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Indonesia News Digest 11 – March 17-23, 2007

News & issues

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 News & issues

Government admits to weak labor law inspection

Jakarta Post - March 22, 2007

Ridwan Max Sijabat, Jakarta – The government admitted Wednesday that the weak enforcement of industrial relations laws has left millions of workers unprotected in thousands of companies nationwide.

Director general for industrial relations and labor standards at the Manpower Ministry, Suwito, said increasing labor strikes and industrial disputes were a reflection of lacking government workplace inspections and the overall weak enforcement of the Labor Law.

"It looks impossible to ensure employers' compliance with the Labor Law to provide normative and social protection for their workers because the government has only 1,800 labor inspectors, while the number of medium- and large-scale companies to be supervised has reached almost 179,000. The ratio is 1:10 and supervision under such a ratio is not effective," he said after presenting the results of an industrial relations inspection of the airline industry here.

Suwito said the weak supervision of labor laws was also connected with the implementation of regional autonomy, which has led to the promotion of some inspectors to other sections of government.

"The Manpower and Transmigration Ministry can no longer extend its hands to supervise the inspectors under regional autonomy. Besides, many regions have appointed unauthorized officers as labor inspectors," he said.

Chairman of the Indonesian Employers' Association (Apindo), Sofjan Wanandi, said recently that many labor inspectors had not engaged with employers to force the latter to comply with the Labor Law, but to extort them.

The government's inspection of the airline industry revealed that many airline companies, including national flag carrier Garuda Indonesia, have yet to register their crew members and ground staff in obligatory social security programs (Jamsostek).

Suwito acknowledged the inspection was not conducted in accordance with official procedures, but added that inspectors only interviewed certain officers of the violating airline companies.

"The violating airline companies have pledged to register all their employees with Jamsostek," he said.

He said that because of the weak enforcement of the Labor Law by relevant authorities, only 7.9 million of the 28 million workers registered with Jamsostek have remained active members.

The Manpower and Transmigration Minister said recently he would enhance cooperation with the police and the Attorney General's Office to take action against companies violating the 1992 Social Security Law.

Meanwhile, the president of state-owned PT Jamsostek, Hotbonar Sinaga, called on the government to fully enforce the law in order to push employers to join the social security programs.

"Employers should treat their workers as their main asset and partners and provide them legal protection and maximum benefits through the social security programs," he said.

He said that Jamsostek did not have the authority to conduct investigations or force employers to comply with labor laws.

Hotbonar added that many employers have registered only a portion of their workers or understated their gross monthly salaries when paying their insurance premiums to Jamsostek.

"Such violations have been proven by the low compensation received by relatives of workers killed in occupational accidents, airplane crashes and ship mishaps," he said.

Government told to drop deal with Microsoft

Jakarta Post - March 17, 2007

Ary Hermawan, Jakarta – The Business Competition Supervisory Commission (KPPU) has urged the government to annul its recent deal with US giant software producer Microsoft for the use of the latter's software in state offices and institutions.

The antimonopoly agency said Friday in Jakarta that if the government went ahead with the deal, it would violate the 1999 Monopolies Law.

"The commission believes that the Memorandum of Understanding with Microsoft is not the right way to end software piracy as it runs contrary to the principles of healthy business competition," the monopoly watchdog said in a statement Friday.

The MoU was signed in November last year by Information and Communication Minister Sofyan Djalil and Microsoft Southeast Asia director Chris Atkinson. In it, the government reportedly agreed to purchase 35,496 licensed copies of the Microsoft Windows operating system, and 117,480 copies of the Microsoft Office package for about Rp 377 billion (about US$41.9 million).

However, the MoU, which the government said was primarily aimed at eradicating the use of pirated software in government institutions, is not binding unless the two parties sign a formal agreement before March 31.

The KPPU said the MoU was "absurd" as it was based on the assumption that all desktops in government offices were using Microsoft software.

"It's certainly absurd as there are many computers, such as those in the State Ministry for Research and Technology, that have been using open-source software," said commission member Tresna P. Soemardi.

