the resurgent political influence of the cukongs signal a return to the cronyism of the Suharto era? Political observers believe that cronyism was never really eradicated, even after the resignation of former president Suharto. The tycoons are said to have always maintained their relations with the government and key political players.

Salim Group's Liem Sioe Liong, for example, began forging ties with Mrs Megawati when she was still vice-president. Others have also done the same, including timber baron Prajogo Pangestu, property developer Ciputra and textile king Marimuthu Srinivasan.

But thanks to a free press and more political competition, the situation has improved, an analyst said. "In the past, you could do things openly. Now, it has become more sophisticated and subtle."

Still, there is a need for greater transparency and for the KPU to better enforce its rules, said political observer Andi Malarangeng. "Campaign funding is normal in any democracy, but it should be made clear who funds whom," he said. "The funding limits should also be respected to make sure that the president is not indebted to only a few rich businessmen."

Political fatigue thinning out crowds

Straits Times - June 16, 2004

Derwin Pereira, Jakarta -- Where are the crowds? Campaigning for Indonesia's first presidential polls began two weeks ago with a lot of bluster.

The banners of the five candidates and their running mates are still hoisted on flagpoles and trees to remind everyone this is an election year.

But the initial enthusiasm is appearing to fade against a backdrop of political fatigue as Indonesians face the prospect of seeing the race drag on for another four months.

The election has turned out to be a nearly year-long affair, starting off with a general election in April and two rounds of presidential elections in the offing.

Across the distended archipelago, from Java to Sumatra to Sulawesi, people are still turning up -- not to listen to speeches, but to collect free T-shirts, food handouts and other memorabilia.

Otherwise, the rallies are not attracting people, with the public increasingly tired and sceptical of the rhetoric and empty pledges of politicians.

The contenders are still trying to inject a carnival-like mood to their rallies. On Sunday, prominent artistes and starlets such as Sarah Azhari and Silvana Herman tried to liven up a rally of retired general Wiranto. But even their presence did little to attract the crowds. The 15,000 who attended were hardly enough to fill the 100,000-seat Bung Karno Stadium in the capital.

All the presidential front runners have suffered a similar fate. Mr Susilo Bambang Yudhoyono found himself with just a handful of supporters at a rally in Jakarta last week despite the boast of being the most popular candidate.

And President Megawati Sukarnoputri has realised that her brand name is no guarantee of a huge turnout. Even in traditional strongholds, she was struggling to draw crowds. Recently in Tabanan, Bali, just 3,000 to 4,000 people turned up -- despite the initial promise of 10,000 -- to listen to the incumbent. Most of them were children who were too young to vote.

Taxi driver Suyanto, 33, reflecting the sentiments of the wong cilik, or little people, said: "Every day, we see these candidates making promises. They promise better education and welfare. They can even promise us the moon. But that is what our presidents have been doing for the last six years. They have not delivered. So, can you blame us for not being interested?"

Clearly, the political euphoria that surrounded the month-long election campaign in 1999 seems to be glaringly absent in Indonesia today. There are other reasons.

Some argue that a decision by the General Elections Commission (KPU) to restrict campaigning to five geographical zones has taken the buzz out of the contest as candidates must take turns to campaign in these zones. That ensures no clashes of supporters, but also takes some of the excitement out of the hustings.

A more pressing consideration is money -- or the lack of it. After the millions spent on the April parliamentary polls, politicians need a fresh injection of capital to see through possibly two rounds in the presidential race. More than half the money has been spent on costly TV commercials, leaving little for campaign rallies. Well-placed sources reveal that money is also slushing about to sway voters.

Internal party politics could also be a reason for the declining numbers. In some cases, parties backing a particular candidate might not be entirely behind the individual. Intra-party factionalism has meant, for example, that Golkar is less than united in its support for Mr Wiranto. Party branches, lukewarm in their backing for him, have been slow in mobilising supporters to turn up at rallies.

Will a lacklustre campaign have any bearing on voter turnout on July 5? According to the KPU, about 23.5 million, or almost 16 per cent of the registered voters, did not vote in the general election. Observers believe the figure could remain the same or move up a few percentage points.

Interestingly, for the first time ever, thousands are threatening to boycott the election, with confidence in the political elite dropping. Farmers in the capital demonstrated recently and declared that they would not cast their votes unless they were given ownership of the land that they work on.

Neighbourhood communities are protesting against kampung demolitions, and migrant workers and their families are demanding better protection.

The campaign has done little so far to win over these demonstrators and a disinterested public. Many might have already made up their minds on who they want as president. But even the undecided do not see benefits in attending rallies -- other than to get that free T-shirt, of course.

Bambang, Amien face off in debate

Reuters - June 15, 2004

Jakarta -- The two front running candidates in Indonesia's presidential election sparred yesterday over policies to deal with separatism in Aceh province and endemic graft in the world's fourth most populous country.

Simmering separatism in various parts of Indonesia and widespread corruption are often cited by analysts as factors holding back desperately needed foreign investment.

Former general Susilo Bambang Yudhoyono and supreme legislature chief Amien Rais, who ranked first and second respectively in an opinion poll last week, were commenting on the issues in a debate sponsored by the Jakarta Arts Council. The other presidential candidates skipped the debate.

Mr Bambang appeared to opt for a multi-pronged approach to Indonesia's most pressing separatist unrest when an Acehnese poet said Jakarta had exacerbated the culture of violence in Aceh through its drive to crush separatist rebels.

"The Aceh problem can't be solved by security operations alone," Mr Bambang said. "It really must be approached comprehensively. If I am president, I'll continue to solve the situation in Aceh in the most peaceful way possible."

As security minister until a few months ago, he helped to design a policy that involved economic, social and military operations, but which critics said had heavily stressed the military option. Jakarta imposed martial law in Aceh, at the northern tip of the island of Sumatra, after talks with the rebellious Free Aceh Movement (GAM) collapsed in May last year.

The government lifted martial law from the resource-rich province last month, but kept tens of thousands of troops there, although it said 5,000 rebels had been killed or captured.

Dr Amien took a swipe at Mr Bambang's involvement as security minister in talks with GAM, assisted by an international mediator. "When we have a conflict among ourselves, don't ever involve a foreign institution. We need to solve our own problems ourselves with our own abilities," Dr Amien said, drawing applause. Mr Bambang said the policy was decided before he became minister.

Both candidates, however, vowed to combat the culture of graft in Indonesia, where many public and private sector processes run into trouble without a bribe to grease the wheels.

In the opinion poll last week, Mr Bambang won 46.6 per cent of the support while Dr Amien, previously seen as an outside chance, came second with 19.7 per cent of the support. President Megawati Sukarnoputri trailed with 13.8 per cent.

Mega woos crowds with old favourites

Straits Times - June 15, 2004

Robert Go, Yogyakarta -- Trailing her opponents by as much as 30 percentage points in the latest opinion polls, President Megawati Sukarnoputri has much ground to cover. But with just two weeks left in the campaigning period, she's hitting it walking.

In Bali and Yogyakarta last week, the President changed little from her standard speech and used the same jokes to draw chuckles from the crowd. She basked as thousands chanted "Mega! Mega! Mega!" Her focus, observers said, should be two-pronged: To reclaim voters who deserted her Indonesian Democratic Party- Struggle (PDI-P) party in last April's parliamentary election, and to make as many inroads as possible in wooing the country's millions of undecided voters.

A balance between shaking hands at PDI-P strongholds and exploring uncharted territory, where crowds may be sparse and likely to be less adoring, analysts suggested, should be the way to go for the incumbent.

But if Ms Megawati's stops in Tabanan, Bali, last Friday and Bantul, Yogyakarta, on Sunday are anything to go by, it is clear that the President has chosen to campaign as the front runner who seeks to confirm that status.

Even on safe ground, however, the turnout for rallies are lower than expected and the crowds are not reacting as enthusiastically as they did a few years ago. These signs could spell trouble for the woman who has led Indonesia for the past three years.

Tabanan, which is sandwiched between population-heavy East Java and the economically challenged East and West Nusa Tengara provinces, is just one of three districts in the country, out of more than 360, where the PDI-P did not lose support in April. The PDI-P received 85 per cent support in 1999 in Bali, but only around 55 per cent in April.

But nevertheless, rally organisers in Tabanan promised 10,000 or more Megawati supporters from all over the tourist island. The numbers never materialised.

Only between 3,000 and 4,000 people showed up to catch Ms Megawati's hour-long stop, and a fair portion of them were brightly clad children or babies in mothers' arms -- in other words, too young to cast votes. A rock band and three dangdut divas struggled to inject energy into the supporters.

In her speech in Bali, Ms Megawati turned to her lineage to win over the crowd -- she is one-eighth Balinese and her father, Mr Sukarno, was Indonesia's first president. "I'm Balinese. I've got Balinese blood in me. This is a fact that cannot be ignored," she said. She added that the suggestion that she had to campaign to win votes on the island was "strange", as she "should not have to campaign on her own home turf".

The candidate suggested that her party's embarrassment in April was a betrayal of Mr Sukarno's memory and relationship with the Balinese. "How can you forget him and all that he has done for Bali?" she said.

It was a similar, albeit more energetic, scene in Bantul, a district on the outskirts of Indonesia's educational and cultural centre of Yogyakarta on Sunday. Ms Megawati's appearance drew only a slightly larger crowd of about 5,000 people.

Ms Megawati, who has spent much of her time as President behind her palace walls, may be paying the price for her seclusion and shyness.

Mr Wayan Artha, a trader who took both his children to the Tabanan rally, said at the end of Friday"s event: 'I just came to watch. I might vote for her still, but she has been disappointing as President. I'm waiting to see what the other candidates have to say, but Megawati was still not impressive today."

But many remain solidly behind her, despite the fact that she has slipped from the position of being front runner in the presidential race, which as incumbent she held for some time. Almost 20 million people voted for her PDI-P in April, and observers said they will remain loyal to her next month.

Mr Joko Santoro, a performer with a travelling drama troupe who showed up at the Bantul rally with the PDI-P bull and "Mega Hasyim" painted on his back, said: "I'm with Mega all the way. I don't care what other people say, I think she has done good for the people."

Megawati slapped with ban for breaking rules

Melbourne Age - June 16, 2004

Matthew Moore, Jakarta -- Indonesia's election authority has banned President Megawati Soekarnoputri from holding outdoor rallies in Denpasar in her heartland of Bali in a further blow to her election efforts.

A member of the Bali branch of the election authority, I Gusti Putu Artah, said Mrs Megawati's Indonesian Democratic Party of Struggle (PDIP) had broken the country's tight rules on campaigning by having state employees attend a rally in Denpasar on June 11.

He said PDIP had now been banned from holding further open-air campaign rallies in Denpasar until the end of campaigning on July 2, three days before the country votes in its first direct presidential election.

Although the ban applies only to outdoor rallies in Bali's capital and so will have little impact on her program, the nationwide publicity generated by the ban -- the first against any of the five candidates -- has stung Mrs Megawati's campaign team.

Gayus Lumbuun, head of PDIP's campaign legal team, said the ban was "baseless" and would damage PDIP's image in the eyes of voters. The party said it planned to appeal.

Advertisement Advertisement But Mr Gusti said the electoral authority did not resile from the ban and it was intended to set an example to all candidates and to show the public the law would be enforced.

The first fortnight of the campaign has passed relatively smoothly but the two former generals contesting the poll, Wiranto and Susilo Bambang Yudhoyono (SBY), have both complained of smear campaigns against them in recent days.

Mrs Megawati hopes to win more than 50 per cent of the vote in the first round although the polls show she has no chance of that with her former security minister, SBY, the only candidate with a chance of winning in the first round after polling 49 per cent in one credible opinion poll earlier this month.

Experts play down mud-slinging impact

Straits Times - June 15, 2004

Jakarta -- Experts have played down the impact of negative campaigning targeting candidates in the presidential election, saying it only stated the obvious about the contenders.

"Generally, the content of this negative campaigning is information about the past lives of the presidential candidates or facts about them which most voters already know," political observer Syamsuddin Haris said.

He said examining a presidential candidate's background or track record was a common practice during election campaigns worldwide. "The public has the right to know about the backgrounds of their [candidates]," Mr Syamsuddin said. But he doubted whether these campaigns would adversely affect voting for a candidate, as many voters had already decided on their choice.

His remarks came after a music VCD was circulated in Java that contained hidden messages urging voters not to vote for Golkar Party candidate Wiranto.

Another observer, Mr Imam Prasodjo, said he trusted the intelligence of the electorate despite the negative campaigning. "Disadvantages resulting from negative campaigning can be handled. It is a common thing," he said.

Golkar urges more support for Wiranto

Straits Times - June 15, 2004

Jakarta -- After two weeks of the presidential campaign, Golkar leaders have urged party executives to show support for their candidate, retired general Wiranto and running mate Solahuddin Wahid.

"If Golkar wants to continue existing, given its humble victory in the legislative election, it must back Wiranto," said Mr Andi Matalata, a Golkar executive. "He's the only one who can boost the party's standing if he wins the presidential race."

Golkar edged past the Indonesian Democratic Party of Struggle (PDI-P) to take the largest share of the vote in the April legislative elections, and more than 30 per cent of the seats in the House of Representatives (DPR).

But sparsely attended campaigns have raised questions about whether the party leadership is living up to its pledge to go all out to have Mr Wiranto elected.

Mr Matalata and others say the "lack of strong coordination" among three divisions could hurt the campaign. The three divisions are the national team, Mr Wiranto's "Imperium Team", named after the South Jakarta building where it is based, and the team of the Nation Awakening Party (PKB), of which Mr Solahuddin is an executive. Mr Matalata said he and party leaders had warned of fragmentation because of a "lack of support of Mr Wiranto".

A source in Mr Wiranto's team said the former military chief was aware of Golkar's "half-hearted support" and had entrusted his own team to prepare all campaign activities. "So far, only Mr Wiranto's success team has worked hard to arrange campaigns, and Golkar has contributed hardly anything to cover the costs," he said.

All candidates involved in money politics: TI

Jakarta Post - June 14, 2004

Moch. N. Kurniawan, Jakarta -- Transparency International (TI) Indonesia alleges that all five presidential candidates have been involved in some form of vote-buying, known as money politics, during their electoral campaigns.

Anung Karyadi, TI Indonesia's senior executive, told The Jakarta Post on Saturday that it included distribution of free basic commodities, free medical services and transportation fees.

The five candidates and their running mates are Wiranto and running mate Solahuddin Wahid, Megawati Soekarnoputri and Hasyim Muzadi, Amien Rais and Siswono Yudohusodo, Susilo Bambang Yudhoyono and Jusuf Kalla, and Hamzah Haz with his running mate Agum Gumelar.

Most of the campaign managers, according to Anung, handed out transportation fees of Rp 20,000 to Rp 35,000 to people who came to campaign events.

Anung said other "donations" included the campaign workers for Megawati, who provided free dengue mosquito abatement spraying for 14 days in many areas of South Sumatra, while Amien donated fertilizer in Kalimantan, and campaign activists for Susilo handed out rice in Bali.

"If those activities are carried out during the campaign period, it is considered 'money politics', and is part of efforts to influence people to vote for them," he said.