He said that the MoU could serve as a barrier to entry by software producers other than Microsoft, and impede the development of the domestic software industry.

"The MoU will also result in government institutions having no other option when purchasing software," he said, adding that the government would thus be handing a monopoly to Microsoft should the MoU be followed by a formal contract.

Free and open source software, such as Linux, Open Office, Ubuntu, and locally produced software Pinux, are now widely known and used in the public sector. The government itself recently launched the "Indonesia Goes Open Source" (IGOS) campaign.

Microsoft currently holds a 90 percent share of the country's operating-system and office-software markets. This figure, however, also reflects the number of personal computers using unlicensed Microsoft software in government offices.

Indonesia is one of the biggest centers of software piracy in the world, third only after Zimbabwe and Vietnam. This has badly affected the local software industry as a result of the availability of pirated Microsoft software.

The KPPU said the key to ending piracy was stricter law enforcement, and doubted that an agreement with Microsoft would put an end to the problem. "The MoU does not touch on the root of the problem, which is law enforcement," Tresna said.

Microsoft Indonesia president director Tony Chen has said that the deal was initiated by the Indonesian government as part of its effort to promote the information technology sector as a whole.

Promising a 70 percent discount on licensing prices, Tony said the MoU would result in savings of up to US$200 million for the government, compared to the $250 million it would cost if the government was to buy licenses at regular prices. The government would also save $60 million on free upgrades.

Meanwhile, Sofyan Djalil has argued that the MoU with Microsoft was necessary as the government needed to move quickly to develop the country's IT sector and public services, while the use of open source software was still subject to limitations.

Tresna said that both Microsoft and the ministry could face sanctions for breaching the Monopolies Law should the two press ahead with the multimillion dollar deal. "We will impose sanctions against any party which is found guilty of operating a business monopoly," he said.

Regulator cooks up team to fry hackers

Jakarta Post - March 22, 2007

Andi Haswidi, Jakarta – They say the Internet knows no boundaries. Unfortunately, neither do the hackers, as President Susilo Bambang Yudhoyono discovered after a presidential website recently fell victim to the unwanted attentions of a hacker.

The attack took place on March 17, when the hacker, calling himself Qwerty, redirected those trying to access one of two presidential websites, www.presidensby.info, to another website featuring a protest letter to the President that satirically mimicked the historically famous Tritura – the "people's three demands" to then-president Sukarno back in the 1960s.

Qwerty, claiming to represent the Indonesia's underground, demanded that the President reduce the cost of accessing the Internet, as was the case in China and India.

He also expressed support for Indonesia's Go Open-Source program, while urging the President to eradicate corruption, collusion, nepotism to avoid "further punishments from God."

No serious damage was done as the attack lasted less than two days. But it was enough to spark a ruckus among regulators and officials as they found themselves coming under pressure to act.

With unusual alacrity for a government body, the Posts and Telecommunications Directorate General has taken action to provide the necessary legal basis for the establishment of an "Internet security committee".

"We expect the regulations to be ready in June and for the committee to commence operations in November," the directorate's spokesperson, Gatot S. Dewa Broto, told The Jakarta Post by telephone Wednesday.

Currently, the directorate is on the verge of finalizing amendments to a 2006 Information and Communications Minister's Decree on Internet Protocol (IP)-based telecommunications networks security, which would allow the directorate to appoint security officers as the Internet security committee's eyes and ears.

The necessary hardware and software to support the committee's work has already been procured at a total cost of about Rp 4 billion (about US$436,000), Gatot said.

Upon its establishment, the committee will be responsible for developing and operating a database surveillance mechanism and securing IP-based networks.

Survey sees rising tide of regionalism

Jakarta Post - March 21, 2007

Jakarta – Most Indonesians are willing to die to prevent separatism but at the same time are exhibiting stronger tendencies toward regionalism, a recent poll has revealed.

The latest survey conducted by the Indonesian Survey Institute (LSI) confirmed Tuesday that regional autonomy, which started seven years ago predominantly to address the problem of separatism, has not solved the problem of regionalism.