He said such irregularities were discovered during TI Indonesia's monitoring in 53 areas across the country including North Sumatra, West Sumatra, Riau, Jambi, South Sulawesi, Central Sulawesi and all of the provinces on Java. "We will report the cases as soon as possible to the Election Supervisory Committee [Panwaslu]," he stated.

Such techniques were considered to be widespread during the campaigns for the April 5 legislative election. Almost all the political parties, however, denied that what they had done was in any way a violation, but admitted that they did occasionally reimburse supporters for transportation fees.

Hamzah, who has been nominated by the Muslim-based United Development Party (PPP), denied all charges, saying that the accusations were baseless. "We still need more funds to finance our campaigns, how can we be accused of 'money politics'...," Hamzah was quoted by Antara as saying on Saturday. But he said that there was a budget allocation to reimburse supporters' transportation fees, which is considered legitimate.

Abdillah Toha, a prominent member of the Amien-Siswono campaign team, said they had no policy for reimbursing transportation fees. He also said that he did not have any information about the distribution of free fertilizer allegedly done by Amien and Siswono themselves in Kalimantan. "We have never had such a policy," he said.

Slamet Effendi Yusuf, chairman of Wiranto's campaign team, said that the allegation was defamatory. "Of course we give money to our campaign activists to hire trucks, buses and other things during the campaign. But that is not a violation. You can say that only if we specifically buy votes, but we have not done that," he said.

Sonny Keraf, treasurer of Megawati campaign team, said that the reimbursement of transportation fees should not be categorized as vote-buying. "If we hold a campaign rally, we'll invite supporters to come to the site. I think it is only natural that we reimburse them. These people should not be so childish by saying that we are buying votes," he whined.

He added that in Central Java, the campaign team had provided free lunch for the rally participants, which should be considered an ordinary activity. Regarding free dengue abatement in South Sumatra, Sonny said it was conducted as part of our "social activities" there.

Campaigners for Susilo were not contacted. However, the Panwaslu branch in Megawati's stronghold of Bali is still debating whether the Susilo-Kalla campaign team committed a violation by distributing free rice to people in Denpasar. Some of the Panwaslu members said it was a form of vote-buying, while others maintained that there was no violation.

Warm welcome for Bambang in Sulawesi

Straits Times - June 14, 2004

Salim Osman -- Thousands of people lined the streets as presidential front runner Susilo Bambang Yudhoyono turned up on his first campaign trail stop in the North Sulawesi capital.

His convoy of 200 cars and mini buses weaved through the narrow streets of Manado that were festooned with banners welcoming him, campaign posters and flags of his Democrat Party as residents waved and cheered him along the 20km route from the Sam Ratulangi airport to his hotel.

Cheers of "SBY", his initials, were heard from the throngs of supporters and party loyalists standing at the roadside, while hundreds of motorcycles and cars, bearing no party emblem, joined his official motorcade. Traffic police had to stop many other motorists from joining in as the enlarged convoy clogged up the streets.

It underscored Mr Bambang's popularity in the capital of this far-flung province, disproving his critics, who allege his popularity, as reflected in many opinion polls, is confined to Jakarta and the urban centres.

Manado resident Udi, 25, told The Straits Times: "It was like welcoming the arrival of a great leader. Even President Megawati Sukarnoputri didn't get such a reception when she came here to campaign for the April legislative elections."

At his first stop, in a sports field at the Sario district in the afternoon, the 54-year-old retired general was mobbed by an enthusiastic crowd, many of whom tried to shake hands with him as he and his entourage trooped in.

The spectators, cheering "SBY, we love you", had earlier been entertained by a rock group and local artistes who fired them up with popular music. They were also wooed by the presence of several top film stars in Mr Bambang's entourage such as Roy Marten, Anna Tairas and Angelina Sondakh.

Mr Bambang made a short speech from the makeshift stage and enlivened the occasion by singing Pelangi Di Mata Mu (Shadow In Your Eye), a song made popular by local rock group Jamrud. He also obliged with a song requested by his supporters and crooned the evergreen hit by Tati Kadi, Kau Segalanya (You Are Everything).

Dressed in a white short-sleeved shirt and black trousers, the lanky, athletic presidential contender did not go into details on his vision for the country when he was at the rostrum.

He focused on the big picture -- better leadership, better government and a better life for people on the ground if he was elected. The keyword, he said, was "change". "Indonesia deserves better leadership, better government and better life for the people. So we have to make the change," he said in the district that has been the stronghold of Ms Megawati's party, the PDI-P.

Mr Bambang, who teams up with a businessman from Sulawesi, Mr Jusuf Kalla, for the July 5 presidential poll, also endeared himself to the crowd when he noted that the province of 2.4 million people had also been hit by a lack of job opportunities, corruption and the sluggish economy.

"The North Sulawesi province is rich in natural resources, with its bountiful agriculture, untapped mining areas and abundant marine products, but the province remains poor. This must change," he said.

He then made passing reference to the concerns of the predominantly Christian province over the country's future as a secular multiracial and multi-religious society in the midst of calls for the implementation of the syariah law.

He told the gathering that he stood for pluralism in the largely Muslim country. "I pledge to maintain the highest level of religious tolerance and will not practise discrimination along religious and ethnic lines," he said.

His words were music to the ears of a local community leader, retired general E. E. Mangindaan, who had earlier put up banners underscoring the brotherhood of the multi-religious community in the province, which in the past has been hit by sectarian violence.

Mr Bambang vowed to uphold the state ideology of Pancasila and promised to protect the Constitution from amendment. He stressed this point again at his next stop -- the nearby University of Sam Ratulangi, where he held a dialogue with students and academics. "The character of the Indonesian nation, that hinges on pluralism, must be preserved at all costs," he said.

Undergraduate Hardi Lintong told The Straits Times he was pleased by Mr Bambang's commitment to pluralism in Indonesia. "It's important that a leader like him, who may one day assume the highest office in the land, make clear his stand on the issue," he said.

Before the day was up, Mr Bambang had a goodwill meeting with local community and religious leaders and some of the city's youngsters, who appeared to have warmed to him.

Mr Bambang told The Straits Times: "I got the impression that the people of Manado welcomed my visit warmly. I hope this is real support for me. I also hope that this can be translated into votes on July 5."

Corruption/collusion/nepotism

Indonesian tanker deal greases old wheels

Asia Times - June 19, 2004

Gary LaMoshi, Denpasar -- Entering the home stretch of Indonesia's first direct presidential election on July 5, there are only a couple of sure bets. One is that all the candidates promise to fight corruption. You may find that hard to believe since the candidates are or recently were in leading positions to address this problem and neglected to act.

The fate of a tanker order from state oil company Pertamina will help set the betting line on whether the next presidential administration will take a different attitude toward corruption. Don't bet on any candidates racing to seize the opportunity to take the lead on this issue.

The tanker case illustrates the pervasiveness and persistence of KKN -- korupsi, kolusi, nepotisme -- in Indonesian business, particularly in the areas where it intersects directly with government. The chronology indicates how quickly the window for seriously combating corruption opened and how fast it can slam shut. The required marathon effort to reduce corruption seems to have been cut to a dash that's already been run.

Perky Pertamina

Pertamina has occupied a special place among Indonesia's state companies. Founded in 1968 just after Suharto's election to the presidency from oil companies formerly controlled by the military, Pertamina quickly became a cash cow for the connected. The monopoly ran up foreign borrowing of US$10 billion by the mid-1970s, much of it for projects that had no connection to the energy business, then prompted the New Order's first economic crisis when it tried to renege on some of that debt. While the methods and tactics changed over the years, Petramina produced steady gushers of graft.

In 2000, president Abdurrahman Wahid appointed an outsider, Baihaki Hakim, from petroleum rival Caltex Indonesia, as Pertamina's new top executive with a mandate to clean up the company. The appointment followed a special audit of Pertamina's books that turned up startling abuses.

Auditors counted losses of more than $6 billion in a period of just two years. That's more than a $250 million per month, $8.2 million a day, including Saturdays, Sundays and holidays. One leading driver of abuse was Pertamina's sweetheart contracts to transport oil. Pertamina paid about one-third above market to charter tankers, and a small circle of local operators comprised winning bidders. Those grateful shipping magnates could share the wealth with the Pertamina executives greasing the skids for them.

Hakim acted to remove the distortions and limit the drain on company -- in this case, public -- cash. He opened bidding to foreign shippers and applied greater oversight to the process. Hakim also persuaded the company's board to beef up Pertamina's own transport capabilities. Cutting down on tanker leasing would be the surest way to cut down on corruption.

In 2002, Pertamina signed a $130 million contract to buy two new tankers in the Very Large Crude Carrier (VLCC) class from South Korea's Hyundai Heavy Industries. Each tanker measures 330 meters long -- it could fit the Eiffel Tower and a 747 or two in its hold -- with a capacity for 2 million barrels of oil. The first tanker is due to be delivered within weeks. The question now is whom to deliver it to.

Outsider out

While Hyundai was building the tankers, the old guard was rebuilding its influence at Pertamina. Like many other New Order interests, it found renewed sympathy when Megawati Sukarnoputri replaced Wahid as president.

Megawati's regime backed a management overhaul at Pertamina last September. Hakim was ousted as president in favor of Pertamina lifer Ariffi Nawawi, and Megawati loyalists took seats on the firm's oversight boards. One of their top priorities -- while Indonesia was sliding from net oil exporter to importer -- was scuttling the tanker deal. That would bring back the good old days of exorbitant profits for all.

Pertamina's new managers don't say that, of course. Nawawi argues that owning two VLCC tankers is a luxury that Pertamina cannot afford. He also claims leasing will save money and increase flexibility for the state company. Even assuming Pertamina's assertion that it could negotiate charter contracts like a normal business instead of charity for the wealthy, outside experts dispute those savings estimates and other claimed benefits. With the impending end of its monopoly, many industry analysts assert that owning tankers could give Pertamina advantages on the home front to help it weather the transition.

Frontline report

Pertamina has reportedly reached an agreement to sell the tankers to oil-transport specialists Frontline Ltd for $184 million. (Pertamina has declined to confirm the agreement.) In the event of a sale, given the lack of VLCCs available at the moment, there's a strong chance Pertamina could lease back one of the tankers. The apparent premium in the price reflects that current supply gap -- it takes about two years from order to delivery for a VLCC tanker -- but it's not much after factoring in Pertamina's financing costs, as well the commission to investment bank Goldman Sachs for brokering the sale. (Nice to see how globalization lets Wall Street get a piece of Indonesian graft.)

In connection with the deal, 15 key legislators from the energy and mining committee of the House of Representatives went on a junket to Hyundai's shipyard in Ulsan, South Korea, and to the Goldman Sachs conference room in Hong Kong. They came away persuaded to support the sale. However, House Speaker Akbar Tanjung, who knows a thing or two about corruption cases himself, has passed the decision to President Megawati, in the midst of campaigning for re-election.

After her party's lousy showing in the April legislative election with 49% fewer votes than in 1999, Megawati's campaign has taken to waving the reformasi banner once again. She's pledging to stamp out corruption, even promising to put Suharto on trial.

The Pertamina tanker deal would be a good place to start her war on corruption, if she is serious. Explanations from Nawawi about the advantages of selling aren't fooling anyone. Throughout the economy, the voters know what's going on. Foreign investors know -- they cut their new investments in Indonesia by 41% in the first five months of 2004. It's time for politicians to show they're not getting fooled, or taking the public for fools, either.

It's a good bet that Megawati's government won't announce a decision before July 6, three days ahead of the first tanker's scheduled delivery date and one day after balloting in the presidential election. It's an even better bet that players with big bankrolls will know the answer in time to place their wagers before election day.

KPK begins prosecution of first case

Jakarta Post - June 18, 2004

Muninggar Sri Saraswati, Jakarta -- The Corruption Eradication Commission (KPK) announced on Thursday it had began the prosecution of an corruption case worth over Rp 10 billion, the first since its establishment six months ago.

"We have named as a suspect, Harun Letlet, a finance division head of the directorate general for marine transportation of the Ministry of Communications," said KPK deputy chairman Tumpak Hatorangan Panggabean.

According to Panggabean, Harun was involved in the mark up of the price of a piece of land the Ministry of Communications bought to develop a seaport in Tual, Maluku, resulting in state losses worth over Rp 10 billion (US$1.10 million).

"We have questioned many witnesses and reviewed documents involving the case," he said. Panggabean, however, did not reveal when the trial would begin and where. Despite the accusation, Harus has yet to be detained. He also remains at his post although the law on the KPK stipulates public officials should be suspended from their jobs once the commission declared them suspects in corruption cases.

The case is set to be a test case for KPK in the yet-to-be established ad hoc corruption court, which is expected to commence later this year. The commission is currently investigating several corruption cases, including the alleged mark up of the purchase of a Russian Mi-2 helicopter by the Aceh administration.

In the meantime, the KPK is planing to investigate a bribery case involving a former foreign consultant employed by Monsanto Co., one of the world's leading developers of genetically modified seeds. The consultant allegedly bribed an unidentified Indonesian official to have Monsanto's business in the country approved.

On Thursday, Monsanto lawyers acknowledged the summons of the KPK in connection with the alleged US$50,000 bribe. "Both parties share the opinion that the bribery case involving the company and a state official must be solved, regardless of whom is involved. They also promise to cooperate with us in investigating the case," Erry Riyana Hardjapamekas said. Monsanto has promised to cooperate in the KPK's investigation of the case after a similar case in the US is settled.

The case started when the US-based agrochemical company disclosed in November 2002 that an internal audit and review by its management had uncovered compliance irregularities in Indonesia. The US Department of Justice and the Securities and Exchange Commission decided in March to widen the investigation on whether a consultant hired by Monsanto had made a payment to an public official. Under the US Foreign Corrupt Practices Act, which prohibits bribing of foreign officials, a company can face a maximum fine of US$2 million per violation.

Monsanto introduced biotech cotton in the country in 2001 but closed down its sales operations in 2003 amid complaints over yields and pricing. Now its business is confined to herbicide and conventional corn seed sales.

Dubbed a "super agency", many observers hope the KPK will be able to reduce the level of corruption in the country, which is regarded as one of the highest in the world.

More graft revealed in legislative councils

Jakarta Post - June 18, 2004

Jakarta Post, Jakarta -- The reverberations created by last month's conviction of almost all of North Sumatra's councillors in a collective graft trial are now being felt in other local jurisdictions across Indonesia, with a number of similar corruption cases currently under investigation.

The Central Java Prosecutor's Office has sent second summonses to several officials and members of the provincial legislative council requiring them to report for questioning on Thursday in connection with the misuse of budget funds.

"Should they fail to appear again, it would mean that they are treating the law with disdain. The people will reach their own judgments," a spokesman for the office, Parda Nawawi Arief, said on Wednesday in Semarang. He did not specify the amount of money involved in the alleged graft scandal.

Among those summoned as witnesses were the council secretary Didiek Samadikun, the chairman of the council's housekeeping committee, Asrofi, and Asrofi's secretary, Wahono Ilyas. They had pledged to show up at the prosecutor's office on Thursday.

Separately, local anticorruption activist Boyamin said the prosecutor's office should name the councillors as suspects should they fail to comply with the latest summonses. Another antigraft activist, Jawade Hafidz, made a similar call. "If they [the councillors] are not guilty, why should they try to avoid the legal process," he said.