However, many still think that local autonomy is the best political solution to many issues, particularly in overcoming poverty.

Of 1,240 respondents from 33 provinces surveyed between March 5 and March 15, 74 percent said that they were proud to be Indonesians, while only 26 percent said they were proud of their local heritage.

About 86 percent of respondents said they would oppose any secessionist movement, while 14 percent said they would not object if certain parts of the country gained independence.

The LSI concluded that 67 percent of the respondents had a strong feeling of loyalty toward Indonesia, compared to the 33 percent that had a weak sense of loyalty. "Indonesians are not only nationalist but also patriotic," said Anis Baswedan, a senior researcher at the LSI.

However, the poll also found that more than half of the respondents, or 62 percent, were not tolerant toward people from outside their region. About 47 percent preferred putra daerah or local politicians to become regents, with 48 percent stating that governors should be locals.

"The statistical analysis shows that the sense of local autonomy is not correlated to the sense of national unity," said Anis.

"The implication of nationalism should be reflected in people's minds and in the state policy of equal opportunity. We have a problem with nationalism here because six out of 10 Indonesians are not tolerant toward their fellow citizens from other parts of the country," said Anis.

LSI also found that in general most people felt that local autonomy had had no significant impact on their lives when compared to the situation under the previous, centralized, government.

Only 23 percent said unemployment was being alleviated, 33 percent said there was no difference and 40 percent said it was worse than before. About 27 percent said people were better off under local administrations, 34 percent said people still faced the same level of poverty and 34 percent said poverty was even worse.

"Generally people felt there was no difference between the previous centralized system and local autonomy. This indicates that local autonomy has not reached the goals expected by the public," said Anis.

Despite the discontent about local autonomy, people still preferred autonomy to centralism, with 73 percent of respondents supporting local autonomy and only 27 percent rejecting it.

President holds cabinet meeting, septic tank overflows... Yuck!

Detik.com - March 20, 2007

Luhur Hertanto, Jakarta – Like any other ordinary household, the Presidential Palace also faces common problems that affect other homes. One of these is when the septic tank overflows.

This is what befell one of the septic tanks at the State Palace Complex in Jakarta on Tuesday March 20. Strongly suspected of being over loaded, the septic tank disgorged its contents out onto the ground. Yuck...

Admittedly there wasn't that much of it, but it was enough to cause staff to run helter-skelter trying to clean up the "load" that had spilled out.

Understand, the problematic septic tank is located behind the presidential offices and the overflow occurred in the middle of a cabinet plenary meeting being chaired by President Susilo Bambang Yudhoyono.

"Apparently the septic tank's capacity was too small, it should have been emptied more regularly", was the analysis put forward by one of the cleaning staff.

Together with a college, they rushed to clean up the rear corridors of the presidential offices that were inundated with the muck. One person sprayed the floors while another pushed the water out with a broom.

The flooded corridor is a used as smoking area for guards from the presidential security detail and ministerial assistants. As they waited for the cabinet meeting to end, they smoked or drank coffee while chatting with journalists.

The septic tank is located under a small open room between the musholla (small room set aside in a public place for performance of religious duties) and an air-conditioning machine room that also doubles as a storeroom.

According to information obtained by Detik.com, the last time the septic tank was emptied was around one-and-a-half years ago. Perhaps because the activities at the presidential offices have been so intense over that period, the septic tank filled up very quickly.

So it turns out that the septic tanks at the State Palace and ordinary households... yeah... well it's the same old problem right... (lh/sss)

[Translated by James Balowski.]

 Aceh

Summary of regulation on Acehnese local political parties

Aceh Kita - March 21, 2007

The central government has issued Government Regulation Number 20/2007 on Local Political Parties in Aceh. The decision was announced at the State Palace yesterday. The following is a summary by Aceh Kita's editors of the government regulation that so many have been waiting for.