In the West Java capital of Bandung, a non-governmental organization (NGO) has alleged corruption involving Rp 7.95 billion (US$883,333) on the part of members of the city's legislative council. The case was officially filed with the local prosecutor's office on Monday, the Bandung Institute of Governance Studies (BIGS) said on Wednesday.

BIGS director Dedi Heryadi said he had first revealed the case to the media 1.5 years ago, but there had been no response from the prosecutorial authorities.

The malfeasance allegedly involves funds allotted to the council out of Bandung's budgets for 2001 and 2002, he said, citing the results of an investigation conducted by his organization.

In a response to the report, Bandung's chief prosecutor, Yusma Kusumah, said his office was considering launching an investigation. However, he said, the prosecution would abide by the presumption of innocence in handling the case.

In East Kalimantan, the prosecutor's office is probing a number of suspected graft cases involving the provincial council, including the misuse of around Rp 5.4 billion in local budget funds.

East Kalimantan Prosecutor's Office spokesman Sugeng Purnomo said in Samarinda that a number of councillors from East Kutai would soon be questioned as witnesses in the case.

He said his office was examining documents signed by council speaker Soekardi Jarwo Putro on May 18, 2004, authorizing the making of payments to each of the councillors. Also, prosecutors in East Kutai regency, East Kalimantan, said they were probing a suspected corruption scam worth Rp 46.6 billion involving the regency's 2001-2002 budgets and the regental legislative council.

The council's speaker, Abdal Nanang from the Indonesian Democratic Party of Struggle (PDI-P), has been named a suspect in the case, while council secretary Darly Yusuf is currently standing trial on charges arising out of the same case.

East Kutai chief prosecutor Rasidi said that three councillors -- Bahrid Buseng, Alex Rohmanu and Sukarni Joyohave -- had been questioned so far as witnesses in Nanang's case.

Last month, the Padang District Court jailed 43 out of 55 West Sumatra councilors for collective graft. All the councillors in Cirebon, West Java, have also been charged with corruption.

Similar corruption scandals are being unearther or finally acted upon in many other provinces and regencies around the country.

Local legislative councils hit by graft scams:

1. The Padang regental council
2. The West Sumatra provincial council
3. The Payakumbuh regental council
4. The Cirebon municipal council
5. The Garut regental council
6. The Ciamis regental council
7. The Bandarlampung municipal council
8. The Palembang provincial council
9. The Singkawang regental council
10. The Pontianak regental council
11. The Banda Aceh regental council
12. The Central Java provincial council
13. The East Kalimantan provincial council
14. The East Kutai regental council

More than two billion dollars lost to corruption in two years

Agence France Presse - June 18, 2004

Indonesia has lost 22 trillion rupiah (2.3 billion dollars) in two years because of corruption, an official said.

The amount was based on 1,198 corruption cases investigated by prosecutors between January 2002 and April 2004, said the spokesman for the attorney general's office, Kemas Yahya Rahman.

Of the total loss, only 1.2 billion rupiah (127,660 dollars) has so far been recovered, he said. "The amount recovered is small because many cases are still in the appeal process," Rahman told AFP. He said more money would be recovered once the cases had been settled but some of it may be gone forever.

The Berlin-based Transparency International watchdog group has rated Indonesia as one of the world's most graft-prone countries.

Authorities have in recent months launched a flurry of investigations into graft across Indonesia. Officials deny the move is intended to improve President Megawati Sukarnoputri's image before next month's presidential election. Many electors complain she has done little to combat rampant corruption.

Last month more than three-quarters of the provincial legislators in West Sumatra were ordered jailed for between two years and 27 months after being convicted of misusing a total of 5.9 billion rupiah. They are free pending appeal.

The attorney general's office said the number of legislators implicated in corruption cases nationwide had increased from 270 in May to 300 this month.

Local governments 'should be probed for corruption'

Jakarta Post - June 14, 2004

Moch. N. Kurniawan, Jakarta -- A political expert and an anticorruption activist said Saturday that heads of local government administrations may also be involved in the recent spate of corruption cases committed by local legislative members.

They called for an investigation into the governors and regents as well as mayors in the areas where the legislators had been charged or sentenced in corruption cases.

"It is very possible that corruption committed by legislature members at the local level also involved governors or regents or mayors," political analyst Andi Mallarangeng told the Jakarta Post on Saturday.

He said that if those in the administration were not investigated, state prosecutors were actually not being serious in combating corruption at the local level.

Over 250 legislators across the country have been charged with corruption, with dozens found guilty.

In West Sumatra, three leaders of the provincial legislative council -- Arwan Kasri, Hasmerti Oktini, Masfar Rasyid -- were found guilty of corruption involving Rp 6.48 billion of the taxpayers' money. They were sentenced to 27 months in prison and fined Rp 100 million each.

Prosecutors and police investigators are currently looking into corruption cases against local legislators Banda Aceh in troubled province Aceh, Garut in West Java, Pontianak in West Kalimantan and Bandar Lampung in Lampung.

Andi went on to say that corruption committed by legislators indicated that political parties that got enough votes in 1999 had chosen the wrong people to be representatives. "Those legislators had no intention of working for the people's interests, only their own," he said.

He added that poor supervision at the local level, particularly during the autonomy era, had further increased the possibility for those in power to commit corruption. "All the auditing agencies are toothless," he said.

Anung Karyadi of Transparency International (TI) Indonesia concurred with Andi. "The widespread corruption is the result of a broader problem in the legislature and ineffective supervision," he said. "But legislators can't commit corruption alone, they must have partners in the regional administrations to do so."

Andi expected that new legislators in the 2004-2009 period would seriously improve their image in combating corruption. Supervision from the central government and local administration must be made effective to help save the people's funds from being stolen, he said. A commitment from the president to eradicate corruption should also be implemented in a real way, he added.

Meanwhile, Anung said the death sentence against major corrupters might be the best thing for this country as the shock therapy might teach people that it is wrong to steal. "Most of the action we've taken against corruption just does not work and it frustrates people, we should try the death penalty against corrupters," he said.

Human rights/law

Megawati issues decree on national human rights committee

Jakarta Post - June 19, 2004

Fabiola Desy Unidjaja, Jakarta -- President Megawati Soekarnoputri has issued a decree establishing a national committee that will coordinate human rights activity across the country.

Chaired by the minister of justice and human rights, the committee will be responsible directly to the president, with members comprising representatives of both the government and national human rights institutions.

According to the decree signed on May 11, 2004, the committee's tasks will include establishing and strengthening institutions enforcing the National Action Plan on Human Rights (RANHAM), preparing the ratification of international human rights instruments, disseminating human rights information and monitoring, evaluating and submitting human rights reports to the president.

To facilitate its work, the committee will need to set up a national secretariat under the Ministry of Justice and Human Rights.

The minister of justice and human rights, as chairman of the national committee, along with governors across the country, will form the provincial RANHAM committees, which will be accountable to governors and the national committee.

Members of provincial committees will comprise government representatives, experts and public figures.

Similar committees will also be set up at regental/municipal levels across the country.

The decree was signed to replace the 1998 to 2003 National Action Plan on Human Rights, which ended in December last year. The new presidential decree is valid for the next five years until 2009.

Local authorities are required to allocate funds to finance these new offices, while the Ministry of Justice and Human Rights will finance the national secretariat.

The national committee will be required to submit reports to the president at least once a year, while offices at provincial or regental/municipal levels will have to submit reports to governors or regents/mayors annually.

Member of the government-sanctioned National Commission on Human Rights (Komnas HAM) Zoemrotin K. Susilo welcomed the committee, saying that the two agencies might be able to work together in educating and disseminating human rights information to the public.

"However, only Komnas HAM has the authority to investigate or mediate in instances where gross violations of human rights are alleged to have occurred," Zoemrotin told the Post.

She said the committee was set up to improve the country's human rights record in the future.

"But we shall work in separate fields; only in a few areas such as education and information dissemination could we work together," Zoemrotin added.

When asked whether the national committee would be effective in improving the country's track record, she said, "This is something that we should determine after the committees have been established across the country".

She said clear parameters had to be established to appraise the performance of the committee in order to assess the effectiveness of the offices.

AG's office receives Sutiyoso's dossier after two-day delay

Jakarta Post - June 16, 2004

Abdul Khalik and Suherdjoko, Jakarta/Semarang -- The Jakarta Prosecutor's Office received on Tuesday the last two dossiers of the July 27 case from National Police headquarters, including that of Governor Sutiyoso.

The case revolves around the violent takeover of the headquarters of the then Indonesian Democratic Party (PDI) on July 27 1996, then led by the incumbent President Megawati Soekarnoputri. The case was recently reopened, raising suspicions of underlying political motives in connection with the ongoing presidential election campaign.

Attorney General's Office spokesman Kemas Yahya Rahman said that the prosecutor's office had received two dossiers which included Sutiyoso's name and 11 other suspects. Sutiyoso was Jakarta military commander at the time of the incident.

"We received the dossiers at 1 p.m. today. So, all six dossiers of the 27 July case, which contain a total of 23 suspects, are in the hands of our prosecutors," said Kemas.

Earlier in the day, National Police deputy chief of detectives Insp. Gen. Dadang Garnida had said that his officers had sent on Monday all the six dossiers to the prosecutor's office. "We sent all of them last night at 9:30 p.m. because we don't want to delay them even for a day," said Dadang.

Kemas said that the first dossier contained 11 names including Let. Gen. (ret) Sutiyoso, the former Jakarta Police chief the late Insp. Gen. Hamaminata, former Jakarta Military intelligence assistant chief Col. Haryanto, and chairman of Pancasila Youth Yorris Raweray. The second dossier contained four names, namely Indonesian Democratic Party (PDI) secretary-general Butu Hutapea, former PDI deputy treasurer Alex Widya Siregar, and former PDI deputy secretary-general R. Sihombing.

The prosecutor's office has 14 days to decide whether to bring the dossiers to the court or return them back to the police.

National Police general crimes division director Brig. Gen. Aryanto Sutadi said that as the Jakarta Military commander Sutiyoso was declared a suspect not because he failed to maintain security and order in his area but because several witnesses saw him conducting "criminal acts".

"We are not going to charge him for failing to restore order because that is not a criminal act. We have gathered several witnesses willing to testify that he violated the Criminal Code," said Aryanto without specifying further.

The attack on the PDI headquarters claimed five lives, injured 149 people, and left 23 others missing, according to official findings.

Earlier, some analysts suggested that the timing of the investigation was intended to discredit presidential candidate Susilo Bambang Yudhoyono of the Democratic Party. He was the chief of staff of the city's military command when the incident occurred. He had been questioned as witness twice in 2000 and 2001.

National Police chief Gen. Da'i Bachtiar said in Semarang on Tuesday that there was no instruction from the President to reopen the case. "The case has been investigated by a joint team from the military, the Attorney General's Office and the police. So, the police can't decide on their own. It is the authority of the team to continue investigating the case," said Da'i. He added that the team would decide whether it was necessary to summon Susilo.

Reconciliation & justice

Imparsial urges Megawati to pursue July 27 investigation

Tempo Interactive - June 15, 2004 Angelus Tito, Jakarta -- The Indonesia Human Rights Monitor (Imparsial) is urging President Megawati Sukarnoputri to cancel her order to law enforcers to postpone the legal investigation into the July 27 case(1). This was related to journalists by Impartial's program director Rachland Nashidik at a press conference held at the Imparsial offices on Jalan Diponegoro in Central Jakarta on Tuesday June 15.

According to Imparsial, the victims of the July 27 affair have waited too long for a legal investigation into this case so the president cannot and does not have the right to use her political authority to delay the legal process. Nashidik also said that it is natural that questions have arisen about the motives behind the reinvestigation of the July 27 case(2). "We don't care what the motive is, Megawati's error is clear, she did not push forward the legal investigation into the July 27 case immediately after she become president", said Nashidik.

Nashidik also explained that the statement by Imparsial on the July 27 case was only issued for the sake of seeking justice for the victims and does not take into account the question of supporting a particular presidential candidate. "It could be that the reaction will be that it is taken as support for Megawati, who in essence is [using the case] to keep another presidential candidate from winning, bearing in mind that SBY has been mentioned as one of the suspects [in the case]", said Nashidik.

Notes:

1. Following weeks of protests at the Indonesian Democratic Party (PDI) headquarters in Central Jakarta by pro-Megawati PDI supporters after the Suharto regime engineered Megawati's removal as the party's democratically elected chairperson, on July 27, 1966, paid thugs backed by the military attacked and destroyed the PDI offices resulting in the death of as many as 50 people. Popular outrage at the attack sparked several days of mass rioting and violent clashes with police. Many had hoped that with Megawati's ascendancy to the presidency those responsible would be held accountable however Megawati and other leading party figures have publicly distanced themselves (refusing to attend annual commemorations) from the issue. Those who were eventually brought to trial in late 2003 have all been low ranking soldiers or civilians and have either been acquitted for lack of evidence or given light sentences. None of those believed to have organised or led the attack have been brought to trial.

2. Democratic party presidential candidate former coordinating minister of politics and security Susilo Bambang Yudhoyono (SBY) was chief of staff of the Jakarta military command at the time of the July 27 attack. Although no evidence has been found of his direct involvement, many argue that his position meant that he must have known beforehand about the plan. Witnesses have also placed him near the scene where he was allegedly seen with Jakarta governor Sutiyoso who was then the military chief of political affairs and has been directly implicated in the incident. Since coming to office the Megawati government has made no serious attempt to solve the case and therefore recent initiatives to reopen the investigation in the mist of the presidential election campaign have been seen as an attempt to sabotage the campaign of presidential favorite SBY.

[Translated by James Balowski.]

PRD: If involved in July 27 case, SBY must be disqualified

Detik.com - June 14, 2004

Astrid Felicia Lim, Jakarta -- The People's Democratic Party (PRD) is pushing for the investigation into the July 27 case(1) to be continued including the investigation of the generals [who have been implicated in the affair]. If former general Susilo Bambang Yudhoyono (SBY) is found to be involved then he must be disqualified as a presidential candidate.

The call was issued by the chairperson of the PRD, Yusuf Lakaseng, at a press conference at the PRD offices in Tebet, South Jakarta, on Monday July 14. In a statement, the PRD demanded that the government of President Megawati Sukarnoputri thoroughly investigate the July 27 case to the point where it actually fingers the parties who were involved. The PRD also demanded that other cases of human rights violations be fully investigated.

"We charge that [recent moves to reinvestigate the July 27 case] are a political commodity if they only have the aim of discrediting SBY or other political figures and will not go as far as bring them to court. [This will also be the case] if it not accompanied with investigations into other cases of human rights violations, such as the Semanggi tragedy(2), the May tragedy(3) and others", said Lakaseng.

According to Lakaseng, the desire by Megawati's to instead postpone the investigation into the July 27 case indicates that she has no commitment to resolve the affair. "We call for an investigation to be conducted into all of the figures who were involved at the time of the July 27 [incident], that is [Jakarta governor] Sutiyoso, [former military chief of political affairs] Syarwan Hamid, [former armed forces chief] Feisal Tanjung, [former East Java military commander] Imam Utomo and even [former President] Suharto as the supreme commander [at the time]", said Lakaseng. "If it is in fact proven that SBY was involved, its consequence will be [his] disqualification from being nominated as president", he added.