Definition of a local political party

Article 1

A local political party is a political organisation voluntarily formed by a group of Indonesian citizens that reside in Aceh based on an agreed desire and ideal of struggling for the interests of its members, the public, the nation and the state through the election of members of the Acehnese House of Representatives (DPRA), the Regional House of Representatives (DPRK), the governor and deputy governor, as well as regents/deputy regents and mayors/deputy mayors.

Local party requirements

Article 2, Paragraph c

A local political party shall have management boards in at least 50 percent of the regencies/municipalities in Aceh and 25 percent of the sub-districts in each related regency, and pay attention to having a representation of women of at least 30 percent.

Management board

Article 7

1. A local political party's [central] management board shall be located in the capital city of Aceh.

2. Local political parties can have management boards from the level of the village/kampung or other names.

Affiliation with national political parties

Article 10

1. A political party has the right to be affiliated with or cooperate in other forms with local political parties or national political parties.

2. Affiliation or cooperation in other forms with local political parties or national political parties shall be carried out to propose candidate tickets for the governor and deputy governor, candidate regents and deputy regents, as well as candidate mayors and deputy mayors.

Dual membership

Article 11

1. In order to open up participatory space for local political party members in national elections, local party members as individuals may hold dual membership with one of the national political parties.

2. The participatory space for local political party members as referred to in Paragraph 1 is meant in the context of local political party members being able to elect or be elected in national elections.

3. Dual membership as referred to in Paragraph 1 can take place after obtaining written permission from the local political party leadership.

Article 12, Paragraph 3, Point c

Local parties can be disbanded by a Constitutional Court decision.

Funding sources

Article 17

1. Financial assistance to a local political party shall be provided proportionally based on the number of seats the local political party gains in the DPRA and/or DPRK.

2. The size of the financial assistance to local political parties as referred to in Paragraph 1 shall not exceed the size of the assistance for national political parties.

3. Assistance as referred to in Paragraph 2 can come from the Aceh State Budget (APBA) and the Regency State Budget (ABPK).

4. More detail provisions pertaining to the size of the assistance, the procedures for its disbursement, and the procedures of liability shall be regulated in a by-law.

Supervisor

Article 18

The Department of Regional Offices in Aceh shall supervise local political parties through research and/or checks in the context of fulfilling the following requirements:

a. Administrative.

b. Substantive that covers principles, specific character, ideals, membership, the use of a name, symbol and logo, and the obligations of local political parties.

[Translated by James Balowski. Note that the acronyms DPRA, DPRK, APBA and ABPK are as they appeared in the original text.]

 West Papua

Papuans seek global support for UN peacekeepers, free elections

South China Morning Post - March 22, 2007

Fabio Scarpello – The Reverend Socrates Sofyan Yoman is a soft- spoken man. But his voice turns firm when asked what is the way forward for Papua, the region where he lives and where most locals have been demanding independence for nearly four decades.

"The only way out is self-determination. We have the right to decide for ourselves," said the chairman of the West Papuan Baptist Church.

Mr Socrates does not trust Jakarta. Nor does he think the 2001 Special Autonomy Law is the answer to the region's problems.

"In Special Autonomy there was a hope of improving the people's standards of living; but the law has not stopped the tears and blood of the indigenous, and the truth is that it gives the Indonesians more of a chance to use more cruel and inhuman policies to oppress the Papuans," he said from the provincial capital, Jayapura.

His comments point to the recent splitting of Papua into two provinces – Papua and West Irian Jaya – as the latest evidence of Jakarta 's bad faith. "The Special Autonomy Law mentions one Papua," Mr Socrates said. " Jakarta 's move is illegal and a typical divide-and-rule tactic."

His view is shared by most analysts, who agree the move has backfired, amplifying Papuans' mistrust in the central government, and undermining the pro-autonomy, moderate intellectuals.

Yet, for Mr Socrates – who claimed to speak for most Papuans – the Special Autonomy Law's failure is just an added grievance. His call for self-determination is spurred by what he says is "constant abuse by the Indonesia Military [TNI], increased militarisation of the province, relentless arrival of migrants and the discrimination perpetrated against them on their own land".

Jakarta maintains that the situation is not as bad as the picture painted, that the pro-independence feeling is limited, and that the region is governed by locals. In regards to the ongoing "voluntary" migration to Papua, Saut Situmorang from the Interior Ministry said that "Indonesians can freely move, and it is good to foster the sentiment that we are all brothers".

Facts are difficult to confirm. But credible information validates the Papuans' side of the story. Recent reports trickling out from the region tell of more than 5,000 people being forced to flee their houses after a TNI offensive in Puncak Jaya. The attack was spurred by the hoisting of the Morning Star flag, Papua's most important nationalistic symbol, by alleged members of the Organisasi Papua Merdeka (OPM), last December. OPM is a small rebel group active in the region since 1965.

Diaz Gwijangge, a representative of the Institute for Human Rights Study and Advocacy, said the refugees were living in the forest, in precarious conditions. He added that "some have died of hunger and diseases, and more will die if nothing is done".

The Puncak Jaya episode is not an isolated case. Locals said "proxy OPMs are used by the TNI as an excuse to attack and justify their presence".

General Agus Widjojo, a former TNI chief of territorial affairs, admitted there were problems in controlling troops, especially in conflict areas. "The TNI command structure expects to be followed from top to bottom. But this is still not perfectly implemented as we are in a transition period," he said.

The reason why the TNI wants to stay in Papua is, basically, money. The TNI receives only 30 per cent of its budget from the Indonesian government. In Papua, the TNI is involved in a string of businesses, including prostitution, illegal logging and protection.

US mining giant Freeport McMoRan – Indonesia's largest foreign taxpayer – has admitted paying US$5.6 million annually for "protection" to the TNI, in addition to providing US$37 million to build a new military base. Freeport is one of the multinationals that Tapol, the Indonesia Human Rights Campaign, said "are plundering Papua's immense natural resources and threatening the very existence of the Papuans".

Observers say Papua's rich natural resources have been exploited for the benefit of the TNI, the Indonesian treasury, and the elite in Jakarta, leaving the Papuan population as one of the poorest in Indonesia.

Official data shows there are 12,000 TNI troops and 2,500 paramilitary police in Papua. Other sources say there are 50,000. The TNI has announced a troop increase soon, and rumours say that 15,000 more troops will be sent to Papua by 2009. "There are soldiers everywhere; in every corner, in every village. It is scary and intimidating," said a resident.

There are also many reports of abuse by the police. In a recent report, the International Crisis Group noted that the "human rights situation has improved with democratisation, but serious abuse still occurs and the officers responsible are seldom held accountable".

In its latest report, Human Rights Watch underlined how Papua's political activists are targeted for arrest. The report recorded a number of people sentenced to long jail terms for raising the Morning Star flag or expressing dissent. Papuans are also starting to be victims of a slow "cultural and religious genocide".

"Genocide is not only about killing. It is also about seeing our culture and religion disappearing with the arrival of migrants," said Mr Socrates. "Three Royal Line passenger ships bring 15,000 migrants to Papua every week. You can see mosques everywhere."

The word "genocide" was used in this context in a 2003 Yale University report, which argued that the influx of non-Papuan Indonesians was diluting the ethnic Papuans to a point that could be considered "the act element of genocide". Papuans, a mix of 312 tribes of ethnic Melanesians and mostly Christians, have little in common with the Muslim Indonesians who have landed in the region since it was annexed. In 1960, Papuans accounted for 97 per cent of the population. Today, they are about 50 per cent, although Jakarta stopped its internal migration programme in 2000. Muslims migrants are the majority in the main cities.

Jakarta, and many of the migrants in Papua, also perceive the native Papuans as "stupid, drunkards and primitive", according to Catholic priest Neles Tebay. He said this led to "the presumption of incompetence and the assertion that Papuans cannot be trusted with jobs of responsibilities, and need to be civilised".

The discrimination has exacerbated the divide along ethnic and religious lines and created tension. Credible reports talk of the sprouting of TNI-backed Islamic militias. Some fear that ethnic clashes loom.

Papuans' frustration, anger and fear have translated into an effort to force their plight onto the world stage. "Protesting in Papua only leads to beatings and arrests," said a local source.