Also present at the press conference was labour activist Dita Indah Sari who also giving support to other victims of July 27 to give testimonies in the case. "I have invited the victims who are not involved in supporting a specific presidential candidate to go to the Attorney General and the National Human Rights Commission and call for all of the civilian political elite and the military who were involved to be tried", she explained.

Lakaseng also took the opportunity to deny that the PRD is involved in the 2004 Presidential Election Fraud Monitoring Committee which was launched on June 9. "The PRD's name was included there only because of a unilateral decision by the committee. [We are not involved] because we view this committee as being extremely contradictory, because it includes blocking support for SBY. We are not [involved] there", he explained. (asy)

Notes:

1. Following weeks of protests at the Indonesian Democratic Party (PDI) headquarters in Central Jakarta by pro-Megawati PDI supporters after the Suharto regime engineered Megawati's removal as the party's democratically elected chairperson, on July 27, 1966, paid thugs backed by the military attacked and destroyed the PDI offices resulting in the death of as many as 50 people. Popular outrage at the attack sparked several days of mass rioting and violent clashes with police. Many had hoped that with Megawati's ascendancy to the presidency those responsible would be held accountable however Megawati and other leading party figures have publicly distanced themselves (refusing to attend annual commemorations) from the issue. Those who were eventually brought to trial in late 2003 have all been low ranking soldiers or civilians and have either been acquitted for lack of evidence or given light sentences. None of those believed to have organised or led the attack have been brought to trial.

2. The Semanggi I and II cases involved the fatal shooting of dozens of student demonstrators in Jakarta in November 1998 and September 1999 respectively.

3. On May 12, 1998, security personnel shot into a crowd of student protesters from the Trisakti University near their campus in West Jakarta, killing four students and injuring several. This proved to be the spark which set-off three days of mass demonstrations and rioting in Jakarta which eventually lead to the overthrow of Suharto.

[Translated by James Balowski.]

PRD: Investigate the July 27 case

Tempo Interactive - June 14, 2004

Suryani Ika Sari, Jakartar -- The People's Democratic Party (PRD) is calling for the government of President Megawati Sukarnoputri to conduct a thorough investigation into the July 27 case(1) and the human rights violations which were committed during the period of the New Order regime of former President Suharto. This call was issued by PRD chairperson Yusuf Lakaseng at a press conference which was held at the PRD offices in Tebet, South Jakarta, on Monday June 14.

Also present at the press conference were victims of the July 27 incident such as Dita Indah Sari and former PRD secretary general Petrus Haryanto(2). Lakaseng said that the perpetrators of the July 27 case, such as former armed forces chief of political affairs Syarwan Hamid, former armed forces chief Feisal Tanjung, Jakarta governor Sutiyoso, then Jakarta military chief of staff Susilo Bambang Yudhoyono, film director Imam Tantowi and Suharto must be thoroughly investigated. "We will never stop demanding that the government thoroughly investigate the July 27 incident", said Lakaseng.

Lakaseng also said that if the case is not fully resolved respect for human rights in Indonesia will never be achieved. He believes that continuing delays in resolving the July 27 case by Megawati indicate that she is inconsistent in wanting to resolve the case. "It looks like Megawati doesn't want to resolve this case", said Lakaseng.

Notes:

1. Following weeks of protests at the Indonesian Democratic Party (PDI) headquarters in Central Jakarta by pro-Megawati PDI supporters after the Suharto regime engineered Megawati's removal as the party's democratically elected chairperson, on July 27, 1966, paid thugs backed by the military attacked and destroyed the PDI offices resulting in the death of as many as 50 people. Popular outrage at the attack sparked several days of mass rioting and violent clashes with police. Many had hoped that with Megawati's ascendancy to the presidency those responsible would be held accountable however Megawati and other leading party figures have publicly distanced themselves (refusing to attend annual commemorations) from the issue. Those who were eventually brought to trial in late 2003 have all been low ranking soldiers or civilians and have either been acquitted for lack of evidence or given light sentences. None of those believed to have organised or led the attack have been brought to trial.

2. Popular outrage at the July 27 attack sparked several days of mass rioting and violent clashes with police which was blamed on the PRD, who's members were hunted down and arrested as the masterminds behind the riots. In 1997, Dita Indah Sari and Petrus Haryanto, along with 11 other members of the PRD, were sentenced to long jail terms for subversion.

[Translated by James Balowski.]

Focus on Jakarta

Indonesia's first monorail project begins

Deutsche Presse Agentur - June 14, 2004

Jakarta -- Jakarta city authorities on Monday started the construction of a 600-million-dollar monorail project aimed at easing the Indonesian capital's gridlock traffic and chronic pollution.

In a groundbreaking ceremony, President Megawati Soekarnoputri touched a siren, marking the beginning of the lucrative 27- kilometre project that will be comprise of a "green line" and a "blue line".

"Today, the groundbreaking of the monorail project is launched. God willing, if all planning and schedules run well, by 2006 the monorail will be in operation," Megawati said at the groundbreaking ceremony.

The elevated rail project, which includes two tracks, will serve Jakarta's metro and suburban areas, with a planned expansion into the greater Jakarta area in the future.

The green line will circle 14.3 kilometres around the city centre's "Golden Triangle" area, while the 12.7-kilometre blue line will circle from Kampung Melayu in East Jakarta to Roxy in West Jakarta, officials said.

The Jakarta's city government signed on May 14 an agreement with PT. Indonesia Transit Central (ITC), which groups Indonesian investors and the Omnico Consortium, a foreign-backed consortium, to build a 600-million-dollar project.

Under the authorization agreement, the Indonesian and foreign investors will be granted the license to build and operate the Jakarta monorail for a period of 40 years.

Officials estimated that the operators would break even within nine years of operation.

Jakarta Governor Sutijoso said previously that the monorail would be able to carry 10,000 to 30,000 passengers per hour, with a cost up to between Rp3,500 (38 cents) to Rp7,500 (83 cents) per person, depending on the distance traveled.

News & issues

Intelligence wars: Behind the Lance Collins affair

Radio National - May 30, 2004

Peter Cronau: A month ago, the Australian intelligence community took a direct hit. The detonation, a series of leaks to the media about a powerful pro-Indonesia bias in Australia's military intelligence and foreign affairs establishment. The missile was one of our top military intelligence officers.

Dear Prime Minister, ... I am writing to inform you about the failure of institutional controls over the Australian intelligence system.

Peter Cronau: This letter to the Prime Minister from Lieutenant Colonel Lance Collins was one of the leaked documents. The letter went on to say: It is clear that the Australian intelligence community is unable to identify reality in a timely manner, or convey its significance to Government. ... I strongly urge you, Prime Minister, to appoint an impartial, open and wide-ranging Royal Commission into Intelligence and the influences upon it.

Peter Cronau: The letter sets out a pattern of distortions that Lance Collins said has helped protect the military dictatorship in Indonesia for decades. And it itemises mercenary activity, coups, and terrorist bombings in our region that might have been prevented.

But Colonel Collins' prime allegation is that an undue influence of what's generally called the pro-Jakarta lobby has endangered Australia's national security. The letter continues: My concerns centred around three issues: the diligence with which some Australian officials attended to Indonesian foreign policy aims during the East Timor crisis, the conduct of the Mervyn Jenkins case, and the performance of the strategic intelligence system during the East Timor crisis.

Peter Cronau: This is Background Briefing on ABC Radio National. On this week's program, "Intelligence Wars", we will enter the shadowy corridors of power, knowledge, analysis and influence. I'm Peter Cronau.

Lieutenant Colonel Lance Collins himself has so far refused to speak to the media, however several senior military officers have backed his allegation of bias within the Defence Intelligence Organisation, the DIO. Naval Captain Martin Toohey.

Martin Toohey: The DIO has been politicised. That is a very sad situation. And indeed, a dangerous situation; if we have another East Timor, where the intelligence is of such a poor standard again, lives will be at risk.

Peter Cronau: At the heart of the controversy is the delicate balance between the lives of ordinary people, powerless people, that may be sacrificed in the name of a bigger game: national security and the national interest.

As early as 1998 Lance Collins had tried to alert to the Australian government about a likely violent reaction by Indonesia's military to independence moves in East Timor. He was ignored, and thousands died as a result; a nation was virtually burnt to the ground; our alliance with the US was compromised, and ironically, our "special relationship" with Indonesia bit the dust.

But Lance Collins has also been strongly criticised. It's been said his current allegations are not accurate, that he is naove, that there is no such thing as a Jakarta lobby.

Lecturer in International Relations at Deakin University, Scott Burchill, says the criticisms show that the revelations hit a nerve.

Scott Burchill: The reaction of people to the Lieutenant Colonel Collins revelations in the last month suggest that the Jakarta lobby and people who subscribe to their views, are still kicking and screaming in various quarters, not just the government bureaucracies but in the universities and in think-tanks and in consultancies. So it would seem that the broad view that had been in evidence I guess since Soeharto's rise to power in the mid- '60s continues today.

Peter Cronau: The view that was in evidence in the time of Soeharto was that Indonesia was a country we must at all costs be friends with. Australia's government needed Soeharto to stop the spread of communism; under Soeharto's iron-fisted stability, Indonesia became an important marketplace.

In forming a pragmatic alliance with Indonesia, we turned a blind eye to its military suppression of civilian opposition.

We were told there is an "Asian Way" of handling human rights; that the exploitation of the resources of the Timorese, the Acehnese, the West Papuans, is better for them in the long run. We were told that the military might be best to handle democracy in Indonesia.

It's a balance all countries must make between a deeply held view of universal human rights and the pragmatic assurances of decision makers, to decide what is to be the national interest. It's a hard-fought balance. Lance Collins and others say Australia did not get it right.

After first raising a formal complaint with the Defence Minister in 2000, Colonel Collins says he was subjected to rumour, harassment, threats and comments about his psychological state. It's a situation that others have had to face, too. Ten years ago a group of six intelligence officers had raised concerns about what was going on inside the intelligence establishment. One was former ASIS officer, Warren Reed.

Warren Reed: A blowtorch is put on the individual. They're ostracised, they're in many ways cast out from the community. It's made known to them that not only are their career prospects seriously jeopardised but they'll be cut out of meetings, there'll be deliberate chit-chat behind their backs, innuendo, slurs, a lot of muck-raking, disinformation, and the ultimate hope quite actively entertained on the part of some people, particularly with Mervyn Jenkins, to push the person to the point where they'll either suicide or have a nervous or psychological breakdown.

Peter Cronau: Warren Reed is a former senior intelligence officer and former head of the Indonesia desk with ASIS, the Australian Secret Intelligence Service. He has a special interest in the Lance Collins case: he too was a dissenter. In the early '90s he and five fellow officers raised a raft of complaints about mismanagement, mistreatment and cover-ups inside ASIS. The responses led Reed and his fellow agents to take their case to the public.

Warren Reed: Well there were half a dozen of us who had similar cases. Almost all of the cases caused by intransigence on the part of Foreign Affairs, not that ASIS people are perfect, but problems over cover and whatnot. And we had all gone through the IGIS process, that's the Inspector General for Intelligence and Security, and all of our cases were effectively whitewashed.

Peter Cronau: More than two years after Lance Collins first raised his complaints, there was a response from the Inspector- General of Intelligence and Security, concluding that Collins' allegations "do not stand up to objective scrutiny".

But by then, Collins had made a further complaint about how he was being treated. An independent military lawyer was appointed to investigate, but Collins was refused a copy of the completed report. Little wonder -- it was dynamite. And it was this report that leaked to The Bulletin magazine a month ago.

Captain Martin Toohey interviewed the key players, reviewed all the documents, and earlier reports. Here is a reading from Toohey's report: I find as a fact that a pro-Jakarta lobby exists in DIO [the Defence Intelligence Organisation] which distorts intelligence estimates to the extent those estimates are heavily driven by government policy which overlooks (or attributes the blame to other factions) atrocities and terrorist activities committed by TNI [the Indonesian military]. In other words, DIO reports what the government wants to hear.

Peter Cronau: The Defence Department declared Toohey's report "fatally flawed" and commissioned another report. But it too supported Collins. They then sought yet another; it concluded Toohey's finding about the Jakarta lobby was outside his terms of reference.

The preparation of so many reports shows that there has been an attempt to find one that would dump on Collins and bolster the government.

Immediately after the leaks last month, a Defence Security Authority investigation was launched. This is no perfunctory inquiry; Background Briefing has learned the investigators have questioned some ten Defence personnel, both in Australia and overseas, and that one officer was questioned, interrogated, for six hours straight. The investigation is still under way.

Colonel Collins had written to the Prime Minister in March, and had received a polite, but final reply from the PM. Here is a reading of part of that letter: Dear Lieutenant-Colonel Collins, ... On the basis of the advice I have received, I cannot share your overall judgement about the performance of the Australian intelligence system. ... I should emphasise that I continue to have the fullest confidence in the integrity and competence of Australia's intelligence community. I believe Australia's intelligence community performs admirably under great pressures, and does a fine job in providing balanced and independent assessments to government.

Peter Cronau: The Prime Minister wrote that he would not call a Royal Commission, and he reminded Lance Collins that there is already an inquiry under way into Australian intelligence agencies. This Inquiry was set up in March after a Senate Committee found errors in the intelligence system leading up to the Iraq War.

However, that Inquiry is already dogged by allegations it will not be impartial. It's chaired by Phillip Flood, who has close ties to the government, and has headed an intelligence agency, was Ambassador to Indonesia, and now heads the Foreign Affairs- funded Australia-Indonesia Institute. It will be hard for Flood to be seen as independent. His report will be submitted, in secret, to the Prime Minister by the end of June.

Central to the allegations raised by Lieutenant-Colonel Collins, is the existence of what's been called the Jakarta Lobby. Some deny it exists, others have no doubt of its importance and influence in setting government policy. At Deakin University, Scott Burchill.

Scott Burchill: The Jakarta Lobby is an informal group of like- minded people who regard Indonesia as being a special case, requiring a different standard of behaviour to the way other countries should be expected to behave. So it's made up of people in the university sector, in journalism, in the bureaucracy, in the Foreign Affairs bureaucracy and the Aid bureaucracy, think- tanks, and consultancies. People who have a view that Indonesia should not be judged by the same standard that is applied to other countries around the world.

Peter Cronau: Scott Burchill has seen DFAT from the inside as a junior officer, and has since made the study of the Jakarta Lobby a focus of his research at Deakin University. He sees the origins of the lobby going back to Cold War fears of communism.

Scott Burchill: The view of the Jakarta Lobby was that Indonesia was in a perilous state, that it was subject to centrifugal forces which if not contained by a strong man sitting in Jakarta, would result in the Balkanisation of Indonesia, its break-up into many parts. And so after the concerns of the Sukarno period and particularly Sukarno's relationship to the Indonesian Communist party, Soeharto's rise to power was seen to be a very positive development in the West.

Peter Cronau: The Australian government in the mid-'60s certainly saw the massacres of more than half a million Indonesians suspected of being communists, as a positive development. Prime Minister Harold Holt at the time visited America, and is quoted as saying: "With 500,000 to one-million communist sympathisers knocked off, I think it is safe to assume a reorientation has taken place." Soeharto's dictatorship was to last 33 years, and overall, Australian policymakers were pleased.

Scott Burchill: Soeharto not only wiped out the Indonesian communists, but he led the country with a very large iron fist, wiping out dissent and ensuring that the country stayed intact, using the Army to repress dissidents and secessionist movements throughout the archipelago, in particular in the eastern and westernmost provinces. This was appreciated, and the West generally and Canberra in particular, believed that Soeharto's longevity was an important national interest for Australia. And if he was to be subject to criticism because of human rights violations that he was responsible for, that may result in his removal from power, and that's something that Canberra did not want to occur.

Peter Cronau: Weighing up the balance of the national interest -- stability or democracy? Unity versus disintegration? The "Asian Way" or universal human rights -- is at the heart of the questioning of the Australia-Indonesia relationships.

Richard Woolcott was at the epicentre of this debate during his time as Australia's man in Jakarta in the '70s. He was there when Indonesia invaded East Timor. No longer a diplomat, he now lives in active retirement in Canberra, but maintains a strong interest in Indonesia.

Richard Woolcott: It must always be a country of the greatest importance to Australia, simply because of its size and proximity and the importance to Australia of insecurity and other terms of having a stable Indonesia.

Peter Cronau: Richard Woolcott has also been Head of the Foreign Affairs Department and Chair of the Australia-Indonesia Institute, but he denies the existence of a "lobby".

Richard Woolcott: Let me say that I find the idea of a pro- Indonesia lobby in the former Department of Foreign Affairs, of which I was supposedly one of the leaders, offensive, if it means supporting that country, Indonesia's, interests. I mean having represented Australia for 40 years on all continents and at the United Nations, I'm not pro any country other than my own. And I think also the idea of an Indonesian lobby sort of running foreign policy, also misrepresents the role of officials, even an Ambassador.

Peter Cronau: Woolcott argues it's too simplistic to take the moral high ground in international politics.

Richard Woolcott: It is in Australia's national interest to develop as sound and co-operative a relationship as possible with major powers like China, Japan, Indonesia and of course the United States. We need to understand, not necessarily to approve, but to understand their policies, and that's only common diplomatic sense, it's not a matter of there being a lobby or there not being a lobby.

Peter Cronau: Another insider who denies the existence of a Jakarta Lobby, Alan Behm, was Head of the Defence Department's International Policy Division during the Timor crisis. He was responsible for the Defence Co-operation program with Indonesia, which included training of Indonesia's notorious Kopassus special forces.

Alan Behm, speaking in his home near the Australian War Memorial in Canberra, says the Jakarta Lobby criticism comes from people who don't have to make the hard decisions.

Alan Behm: I think that people who are, shall I say, in rather subordinate positions in the broad bureaucracy, may interpret decisions that are taken either by government or things that are said or written by former senior public servants, former diplomats, as representing too soft a line, with respect to Indonesia, and their personal preference might be for a much tougher line. But at the end of the day governments have got to weigh up toughness against effectiveness.

Peter Cronau: No-one denies that there has to be a sensitively crafted diplomacy, and a making of friends with countries in the region. What's in question is whether it is ever in the long term national interest to support brutal or corrupt governments, and whether we should be turning our backs on the human rights of people in those countries. The Jakarta Lobby is sensitive to having this raised, says Scott Burchill.

Scott Burchill: My observation of the media recently, in particular the response to Lieutenant-Colonel Collins' revelations and concerns, is that the only people who raise doubts about the existence of the Jakarta Lobby are people who I would regard as comprising it. Every other observer, in particular independent observers, have no doubt that there's a long-standing group of academics, journalists, bureaucrats and others who have informally lobbied for maintaining a good relationship with Jakarta at all costs over the last 40-odd years, regardless of the crimes committed by the government in Jakarta, crimes which in particular in relation to East Timor, Australia bears some moral complicity for. So it's not surprising that the people who make up the Lobby deny its existence.

Peter Cronau: It's this weighing up of the national interests, the line to take, to be soft, or tough, to protest a massacre, or explain it away, that determines the state of working relationships between countries. In this way our "official" national interest is determined.

Richard Woolcott: It's very difficult to pursue a foreign policy entirely based on morality. A bilateral relationship with a country like Indonesia, it's a bit like a rope, it's made up of many strands. Now one or two of those strands relate to the issues of human rights and the treatment of peoples, but there are other strands too, and one has to try and find the best possible balance in a total relationship. The Howard government's doing that right now with China, it's downplayed certain problems with China because of the commercial opportunities there, for example, and I have no problems with that, as I've always argued that relationships, particularly with major countries of great interest to Australia, you have to try and find the best balance.

Peter Cronau: It was in 1975, when Indonesia invaded East Timor that Ambassador Woolcott wrote what is now considered the classical representation of the pro-Jakarta line. In August '75, a few months before the invasion, he sent a secret cable from the Embassy in Jakarta to his boss, the Head of Foreign Affairs in Canberra. Here's a reading of part of that cable.

Policies should be based on disengaging ourselves as far as possible from the Timor situation. We should leave events to take their course; and if and when Indonesia does intervene, act in a way which would be designed to minimise the public impact in Australia and show privately understanding to Indonesia of their problems. ... I know I am recommending a pragmatic rather than a principled stand, but that is what national interest and foreign policy is all about.

Peter Cronau: Richard Woolcott says the policy towards Indonesia was not a single issue policy, and that the cable must be seen in the context of the time.

Richard Woolcott: The situation in 1975 at the height of the Cold War, with Saigon just having fallen to the Viet Cong, it was an entirely different situation, and they seem very fanciful now, but Indonesia was seriously afraid that if an independent East Timor were to emerge at that time it might be recognised by the Soviet Union or China and actually the phrase was quite commonly used, it would become a South East Asian Cuba, by which they meant that the Russians might put missiles in there and point it at Jakarta. Now this all seems very fanciful now but at the time it was a real thought.

Peter Cronau: Richard Woolcott's cable also referred to the importance of the oil under the Timor Sea, and Scott Burchill says that cable showed a hardline self-interest by Australia.

Scott Burchill: He regarded it would be a better scenario if Jakarta took control of East Timor because of the oil and gas reserves that were known to be under the Timor Sea. So rather than having to deal with an independent East Timor government, which may be a leftist government, and rather than having to deal with Portugal, it was much better that we deal with Jakarta on those issues.

Peter Cronau: Much later, the Labor government under Paul Keating and Foreign Minister Gareth Evans, continued the old pragmatic relationship with Indonesia.

Jose Ramos Horta, now East Timor's Foreign Minister, says both major political parties found the same balance.

Jose Ramos Horta: We had Labor, we had Liberal, Conservative; they had almost exactly the same position. Maybe one wanted to be more pleasing, placating Indonesia than the other. Remember Paul Keating, he then called Soeharto his "father"; remember Tim Fischer, a good man, a very decent man, he said Soeharto was "the man of the century". So Labor and Liberals were trying to outdo each other in the competition to get Soeharto's affection, Soeharto's attention. So that was far more important to them than little East Timor.

Peter Cronau: In 1995, just months before he lost office, Keating signed a mystifying and secret Security Agreement with Indonesia. It was so secret, Prime Minister Keating said at the time, "If there had been a more public process, there probably wouldn't have been a treaty".

The agreement would have Indonesia and Australia help each other in times of trouble and security problems. Critics feared this would mean co-operation in the repression of Indonesia's separatist movements. The Howard government ratified the Agreement, not long after the Coalition gained power in 1996.

But ahead lay a tectonic shift in the Asian landscape. In 1997, the Asian financial crisis destabilised economies across the entire region. In Jakarta, President Soeharto's dictatorship was losing its grip on power, and within a year, he was forced aside by a renewed democracy movement, and replaced by President Habibie.

During these tumultuous months in Indonesia, Lieutenant-Colonel Lance Collins was at the Headquarters Australian Theatre, the planning centre for all Australian military operations in harbourside Potts Point, in Sydney. Collins had seen the storm clouds gathering over East Timor's future. An authority on Indonesian military strategy, Collins had served on the Indonesia Desk of the DIO.

Colonel Collins and his colleagues were asked by his Commander to write a report on possible implications for the Defence Force. Not just any report, but what's called an Intelligence Estimate. It goes way beyond normal intelligence analysis, by examining the whole picture of historical information and recent events to predict what intentions and plans an adversary may be making.

His report was finished in July 1998 and it had three main findings: Firstly, that East Timor would continue to push for independence. Secondly, the Indonesian military would violently oppose any moves to independence. And finally, Lance Collins said Australia may be called upon to provide a UN peacekeeping force.

Such a scenario had huge implications for defence planning. If Colonel Collins was right, the Australian and Indonesian military might soon be in open conflict.

His Intelligence Estimate is still classified Top Secret, but Colonel Collins outlined the Estimate and the reasoning behind it, in evidence he gave to Captain Martin Toohey, which later leaked to The Bulletin magazine. Here's a reading from Collins' statement.

In the middle months of '98, I with two other people, and I was the team leader, completed an Estimate on the situation in East Timor which was then becoming destabilised in the wake of the trouble Indonesia had with its currency, financial regulations, the fall of Soeharto, and so on. ... The Estimate pointed to the situation in East Timor becoming very unstable in the future, and a peacekeeping force being deployed, and in some aspects of the Estimate, it pointed to the role of the Jakarta Lobby in policy formulation and so on. ...

Under the direction of the Commander, Australian Theatre, that was sent to DIO for their comment. ... I got a phone call from [an analyst in the South East Asia section of DIO] who pointed out that there were still many people of the "Woolcott School" around the system who would be unhappy with the Estimate.

Peter Cronau: Collins received sharp criticism for having written the Estimate from both the DIO and the Defence Department. But unhappy or not, Defence had now received an early warning.

At the Australian Defence College in Canberra. Professor Carl Thayer.

Carl Thayer: Colonel Collins really has to be congratulated for firming up an assessment that early. Because again, by my recollection, it would have been towards '99 that very firm reports or intelligence estimates or briefings that one was aware of, were indicating that there was a growing linkage between the Indonesian military and forming up militia groups, and focus on who was in the chain of command, how high up did this go.

Peter Cronau: Lance Collins' predictions, as we now know, turned out to be accurate. Still, to this day, there are senior insiders who deny that Lance Collins had had anything much of importance to say. Hugh White.

Hugh White: I'm unpersuaded that there was in fact an Intelligence Estimate that made those judgements. It's worth bearing in mind that there was very little evidence around that the issue of independence was at all on the cards. And such an assessment at that stage would have proved very hypothetical.

Peter Cronau: Hugh White, Head of the Australian Strategic Policy Institute, which is funded by the Defence Department.

The International Policy Division of the Defence Department was very critical of the Collins Estimate. Alan Behm was the Division Head. He says he has never seen the document, but he does remember that his staff thought such matters should be left to the policy-makers.

Alan Behm: Certainly one of the Assistant Secretaries in my Division, communicated with Headquarters Australian Theatre at the time, suggesting that they might be better off keeping their Intelligence assessments within the boundaries of the sort of operational needs and operational demands of the Australian Defence Force, and leave the business of policy to the government.

Peter Cronau: After Keating lost government, Labor's new Shadow Foreign Minister, Laurie Brereton, took on the party's 30-year policy of support for Jakarta to push through a new policy of support for the Timorese. The Coalition government was faced with how to counter Labor's new policy and regain the initiative. In December 1998, Prime Minister John Howard wrote to President Habibie.

Here's a reading of part of that letter My dear President, ... I want to emphasise that Australia's support for Indonesia's sovereignty is unchanged. It has been a long-standing Australian position that the interests of Australia, Indonesia and East Timor are best served by East Timor remaining part of Indonesia. ... It might be worth considering a means of addressing the East Timorese desire for an act of self- determination in a manner that avoids an early and final decision on the future status of the province. ... [This] would allow time to convince the East Timorese of the benefits of autonomy within the Indonesian republic.

Peter Cronau: The letter was a bold attempt to help Indonesia retain its hold on East Timor. It was an attempt to head off moves for an immediate vote on self-determination, to give Indonesia breathing space from the mounting international pressure.

Here at a taped Senate hearing in 1999, DFAT Deputy Secretary John Dauth, as an aside, confirms the letter was designed as an effort to strengthen Indonesia's hold on East Timor.

John Dauth: But you see, Senator, a very important part of our thinking at the time that the Prime Minister despatched his letter was that Indonesia really had only one last chance to keep East Timor as part of Indonesia.

Peter Cronau: By early 1999, the predictions by Colonel Collins were playing out. In January, the Habibe government surprisingly announced that the East Timorese could in effect have a referendum on independence. But the Indonesian military, the TNI, began to violently undermine steps for the referendum.

There were shootings and massacres, and Indonesia continued to fend off calls for UN peacekeepers in East Timor. And a steady trickle of leaked secret documents from the Defence Intelligence Organisation, with details of the TNI backing for the violent militias, flowed to journalists.

Beyond even the predictions of Colonel Collins, the Indonesian military had a very carefully laid out plan on how to retain their hold on East Timor. This outline of their plan, revealed here by Background Briefing, was put together following a review of much of the Indonesian military documents available through open-source channels. It was prepared by the Australian Intelligence Corps' former principal analyst for East Timor, Major Clinton Fernandes, now completing a PhD in History at Deakin University. He declined to comment on the report, but Background Briefing has extracted the following from his contribution to a university discussion list.

The Indonesian military terror campaign was carefully calibrated in intent, timing and location. For all its visceral, punitive aspects, the aim was to reverse the result of the ballot. It would have to be discredited as rigged, by suggesting that a majority of Timorese were voting with their feet. The Indonesian military needed to remove all foreigners in order to execute its plan without the impediment of outside attention. Therefore, for all its sensationalism and violent imagery, the execution of the terror campaign was carefully controlled.

The military campaign would work sequentially as follows: 1. Use the militia proxies to confine and remove foreign observers. 2. With foreigners gone, attack the local population and use logistics assets to move them across the border. 3. Provoke a desperate retaliation from Falantil [the Timorese fighters], thereby drawing it into a conventional war. 4. Announce that [the Indonesian military] the TNI, was forced to intervene between the "factions" and then, freed from restraints, attack and destroy Falantil in conventional warfare. 5. Create new demographic facts on the ground, ensuring that the results of the ballot were irreversibly overturned.

Peter Cronau: The arrival, three weeks after the August independence ballot, of the UN Interfet peacekeepers, ended that plan. And that arrival completed the third phase predicted by Colonel Collins.

Collins was enlisted as part of the Interfet peacekeeping force to East Timor, as Commander Major General Peter Cosgrove's top intelligence officer. It was to be the largest Australian-led overseas operation since World War II, and it was a dangerous one.

[Shooting sounds]

Peter Cronau: By December, shooting attacks by Indonesian troops on Interfet forces had become so intense that 100 troop reinforcements were helicoptered to the border.

By December 20, General Cosgrove had written to Indonesian military commanders expressing concern at the deteriorating security situation in the border area.

[Shooting sounds]

Soldier: Watch that bloke, get a feed on him, do not fire on him unless he points at you!

Peter Cronau: That same day, an extraordinary, and still unexplained event happened. Someone pulled the plug on the Australians' top secret intelligence database called TOPIC. For more than 24 hours, Australian troops on the ground and thousands of UN staff, Federal Police, aid workers and Timorese civilians were put at increased lethal risk.