Mr Socrates added that "the only way forward is to involve the international community". The Papuans' main objective is a revision of history and the acknowledgment that the 1969 Act of Free Choice was an injustice. The act was a tainted referendum that decreed Papua's inclusion within Indonesia. They want it annulled and to vote again.

This strategy angers Jakarta, which considers Papua an internal problem and does not want to risk "another East Timor". East Timor broke away after the international community's outrage over TNI's abuse forced Jakarta to grant a referendum on independence and the landing of UN troops in 1999.

NGOs, church organisations and human rights groups have espoused the Papuans' cause worldwide. There are nods of support from some politicians in Britain, the US and Australia, among other countries. Only Vanuatu recognises Papua as an independent nation and it is doubtful more will follow, despite the confidence of Benny Wenda, the Papuan independence leader and chair of the Koteka Tribal Assembly, who is in exile in England.

But Mr Wenda and many others like him are not about to give up. "I fear that within 30 years, the Melanesian race will have disappeared from Papua," he said. "That's why I am not talking about autonomy. We need the international community to force Indonesia to withdraw from Papua.

"In its place, we need a UN peace-keeping force, which can guarantee a free, democratic self-determination vote. I will not stop until our day of freedom comes."

Forgotten region with a troubled past

Occupying the western half of New Guinea, Papua is virtually unknown beyond the circle of activists and regional experts. Rooted in history, the region's predicament is compounded by abuse, ethnicity and money, and clouded by a lack of independent reports from the area, where foreign journalists are forbidden to enter.

Papua was not included in the Indonesian declaration of independence in 1945. The Netherlands, the former colonial power, saw it as a separate entity from the rest of Indonesia and decided to set it on a path of self-determination to be achieved by 1970. On December 1, 1961, Papuans were allowed to hoist the Morning Star flag and declare independence.

But the region was de facto invaded by Jakarta in 1962. At the beginning, the Netherlands stood firm and war with Indonesia loomed. But Papua was too small in a political scenario gripped by the cold war syndrome.

Washington feared Jakarta could fall under the spell of communism and pressured the Dutch to let Papua go. The UN watched powerlessly as Jakarta selected 1,022 Papuans and threatened them into accepting inclusion within Indonesia in a 1969 referendum, paradoxically called the Act of Free Choice. A 2005 study by the Dutch government called it "a sham".

Papuans' sense of betrayal has been inflamed by the harshness of Indonesian rule. Even before the Act of Free Choice, the OPM had started fighting for independence. The small, badly armed rebel group never posed a real threat to Jakarta, but the TNI response has been disproportionate, with widespread abuse and a civilian death toll that sources estimate at up to 100,000.

In 1999, a delegation of 100 Papuans met Indonesian president B.J. Habibie in Jakarta. Their message: Papua wants independence. The climax of the peaceful push for freedom was the Second Papua People's Congress, in Jayapura, a few months later, and attended by an estimated 15,000 people.

A change in the country's leadership, the loss of East Timor, and the growing pro-independence feeling in Papua worried Jakarta.

A 2001 Special Autonomy Law was the central government's only significant attempt to reach out to the Papuans. Although wide in principle, autonomy has never been implemented.

Council supports formation of Papua's first local political party

Radio New Zealand - March 22, 2007

The Cultural Institute of the Papua People's Council or MRP in Indonesia says it fully supports the formation of Papua's first local political party, the Papua People's Awakening Party.

The MRP's Vice Chairwoman, Hanna Wikoyabi, says the movement that led to the new party's establishment could lift the indigenous Papua people's esteem and dignity.

She says a provision in Law No 21 on Papua Province's Special Autonomy enables more indigenous Papuan people to run in legislative elections at national and regional levels in the Indonesian Province.

She says the local political party must be a means for people from various walks of life, including women, clergymen, youth, customary communities, to have a chance to win seats in legislatures.

Hanna Wikoyabi says there are already indigenous Papuans in the central parliament, provincial and district legislative councils for the 2004-2009 period but their number was still very small.