Background Briefing has spoken with an army Intelligence officer who was with Interfet in Dili, and was working on the Intelligence database. He says Interfet had tactical communication systems to try to work around the blackout, but says it was just luck that lives were not lost. He spoke to us on condition we do not identify him; here is a part of his statement.

The loss was critical. While it was not real-time information, it was giving Intelligence information historically, including the previous day. It could have proved lethal. It was a major loss of capability. It was a major system. It was down more than 24 hours.

Peter Cronau: The officer says suggestions made recently that the loss of access was due to a technical problem, are simply not right.

I am 100 percent certain there were no technical issues that prevented the service from opening. I was initially called in to check the system, which I did, and assessed that it was not a technical problem. It could not be fixed. I reported this to Lieutenant-Colonel Collins, and then contacted the Project Office in Canberra, who also checked. The Project Office tested the system and found it was not a technical fault. They concluded the cause was "access withdrawn".

Peter Cronau: This officer says he has not been asked by anyone in authority tell what happened, but says he is prepared to do so if called before a properly instituted Inquiry.

This new evidence backs claims by Colonel Collins that DIO caused an intentional blackout of the critical Intelligence database which put Australian lives in increased danger. It challenges the recent statement on the incident by the Defence Force Chief, Peter Cosgrove, and the Defence Department head, Ric Smith. Here is a reading of part of their statement.

There was never any cut to the overall Intelligence flow to forces in East Timor, nor were the lives of Australian personnel endangered.

Peter Cronau: The Background Briefing website from Wednesday will contain links to this document and more.

Back in Australia, the leaks to the media continued. The government was infuriated and embarrassed that its statements playing down the TNI link to the violence were proving wrong.

Defence Security and the Federal Police launched an investigation; Australia's largest ever leaks investigation. It lasted more than 12 months, and involved officers from several agencies. There were break-ins, clandestine investigators, and bugging. There were rough interrogations, and raids on people's homes.

In September 2000, the homes of two people were raided: Phillip Dorling, Labor's Foreign Affairs adviser, and Clinton Fernandes, the Army's Timor analyst. A number of other people were named on the warrants. Lieutenant-Colonel Collins was named, and so was the ABC.

Another name included on the warrant was Bruce Haigh, who had been the Indonesia Desk officer in the Department of Foreign Affairs in the mid-'80s. He has never received an explanation.

Bruce Haigh: I can't explain it, except that I was writing a lot of stuff and saying a lot of stuff about what was happening in East Timor, and I actually said that I believed that the militia had been formed and were being supported by the TNI, by the military. And presumably they thought I got that information from a leak in Intelligence, whereas in fact it was just a deduction that I made, knowing how the TNI works. I think it was an attempt to discredit me because I'd been very, highly critical of the government, and the gutlessness that the government showed towards the need, as I saw it, to intervene in East Timor with a peacekeeping force before the vote.

Peter Cronau: Labor's Foreign Affairs advisor, Phillip Dorling, is also puzzled by the raid on his home. He thinks it resulted from his Minister's critical use of the information in the leaked documents. Phillip Dorling.

Philip Dorling: What stood out in this particular case was the scale of the investigation, the very large resources devoted to it, the commitment of the government and investigators to continue investigating over a period of many, many months. And then their decision to engage in a series of highly public but unsuccessful searches. Their purpose I think, in the end, was to attempt to intimidate people.

Peter Cronau: With an Inquiry into the Intelligence Agencies presently under way and talk of a Royal Commission, some say that Lance Collins' role is vastly over-played and that the Defence Intelligence Organisation was really doing a good job.

But there is one person who has reviewed every piece of DIO reporting of the time: that's the Inspector General of Intelligence and Security, Bill Blick. Paradoxically, while he concluded that Colonel Collins' allegations about DIO did not stand up to objective scrutiny, in his report on Collins he did conclude there were examples of DIO assessments "adopting a pro- Jakarta line".

The presence of such assessments during 1999 adopting the pro- Jakarta line, meant there were a variety of views available, some believing TNI assurances in handling security and others with evidence against this. This would have left open the opportunity for a reader to cherry-pick the information they want.

This was also a testing time with our US ally. It's been Australia's job since 1997 to collect, and most importantly, analyse Intelligence on indonesia and South East Asia, and to share it with our allies. It's called in the business, "load sharing".

At the ANU's Strategic Studies Centre, Des Ball says the East Timor crisis was the first serious test of that arrangement.

Des Ball: This was probably the first major test case of just how good our particular intelligence capacity was, in an area which the Americans had left to us but which was now becoming of interest in Washington itself. And there were problems. I think the key problem which arose was a concern on America's part as events began to unfold in East Timor in 1999 about whether Australia was providing intelligence of sufficient detail and veracity to enable Washington to make its own policy conclusions.

Peter Cronau: In the Washington Embassy, Merv Jenkins was the DIO's liaison man, and he was in the hot-seat. While the Australian government was trying to limit what he shared with the Americans, Jenkins was being told by DIO to secretly pass on information to the Americans. Here's an email sent to Jenkins.

Secret: For Australian Eyes Only.

Timor issues: I have been asked ... to pass on to you that issues are becoming extremely sensitive as there are Foreign policy implications. It is imperative that extra care is taken with the passing of material to the US and Canada.

Peter Cronau: But Embassy security, run by the Department of Foreign Affairs, caught Merv Jenkins passing information, and launched an urgent investigation. Jenkins was in an impossible position, and DIO cut him adrift. He was interrogated. Shaken and depressed, he committed suicide. Exactly why his situation became so untenable has not yet been revealed.

Today in her Canberra home, Merv Jenkins' widow, Sandra Jenkins, says she feels Merv's struggle with DIO has been taken up by Lance Collins.

Sandra Jenkins: He's been victimised just like Merv was. And I just admire his courage; he's doing exactly what I'm sure Merv would have been able to do had he been given the opportunity. Lance doing what he's doing, I feel like Merv is not alone, as though Merv has got someone who's able to speak up for him, where he couldn't do it five years ago.

Peter Cronau: One of the immediate effects of tensions between the US and Australia was the death of Merv Jenkins. But there were other impacts.

Background Briefing has learned that at least some on the US side believed serious damage to the Alliance's trust relationship had occurred. Phillip Dorling details for the first time an approach he had from a nervous American.

Philip Dorling: A senior officer of the US Embassy indeed approached myself as Mr Brereton's advisor in circumstances of some considerable concern about the security of our conversation, and advised us that the US government was aware that Australia had been withholding or otherwise delaying the transmission of Intelligence relating to Indonesia and East Timor, and that certainly the US Intelligence community was very concerned about that.

Peter Cronau: It was the treatment of Merv Jenkins that had particularly concerned the Americans.

Philip Dorling: He did indeed make explicit reference to the Jenkins matter and used that to make the point, to say that the Americans had seen some things that they were no longer being provided with and that that had reinforced their concerns about what the Australian government was no longer sharing with them on East Timor and Indonesia.

Peter Cronau: The American wanted to expose that the fallout was being covered up by both governments.

Philip Dorling: He wished to make it clear to us that the public statements to the contrary, the public statements by the Prime Minister, Mr Howard, and indeed by the US State Department in conjunction with Mr Howard, that those statements were not accurate, and that the US Intelligence community did not at all agree with the statement that there was no problem in co- operation between Australia and the United States.

Peter Cronau: And the American revealed to Dorling why they thought the Australians were holding back on Timor.

Philip Dorling: They had a clear view that the Australian government placed a very great weight on its relations with Jakarta and with the Indonesian military, and that that was a very significant element in the Australian government's policy and that was influencing both the government's position on peacekeeping and they were also particularly concerned that it was in turn influencing the exchange of information through Intelligence channels.

Peter Cronau: The impact on the US Intelligence system of Australia's withholding of Intelligence on Indonesia was significant. Professor Carl Thayer was at the US Pacific Command in Hawaii for three years from 1999. He reveals to Background Briefing that the US was forced to beef up their own Intelligence collection capacity because they were concerned about the quality of information they were getting from Australia.

At the Australian Defence College, Carl Thayer.

Carl Thayer: It showed up US deficiencies. It indicated that another country can withhold information under its own AUSTEO, Australian Eyes Only classification, to the extent that a Liaison Officer in Washington had to be given authority to release information that Australia was withholding, but doing it on an unofficial basis so that information was not just passing it, because Australia thought it was timely and necessary.

Peter Cronau: It was differing national interests regarding Indonesia that had led to the problem between the US and Australia, says Professor Thayer.

Carl Thayer: The United States has taken a very anti, negative line about the Indonesian military in a way that Australia hasn't, and I think that the realisation that the two have differing national interests and that may colour the Intelligence collection effort, not necessarily the product which has been alleged, but when you have interests you set Intelligence collection to inform those interests. Now that is, you move into periods of instability in Indonesia, I think all countries would realise no-one has enough assets to fully understand what's going on, and the United States took steps to try to fill some of the gaps.

Peter Cronau: Professor Thayer explains what those steps were.

Carl Thayer: Well the increasing the analytic capacity in Pacific Command to begin with. But I would have imagined as you move into the CIA areas of operation, the need for more human Intelligence contacts. And as I say, with differing national interests, the United States would ask itself different questions and then go, "How do we get the information?" and task its Intelligence agencies to gather it.

Peter Cronau: Australia's decision to help protect the Indonesian regime, even from the scrutiny of our traditional main ally, the US, was a new expression of our national interest. But following September 11, there is a renewed closeness between the US and Australia, and surprisingly also with the Indonesian security forces.

Again, we are faced with the balance between human rights and siding with a tainted security force, the old struggle to determine the national interest.

And there may yet be other costs for Australia. Former ASIS officer, Warren Reed, thinks the pro-Jakarta Lobby is alive and flourishing, though not always seen. He claims that Indonesia has recruited some Australians as spies.

Warren Reed: You have people who have been the subject of Indonesian penetration of our system, and are either, to put the mildest spin on it, agents of influence, or simply old-fashioned traitors. So the Indonesian Lobby in its various forms, I think incorporates what you could say is the good and the bad.

Peter Cronau: As former Head of the Indonesia Desk at the Australian Secret Intelligence Service, Warren Reed saw much that concerned him.

Warren Reed: The Indonesians I noticed then were very, very good at exploiting interests, particularly personal interests, of some senior ASIS people. And they were doing this very effectively. I think some of the penetration has occurred directly through the Intelligence system itself.

Peter Cronau: The present debate has been sparked by the apparent Intelligence failures and has been pushed along by the Lance Collins case. It has been about the need to reform our Intelligence agencies and to isolate them from the political demands and pressures placed upon them.

There is also perhaps a need to look a bit deeper, to examine the nature of our community values, and how they are developed in our national policies, and expressed in our national interest. Des Ball says the Intelligence system needs radical overhaul.

Des Ball: We don't have a National Security Council in Australia, we don't have any high level co-ordinating machinery to ensure that other national interests which we have, and indeed hold dearly, principles of democracy of individual freedom, of human rights, that they are correctly composed with the power elements of our national interests.

Peter Cronau: And former Intelligence officer Warren Reed says a return to basic principles is required.

Warren Reed: Truth and accountability in the whole Intelligence process, and a detachment from political influence is absolutely crucial. You lose truth and accountability in Intelligence and you can't have a national interest.

There will often be a point in policy making, decision making with Indonesia for example, where to serve the national interest we may have to weigh up principle and politics. But at the end of the day, to serve a national interest properly we have to know what we stand for as a culture and a civilisation, and what we're willing to live with.

Peter Cronau: Background Briefing's Co-ordinating Producer is Linda McGinness; Technical Operator, Angus Kingston; Research and website, Paul Bolger; Executive Producer, Kirsten Garrett. I'm Peter Cronau. You're listening to ABC Radio National.

Domestic violence up: Activists

Jakarta Post - June 14, 2004

A. Junaidi, Jakarta -- The National Commission on Violence Against Women (Komnas Perempuan) said on Saturday that the victimization of women was on the rise in recent years.

Komnas Perempuan's deputy chairwoman Myra Diarsi said her commission had recorded over 6,000 cases of violence nationwide in 2003, up from some 5,000 in the previous year.

Myra said an estimated 46 percent of the cases were categorized as domestic violence. "The number of domestic violence cases involving women was based on police records, as well as data from hospitals and women's crisis centers across the country," Myra said in a discussion held by Komnas Perempuan and sponsored by the Body Shop Indonesia.

She said Komnas Perempuan would seek more support from the public from all walks of life to pressure President Megawati Soekarnoputri to ratify the bill on domestic violence. Myra said the support was needed from society in the middle and upper class levels as domestic violence was also experienced by them.

"It should be the concern of all of us. Public pressure is more important as we don't have much financial support to run campaigns that support the passage of the bill," she said.

Suzy Hutomo, head of the Body Shop here, said it would support the campaign on violence against women, especially, as almost all of its customers came from the higher socio-economic levels.

"We will use our chain across the country to support the campaign. We also support the domestic violence bill," Suzy said in the discussion.

She said Komnas Perempuan, in cooperation with her company, Her World women's magazine and Female radio station, would conduct fund-raising event called the Sunday Fund Run in the Semanggi area, Central Jakarta, next week.

Besides jogging from the Semanggi area to the Hotel Indonesia traffic circle, Suzy said the activity would raise funds for victims of violence. "We also want to collect signatures to support a petition for the endorsement of the domestic violence bill," she said.

Two weeks ago, hundreds of women staged "A Thousand Umbrella Peace Protest" in front of the State Palace in Central Jakarta, to demand Megawati to ratify the bill on domestic violence, which they have been fighting for since 1997.

Environment

Research group finds further damage to Leuser

Jakarta Post - June 14, 2004

Apriadi Gunawan, Medan -- An independent forestry research group in Medan shared on Saturday its findings that the development of a road connecting Karo and Langkat regencies was environmentally damaging to Mount Leuser National Park.

The Social Forestry Research Unit (SFRU) has found signs of illegal logging along the 37 kilometer road, said SFRU chairman Hery Joenaedial Azmy.

The road connects Kuta Rayat village, Karo regency, and Telagah village, Langkat regency, and a section of it cuts through the national park.

In a recent visit to the area, the group -- whose members consist of agriculture students from North Sumatra University -- saw logs with a diameter of 40 to 50 centimeters strewn along both shoulders of the Karo-Langkat road.

Newly cleared paddy fields also lined the road, which they suspected were a result of illegal logging and would be used for rotating rice cultivation. Squatters typically poach trees and use a slash-and-burn method to clear the deforested land, and sell both the illegal logs and illegally cleared land.

"We suspect that illegal logging and rotating cultivation have been going on for the past few years since the government built the road, as indicated by the tell-tale signs of illegal logging and rotating cultivation within the national park," said Hery.

He said the road was developed in 1986 by the government under the ABRI Masuk Desa Program -- a community service program of the Indonesian Armed Forces (ABRI, now the Indonesian Military, or TNI).

Hery regretted the development of the road, as it had encouraged illegal logging in the area. "The government has to shut down the road. If it doesn't, illegal logging in the national park will continue at a rapid pace and in the end, ruin the park." Bobby Nopandry of SFRU research and data said it was a universal phenomenon that new roads would ensue in new real estate development.

"It is certain that the same thing will happen on the Karo- Langkat road ... and expedite environmental damage in the national park," he said.

A local forestry official claimed to have no knowledge of the road. "If the road has, in fact, been developed, it must be stopped immediately, because it can cause environmental damage to the national park," said Prie Supriyadi, head of the North Sumatra Forestry Office. He further said the road was illegal, as the Ministry of Forestry had not approved its development.

82 percent of firms do not treat waste

Jakarta Post - June 14, 2004

Multa Fidrus, Tangerang -- Some 82 percent of 1,061 of industrial firms in Tangerang municipality do not have waste treatment facilities as required by law. Therefore, most of them do not process their waste effectively. Some even just dump their untreated waste directly into the river.

"To date, only 187 firms have waste treatment facilities but apparently most of the facilities do not work properly," said the municipal environmental agency head Muhamad Akip on Saturday.

He added that 874 other firms -- comprising of small, medium and large firms -- do not have waste treatment facility.

"The firms always say in their semester reports submitted to the agency that providing their own waste treatment facility is very costly. We have warned them to follow the regulation," he said.

According to Akip, the municipality plans to conduct a study to build integrated waste treatment facilities to collectively process the industrial waste of several firms. However, the project would require a huge amount of funding and a large plot of land.

"As of now, we have yet to find the right site for the construction of integrated waste treatment facilities. The facilities will be built based on the type of waste produced by industrial firms," he said.

Akip said the results of tests at the Office of the State Minister of the Environment laboratory revealed the oxygen content in water samples taken from the Cisadane River, in the border between Tangerang regency and municipality, has been declining. The minister's office will continue monitoring the water quality from the river upstream in Bogor through Tangerang to find out which firms dump the most waste into the river.

Tangerang Mayor Wahidin Halim announced on June 10 nine firms allegedly responsible for polluting the municipality. They are PT Argo Pantes, PT Pelita Cengkareng, PT Indometal, PT Surya Renggo, PT Lengtat Tangerang Leather, PT Tonikitex, Harlipan Batik, Sejahtera Metal and Vonicc Latyexindo. The mayor also asked Tangerang Police to investigate and prosecute them.

Non-governmental organization Forum (Forum NGO) chairman Muslih Amin said the absence of waste treatment facilities was the fault of the environmental agency.

"The agency has the authority to take stern measures against alleged polluters who do not build waste treatment facilities," he told The Jakarta Post.

He urged the administration to involve the community in conservation efforts. He also asked the agency to establish an independent institution to resolve environmental disputes out of the court.

The existence of such an institution is important to ensure that disputes over environmental pollution between industrial firms and the administration or the society are solved effectively, he added.

Health & education

Indonesia's dengue death toll at 669: Minister

Agence France Presse - June 16, 2004

Jakarta -- Some 669 people have died in a widespread dengue fever outbreak in Indonesia in the first five months of this year and the disease still remains a dangerous threat, Health Minister Achmad Suyudi said Wednesday.

As of May 31, some 59,321 people had been infected with the mosquito-borne disease and 669 of them had died, he said.

Dengue fever is an annual rainy season hazard for Indonesians. But the number of infections so far this year is an 18 percent rise over the whole of last year, Suyudi said.

"Dengue fever still poses a dangerous threat to society but we have prepared public health service teams," he told reporters.

Samples taken from infected patients showed that most of them contracted the most dangerous type of the disease, Suyudi said.

He said the government is trying to bring the death rate below one percent but the public should continue to keep surroundings free from pools of water, where mosquitoes breed.

The ministry also warned that a malaria outbreak had hit three provinces, Riau and Aceh in Sumatra island and West Java, and killed 11 people.

Military ties

Australia resumes links with Kopassus

Melbourne Age - June 18, 2004

Brendan Nicholson -- Australia has resumed co-operation with the Indonesian special forces group Kopassus to help fight regional terrorism, Defence Minister Robert Hill revealed yesterday.

Senator Hill said members of Kopassus's Unit 81 had been represented at a conference of special forces and counter- terrorism experts from South-East Asia in NSW this week. Last year Australian Defence Force chief Peter Cosgrove said co- operation between the Indonesian and Australian special forces would resume but only in areas like hostage rescue.

Kopassus was notorious for its alleged role in the abduction and torture of dissidents during Soeharto's 32-year rule of Indonesia which ended in 1998.

Senator Hill said if there was a terrorist attack in Indonesia, Australia's special forces would need to know who was responding and how capable they were. He said Islamic terrorists throughout South-East Asia were still capable of sophisticated attacks despite the arrests of many of their leaders. The region was a breeding ground for extremists and no country could fight them by itself.

Senator Hill said regional terror groups had adopted al-Qaeda's anti-West ideology and methods and shared some resources. "A goal of these terrorists is to erode and exhaust us," he said. The only way to prevent attacks was close co-operation.

Resumption of military ties with Kopassus closer

Melbourne Age - June 17, 2004

A resumption of counter-terrorism training between Australia and Indonesia's controversial Kopassus forces appears closer, with Indonesia's top counter-terrorism officer attending a conference in Australia this week.

Defence Minister Robert Hill, who addressed the conference on Thursday, extolled the benefits of cooperation between regional counter-terrorism forces.

The conference, held at Bowral on the NSW southern highlands, attracted representatives from 14 regional countries, among them the commander of Indonesia's Detachment 81. That is the specialist counter-terrorism force within the controversial Kopassus special forces.

Australia halted all cooperation with Kopassus in 1998 following allegations of human rights abuses in Aceh, East Timor and West Papua. But since the September 11, 2001, terror attacks in the US, the government has moved to a resumption of joint training.

Outside the conference, Senator Hill confirmed that Kopassus was represented at the gathering. Also in attendance was the commander of Australia's special forces Major General Duncan Lewis.

Asked if Australia was closer to resuming counter-terrorism training with Kopassus, Senator Hill said it was in Australia's security interests.

"One can imagine a terrorist scenario in Indonesia where that unit is called upon to respond," he said. "In those circumstances we think it is very important that our special forces know who is responding and know their capabilities and be able to offer assistance -- it might be in intelligence -- to assist them in their task."

Senator Hill said the conference was the first time special forces representatives from 14 countries, including Australia, the US, China, Vietnam, Malaysia and the Philippines, gathered to discuss how they were dealing with terrorism in their countries.

"The only way to effectively combat today's terrorism is through cooperation, and the forces that are at the sharp end of defeating this threat have not necessarily had a close relationship in the past," he said.

"But it is very important that they know each other and have confidence in each other so that if an event does occur that requires cooperative response, they won't be starting from scratch."

Addressing the gathering, Senator Hill warned that the region was becoming a breeding ground of Islamic extremism. He said the regional extremists, the most prominent of which was Jemaah Islamiah, had adopted al-Qaeda's anti-western ideology and methods.

Business & investment

Indonesia: The promise of LNG

Asia Times - June 18, 2004

Bill Guerin, Jakarta -- Just as the liquefied-natural-gas industry in the Asia-Pacific region is poised for takeoff, Indonesia, the world's biggest LNG producer, needs to import up to 30 cargoes of the fuel from rival suppliers to meet contractual obligations with Taiwan, South Korea and Japan, which consumes nearly three-fourths of the region's total LNG supply.

Last year, Indonesia had to buy spot cargoes from Qatar and Nigeria to supply the same customers. These costly imports were also needed to feed Aceh's major fertilizer producers, which had to reduce their operations because of declining output from fields that feed the massive Arun LNG plant in Aceh.

The plant is 55% owned by state oil and gas company Pertamina. Energy giant ExxonMobil supplies some 1.5 billion standard cubic feet per day of gas to Arun from its onshore and offshore fields and has a 30% stake in the plant. ExxonMobil has said it will still meet its commitment to ship 110 cargoes of LNG, or about 6.4 million tons, this year.

Combined production from Arun and the Bontang LNG plant in Kalimantan is about 34 million tons annually, though only 26.5 million tons was exported last year -- still a sizable chunk of the total 77.5 million tons of LNG, worth nearly US$20 billion, sold to Asian markets. Of this total, 55.8 million tons was taken by Japan.

Consumption in the Asia-Pacific is expected almost to double by 2015. As LNG seems set for much higher demand and a future as a commercially and environmentally attractive mass-market fuel, Pertamina has been given back its concession and authority to explore for, produce, process and market LNG.

After the introduction of Law No 22/2001 on oil and gas, aimed at liberalization, the authority reverted to the government, which then created a new entity, the Oil and Gas Upstream Regulatory Agency (BP Migas). The 2001 law allowed private investors to engage in the distribution of oil and gas, which for decades had been the monopoly of Pertamina.

BP Migas has now appointed Pertamina as the sole agent to market LNG to these traditional markets. Minister of Energy and Mineral Resources Purnomo Yusgiantoro said on Monday the decision was made in view of Pertamina's experience in the conclusion and extension of gas sales contracts.

The future of LNG looks bright The future for Indonesia's gas industry is highly promising, with worldwide consumption of gas expected to more than double by 2030, and natural gas likely to surpass coal as the world's secondary energy source.

Over the next seven decades, Indonesia may even usurp the Middle East as the world's largest gas exporter. Major gas deposits have been found in Papua and in many areas of Sulawesi. Large gas deposits have been found in Java, Bojonegoro and Seratung. South Sumatra also holds significant deposits.

But despite these significant natural-gas reserves, amounting to some 92.5 trillion cubic feet (tcf), the country at present still relies on oil to supply about half of its energy needs. Substantial but declining oil production has even seen Indonesia become a net importer of crude oil after output recently fell below a million barrels per day.

Proven oil reserves of 5 billion barrels are predicted to run out in 10 years at current production rates of 350 million barrels per year. Proven natural-gas reserves, on the other hand, will not be exhausted for 30 years at the current annual production rate.

An average of 2.8 tcf of natural gas is produced in Indonesia every day. Some 1.5 tcf is exported in the form of piped gas, LNG and liquefied petroleum gas (LPG), with the remainder used for the domestic market.

As oil production has leveled off, efforts have been made to shift toward using natural-gas resources for power generation. However, distribution and transmission of natural gas have been hampered by a lack of infrastructure. Also, as in most of Asia, the distance of many demand centers from major gas fields has limited gas supply in Indonesia.

The government has recently issued interim permits to nine companies to distribute natural gas for industrial consumers. Most of these companies operate in West Java, where the country's main industrial belts are located. Since the companies have little infrastructure, they are being allowed to use gas pipelines owned by state gas-distribution firm PT Perusahaan Gas Negara.

Once pricey, now prudent alternative

LNG has been an expensive option in the past, unable to compete with oil-based fuels in the Indonesian domestic market because of the government's subsidy policy. Now, as the government is gradually scrapping the fuel subsidy, LNG looks like a viable alternative fuel for the local market, though massive investment will be needed for receiving terminals and deliquefaction facilities.

At its destination, LNG can be converted back to natural gas and used to fuel power plants. State electricity company PLN wants to reduce its dependence on coal for power generation and has just signed a cooperation agreement with Pertamina on the construction of an LNG terminal at Cilegon in West Java. The terminal, which will process gas to operate nearby steam-fired electricity turbines, needs an investment of up to $300 million.

Pertamina has discovered huge gas reserves in Donggi in Sulawesi and also plans to build an LNG plant there, expected to come online in 2010. Officials are also considering the feasibility of developing an LNG terminal at the Marsela offshore gas discovery east of Timor in the Arafura Sea. The Marsela prospect is operated by Japanese exploration firm INPEX and has estimated gas reserves of 3 tcf.

There are currently more than 40 existing and proposed LNG plants around the world, and the massive Tangguh LNG project being developed by a consortium led by Anglo-British energy giant BP Plc, in the Bird's Head area of Papua, will be Indonesia's third plant.

The bulk of Indonesia's total LNG exports go to Japan other than some 30% to South Korea and Taiwan. However, as more offshore projects come online over the next five years and BP builds its Tangguh LNG plant, the country's traditional role of supplying these three markets will be expanded as North America takes more LNG from the Asia-Pacific.

BP and its partners, including CNOOC Ltd, China's largest offshore oil company, may invest as much as 40% in equity for the Tangguh project. It will have a capacity of 7 million tons per annum, and aside from boosting the country's LNG output, will generate revenue for Papua, one of the poorest regions in the country.

International aspirations

China may build up to nine LNG terminals in the next few years to promote the consumption of cleaner fuels, including one near Beijing by 2008, when the city hosts the Summer Olympic Games. In September 2002, China awarded an $8.5 billion LNG contract to Indonesia to supply its planned terminal in Fujian province for 25 years, beginning in 2007.

Last December BP Migas and BP Indonesia signed an agreement with US-based Sempra Energy to supply 500 million cubic feet a day of LNG from the Tangguh project. Under the agreement, 3.7 million tons of LNG will be delivered annually from Tangguh, beginning in 2007, to Sempra's proposed LNG import and re-gasification terminal near Ensenada in Baja California, Mexico. BP's partners in the Tangguh project are MI Berau BV (held by Mitsubishi Corp and INPEX Corp) with 16.30%; CNOOC with 12.50%; Nippon Oil Exploration Berau with 12.23%; BG Group with 10.73%; KG Companies (held by Japan National Oil Corp, Kanematsu Corp and Overseas Petroleum Corp) with 10%; and LNG Japan Corp (held by Nissho Iwai Corp and Sumitomo Corp ) with 1.07%.

Mitsubishi's stake in the Tangguh project has driven its application to the US Federal Energy Regulatory Commission and California's Port of Long Beach Authority for a license to build a terminal to receive Indonesian LNG in southern California. The $400 million facility could accommodate 5 million tons per annum, could meet about 10% of California's demand and could be completed by 2007.

To meet its long-term energy needs, Singapore is also planning to establish an LNG terminal to secure the supply of what is forecast to be the island's main fuel. The plant would enable Indonesia to send more gas to Singapore from other parts of the country in the form of LNG.

Singapore has been buying Indonesian natural gas delivered through underwater pipelines from Sumatra and West Natuna, but the amount of gas that can be transmitted in this way is limited. A recent disruption of this supply, which led to a blackout in the western part of Singapore, has caused concern there.

A decision on the project will be made after a feasibility study commissioned by the Ministry of Trade and Industry to determine the project's economic viability. If it goes ahead, the project is expected to cost at least S$1 billion (US$588 million) and would take five years to build.

Under new legislation enacted this year, 25% of Indonesia's oil and gas must be sold on the domestic market. If LNG is to play a major role in the development of the domestic market while earning precious foreign exchange, Jakarta needs to secure additional financing for the multibillion-dollar costs of production facilities, upstream gas fields, shipping and re- gasification plants.

The government's main dilemma will be how to balance national interests, a controversial issue to say the least after regional autonomy, with the need to lure investors into the lucrative gas sector.

The adverse social and political costs of developing natural resources in a country where the infrastructure is adequate, but governance is weak and there is precious little sanctity of contract, at least in the eyes of foreign investors, makes this an extremely tough nut to crack.

Big chains may cause job losses

Jakarta Post - June 16, 2004

Zakki P. Hakim, Jakarta -- The rapid expansion of modern retail outlets like hypermarkets and minimarkets in big cities may have forced many traditional grocery stores to close down, creating huge job losses, according to a preliminary finding of the Central Statistics Agency (BPS).

The latest 2003 National Labor Force Survey (Sakernas), published by BPS, reported that jobs in the retail sector during the year declined by 7.42 percent to 4.24 million from 4.58 million in 2002.

"Our preliminary hypothesis is that the growing number of hypermarkets and minimarkets probably contribute significantly to the declining trend," Aden Gultom of the BPS workforce sub- directorate told The Jakarta Post on Tuesday.

Aden, who had been involved in the survey, said that the BPS was now in the process of reevaluating the finding. The agency does not clearly define what it considers a traditional grocery store.

But Bambang Widianto, a director at the National Development Planning Agency (Bappenas), said that the decline in jobs in the retail sector was probably related to the overall poor business and investment climate in the country, prompting many businesses to close down and discouraging new investment.

During the past few years, modern retail outlets have been mushrooming in the country particularly in the capital city of Jakarta and its surrounding areas, taking advantage of the strong domestic consumption, which has been the main engine of economic growth.

The number of convenience stores, for example, increased to 100 in 2002 from only 45 in 2000, while the number of supermarkets including minimarkets rose to 802 from 737, according to AC Nielsen data.

Hypermarkets, which are relatively new in Indonesia have experienced the highest growth, rising to 37 in number in 2002 from 27 in 2000. But the data also suggests that the number of traditional grocery stores also increased to 1.89 million from 1.88 million in the same period.

The condition in 2003 may have changed particularly as modern retailers took more aggressive expansion steps. From 1998 until the first five months of this year, five large format stores (including hypermarkets and those that require membership) have opened around 54 outlets.

French company Carrefour has been seen as the most aggressive (and probably the most successful) in expanding its hypermarket business in the country.

Carrefour started the hypermarket business here in 1998, opening its first outlet in Kuningan, South Jakarta, selling no less than 50,000 goods varying from screwdrivers, clothes, televisions, meat and fruit to fresh-from-the-oven pastries.

Other modern retailers operating in the country include Matahari, Makro, Alfa, Hero, Clubstore, Tops, Super Indo, and Indomart. Indomart has successfully penetrated residential areas.

Industry experts have said that the mushrooming of modern retail outlets is part of the changing lifestyles in big cities as occurred in other countries.

But some critics have lambasted the government (which benefits from taxes and foreign and domestic investment figures) for failing to protect traditional stores. They say that many in fact had violated government regulations.

The Jakarta administration has issued Bylaw No. 2/2002 on private markets in Jakarta, which regulates pricing policies, minimum distance from traditional markets and cooperation with informal businesses.

The bylaw stipulates that minimarkets must not price their goods at rates far lower than those in grocery stores in the area and must be located outside a radius of 0.5 kilometers from traditional markets.

Meanwhile, hypermarkets must stock nine basic needs supplied by small enterprises through a partnership program, and must be located outside a radius of 2.5 km from traditional markets and must provide space for informal businesses, including street and sidewalk vendors, in up to 20 percent of its area.

Uncertain future for government banks

Laksamana.Net - June 14, 2004

Laksamana.Net -- Divestment of the country's largest banks may not proceed as the government or the central bank plan as Bank Negara Indonesia (BNI) gears up to expand through a merger and push for the retrieval of funds stolen last year.

State-owned Enterprises Minister Laksamana Sukardi said last week that the government had decided against a proposal by state-owned BNI to merge with Bank Permata, which was formed by the government two years ago from five troubled banks to create a single institution with assets of some Rp30 trillion.

Sukardi's statement came after the Consultative Group on Indonesia (CGI) warned against more mergers of state-owned banks at its bi-annual meeting two weeks ago.

The government moved to reinforce its commitment to fully privatizing Bank Permata and named ABN Amro as the financial adviser for the planned sale of a 71% stake. The government plans to sell its remaining stake of around 20% on the market later this year.

Prior to ABN Amro's appointment, BNI president Sigit Pramono said the bank would accept the government's decision on the merger plan, reported The Jakarta Post.

But BNI deputy director Arwin Rasjid told reporters on Thursday that the bank was still considering entering a bid for Bank Permata when it goes on the market. He said the bank was looking into credit and capital adequacy ratio (CAR) regulations to determine if BNI can lawfully take part in the Permata divestment, reported detikcom.

The timetable for the Permata divestment remains unclear but should wind up by the end of the year, with road shows to be launched in late July.

Mohammad Syahrial, chief of the government-owned assets management agency PT Perusahaan Pengelola Aset (PT PPA), which oversees Bank Permata, said 19 foreign and local consortia have so far expressed interest in buying the stake.

Bisnis Indonesia quoted banking sources two weeks ago stating that HSBC and Standard Chartered are expected to submit offers following the appointment of a financial advisor for the divestment.

Meanwhile, BNI managers told the Far Eastern Economic Review that their proposal to merge with Permata faced resistance because the central bank, Bank Indonesia (BI), would prefer Bank Mandiri to swallow BNI.

A BI spokesman denied any specific merger plans and said that "it is up to bank owners to decide who to merge with."

A merger of the country's two largest banks in terms of assets would bring the government one step closer to launching its first regional bank.

The central bank requires a capital base of Rp50 trillion ($6 billion) for a bank serving Southeast Asia, while Mandiri's capital base stands at only Rp20 trillion.

The depressed state of the market and the falling currency are fuelling speculation about the future of both banks and have delayed the banks' cash-raising plans.

The government put plans to sell a 10% stake in Bank Mandiri on hold, while BNI has delayed a plan to issue $300 million in bonds.

The government, which has a 99.12% stake in BNI, plans to sell a 30% stake in the bank in the third quarter of this year.

Zero recovery rate on scandal

Meanwhile, BNI's Pramono told reporters that the bank has yet to lay its hands on any of the assets purchased with funds stolen in the banking scandal that rocked the industry late last year.

Of the Rp1.7 trillion ($201 million) stolen in the fictitious letter of credit scam, police and prosecutors have tracked down around Rp1.3 trillion in 12 assets in the form of cash deposits, property, land, factories and other assets.

However, the authorities have only closed on Rp80 billion in assets, Pramono said after meeting House legislators on Thursday, reported detikcom.

He said the bank had hired a new legal team to push for the speedy recovery of the funds although it was wary of disturbing investigators and prosecutors working on the fraud case.

Head of House Sub-Commission IX on banking, Anthony Zedra Abidin, was less diplomatic when he faced reporters after the session with BNI and Bank Indonesia representatives. He said the Commission would call all parties associated with the investigation of the scandal including the police, prosecutors and BNI and BI managements to get to the bottom of their dismal performance in retrieving the funds.

He said the Commission was also concerned that the legal process was running off the rails, as only BNI employees involved in the fraud remained in police custody, reported Bisnis Indonesia.

Wealthy businessmen Adrian Waworuntu and Jeffrey Basso, although remaining prime suspects in the case, had been released, he said.

BNI's performance plummeted last year after it was forced to allocate Rp1.2 trillion to cover the funds allegedly channeled to companies controlled by Waworuntu and Basso, among others.

As a result of the drain on bank funds, BNI's profit slumped from Rp2.5 trillion in 2002 to just Rp419 billion in 2003.

Pramono reiterated last week that the scandal would not impact on the bank's performance this year.

BNI credit plans The bank released new information on lending last week revealing that business is picking up.

BNI deputy director Arwin Rasjid said the bank expects net interest income to grow 20% in 2004 due to an increase in lending and that BNI hopes to channel up to Rp12 trillion in new loans this year.

He said the bank's net interest income in the first quarter of this year rose 54% on year to Rp1.65 trillion, reported Dow Jones Newswires. As of March 31, BNI's total outstanding loans stood at Rp47.7 trillion -- up from Rp46.4 trillion at end-December.

State banks' NPLs reach Rp9T In more state-owned banking news, the Ministry for Cooperatives and Small and Medium Enterprises told the House last week that nonperforming loans (NPLs) at the country's four largest state-owned banks totaled Rp8.97 trillion as of February this year.

Minister Ali Marwan Hanan said the figure was well down on the Rp12.876 trillion in NPLs held by 514,898 debtors recorded as of July 2002 at BNI, Bank Mandiri, Bank Tabungan Nasional (BTN) and Bank Rakyat Indonesia (BRI).

BRI holds the largest chuck of NPLs, with Rp2.72 trillion locked in loans to 984 debtors, followed by BNI, with Rp2.53 trillion in 35,931 bad loans. Bank Mandiri recorded NPLs of Rp1.28 trillion in 586 accounts, while BTN listed Rp1.4 trillion in NPLs held by 1,405 debtors, reported detikcom.

Jobs in key sectors drop, says BPS

Jakarta Post - June 14, 2004

Zakki P. Hakim, Jakarta -- The number of jobs in key industries such as manufacturing, construction and trade has contracted significantly as an unfavorable labor environment has prompted companies to hire fewer workers and cancel investment plans, according to the latest government labor data.

The 2003 National Labor Force Survey (Sakernas) report published by the Central Statistics Agency (BPS) also suggested that more women quit their jobs, particularly due to rising transportation costs.

According to the report, obtained by The Jakarta Post over the weekend, the number of jobs in the manufacturing sector shrank by 9.76 percent to 10.93 million last year from 12.11 million in 2002.

The number of jobs in the construction and trade sectors (retail, hotel and restaurant), declined by 3.90 percent and 5.34 percent to 4.11 million and 16.84 million, respectively. For many years the above have been the main provider of jobs in the formal sector, particularly in the heavily populated island of Java.

Arif Rahman Hakim, an economist at the National Development Planning Agency (Bappenas), said that the decline in the number of jobs was linked mainly to widespread labor problems and unfavorable labor regulations, which had prompted companies to adopt capital-intensive approach instead of hiring people.

Analysts have said that labor regulations that are too favorable to workers in terms of higher wages and other benefits had increased costs for companies at a time when business was slow due to weak economic growth at home and a slow recovery in the export market.

The lingering labor conflict is also seen as one of the major factors discouraging new investment, which in turn has caused the economy to grow at a mere 3 percent to 4 percent per year, as it relies heavily on domestic consumption. Such low growth is deemed insufficient to provide sufficient jobs for some 2 million people entering the job market each year. The economy needs to grow at around 6 percent to 7 percent.

The labor report said that open unemployment in 2003 increased to 9.45 percent (9.53 million people) from 9.05 percent (9.13 million) the previous year.

The report, however, said that the number of jobs in the finance, insurance and real estate sectors increased by 30.67 percent to 1.3 million jobs. These, particularly banking, started to recover from the impact of the late-1990s economic crisis.

Agriculture, forestry and fisheries created about 1.5 million new jobs last year.

Another bizarre development last year, according to the report, is that the workforce in a country of 220 million population declined to 100.32 million from 100.78 million.

This is in spite of the fact that the working-age population increased to 152 million from 148.7 million people.

"This is a peculiar development," said University of Indonesia economist Chatib Basri, adding that it was probably caused by a rising number of women opting to stay at home and exit the workforce.

Arif concurred, saying that rising transportation costs, following increases in fuel prices and other costs, had discouraged 3.5 million women (around 3.7 percent of the total workforce) from continuing in their part-time jobs.

New vehicle sales jumps 41% on year

Dow Jones Newswires - June 14, 2004

Jakarta -- Sales of new vehicles in Indonesia jumped 41% on year in May to 39,955 from 28,272 in the same month a year ago, the Indonesian car assemblers' association Gaikindo said Monday.

It added that new vehicle sales in the country rose 0.3% in May from 39,841 in April. Falling interest rates in Indonesia have helped motor vehicle sales in the country.

The benchmark one-month weighted average rate of Sertifikat Bank Indonesia notes has fallen to its current 7.33% from nearly 12% in early January 2003.

Gaikindo said market leader PT Astra International sold 22,347 vehicles, including exports, in May. Its sales rose 46% from 15,302 in the same month a year ago, and nearly 1% from 22,127 in April.

Prudent ruling at last

Jakarta Post Editorial - June 14, 2004

The Supreme Court, as widely expected, duly overturned the Jakarta Commercial Court's bankruptcy ruling of April 23 against the Indonesian subsidiary of British insurance company Prudential PLC, asserting that the case had been mishandled.

Supreme Court Justice Mariana Sutadi explained after the awarding of the verdict early last week that the case between Prudential and one of its former insurance agents is not about a debt due and payable, as stipulated in the bankruptcy law, but a dispute over an agreement.

Businesspeople certainly welcome the ruling as further evidence that the justice system in the country is not entirely hopeless, as many have perceived.

However relieved PT Prudential Life Assurance should have been with the prudent ruling, the damage had nevertheless been done. Most businesses, especially foreign investors, remain greatly apprehensive, worried about the uncertainty arising from what has widely been perceived as one of the most corrupt judicial systems in the world.

Businesspeople are concerned about the great risk of falling into legal black holes, unless several provisions within the 1999 Bankruptcy Law that allow judges to declare even solvent companies bankrupt are amended.

Remember the case of the Indonesian subsidiary of Canadian Manulife in mid-June, 2002? The fourth-largest insurance company in the country was declared bankrupt by the Jakarta Commercial Court because of its failure to pay dividends (not even debt) to its Indonesian shareholders. Even though this absurd verdict was eventually overturned by the Supreme Court, companies then had expressed great apprehension that they could fall into the same legal quicksand. The government, also, had immediately realized after the bizarre ruling against Manulife that the bankruptcy law should be amended to prevent such an insensible decision. However, the draft amendments that were submitted to the House of Representatives more than two years ago remain untouched.

It was later the unfortunate turn of Prudential, with total assets of more than US$180 million, to fall into the quicksand late last April after the Commercial Court ruled that it had failed to pay a disputed $400,000 debt to one of its former insurance agents.

Apart from the absurd bankruptcy rulings, there is a long string of other bizarre court verdicts by district courts on commercial disputes, which have severely damaged public trust in the justice system and worsened legal uncertainty.

Just to mention a few of them: As recently as mid-May, British Rowe Evans agro-group, was hit by the ruling of a district court in Medan, North Sumatra, which arbitrarily annulled its $2.3 million purchase of a plantation in that province from a local businessman. Also, early that same month, the district court in Serang, Banten province, ruled that the issuance of $185 million in bonds by PT Tri Polyta in 1996 was illegal and did not need to be repaid to creditors, including Merrill Lynch and Lehman Brothers. In August, 2003, PT Danareksa Jakarta International gained a court ruling in Jakarta that freed it from the obligation to repay $180 million in syndicated loans to foreign creditors, including US Lone Star Fund.

Another bizarre bankruptcy ruling, such as that against Prudential, could have been prevented had the amendments been approved by the House.

The proposed amendments include stipulations that an insurance company can be declared bankrupt only by the finance minister. Such provisions are similar to the stipulations in the same law that allow banks to be declared bankrupt only by the central bank and securities companies by the Capital Market Supervisory Agency (Bapepam).

The planned amendments, also, will raise the criteria for filing a bankruptcy case. At present, the criteria is simply two debts, one which is due and payable, even though the debtors, as in the cases of Prudential and Manulife, have assets that far outweigh their liabilities.

To be sure, we need a bankruptcy system to force debtors to repay their debts in good faith but the rulings should be designed to be fair to both the debtors and creditors.

It is needless to reiterate the urgency for the House to enact the proposed amendments to the bankruptcy law to close any loopholes that may be used by corrupt judges or lawyers. True, the amendments would not immediately make the bankruptcy regime more effective and credible, yet better rules of the game would be a good start to improve the system, to make the procedures more clear cut.