She says efforts should be made to increase their number through the 2009 general election so that indigenous Papuans could play a greater political role in the country.

Hundreds of Papuans demand employment in Timika

Jakarta Post - March 21, 2007

Markus Makur, Timika – Hundreds of job-seekers from the Amungme and Kamoro tribes staged a rally in front of the Memangkawai Mining Institute office in Mimika regency, Papua, demanding that they be given priority for employment in local projects.

At least 400 job-seekers from the Amungme and Kamoro Job-seekers Solidarity rode public buses from the Mimika capital of Timika to the institute's office, which acts as a recruitment agency for giant gold mining company PT Freeport Indonesia in Kuala Kencana district.

Based on Papua's special autonomy law, indigenous people should be given priority for recruitment at the company.

"As far as we can see, PT Freeport Indonesia and its subsidiaries have disregarded the local people. Now, in our rally we demand that Memangkawai employs local people at PT Freeport," said Gerson Meno Imbir, the head of the solidarity group.

Imbir said that PT Freeport Indonesia had never paid much attention to indigenous people, thereby contributing to unemployment in the region. "Now in the era of special autonomy, indigenous people should be given priority in PT Freeport recruitment," he said.

Deputy chief of the solidarity group Pontius Kelanangame questioned the achievements of the Mimika Manpower and Resettlement Office, which is considered to have been disregarding the needs of the Papuan indigenous people.

Kelanangame said that he felt nothing had been done by the office to help the local people. "We want to be involved in development in Mimika regency rather than simply being made development objects," he said.

Kelanangame said that PT Freeport and its subsidiaries had to pay attention to indigenous job-seekers. "We support progress in Mimika regency, but please pay attention to the indigenous people," he said.

Yusuf Tapa, one of Nemangkawai Mining Institute's staff members, said his office had received notification of the aspirations of job-seekers from Amungme and Kamoro as well as five other tribes.

Nemangkawai, he said, has been committed to recruiting at least 57 workers per month for employment at PT Freeport's underground, operations and mechanic sections and another 120 have joined training sessions as apprentices.

"Nemangkawai has contributed greatly to the seven tribes in terms of the development of worker's skills. Those learning enough skills will be transferred to PT Freeport," he said.

From March 26 to 30 there will be a recruitment test for local apprentices in Mimika. If they pass the test they will be trained, Yusuf said. If not they will be given another chance to try again at a later date, he added.

 Popular resistance

Villagers demand recycling rights

Jakarta Post - March 23, 2007

Bekasi – Hundreds of Jati Mulya villagers in Tambun Selatan district, Bekasi, rallied Thursday at car assembly company PT IndoMobil Suzuki International to demand the right to collect and resell metal shreds from the factory.

"We want the company to pay more attention to us. We can handle their waste management. Most of the residents are jobless," said rally coordinator Andriyanto.

Andriyanto said the company hired people from outside the village to handle its waste and metal scraps.

The company's management did not comment on the rally. Villagers threatened to organize a larger rally if the company refused to meet their demand.

Protesters say capital investment law a 'new form of colonialism'

Detik.com - March 23, 2007

Muhammad Nur Hayid, Jakarta – The ratification of the Draft Law on Capital Investment by the House of Representatives (DPR) is drawing opposition. The Poor People's Network (JRM) opposes what they call a new form of colonialism and are urging the DPR not to ratify the draft into law.

This opposition was conveyed by around 100 people from JRM in front of the main entrance to the DPR building in Senayan, South Jakarta, on Friday March 23.

During the action that began at around 3.30pm, they brought a number of posters with messages such as "Reject the Draft Law on Capital Investment", "Save Indonesia from the grip of foreign investors" and "Indonesia is ours, don't let it be robbed".

Aside from bringing posters, they also shouted their demands through a sound system placed on top of an open pickup truck. "Save Indonesia" and "Revoke the Draft Law on Capital Investment" they shouted.

The demonstrators, who came from a number of poor people's organisations also threatened to bring more people into the streets if the DPR ratifies the law. "The draft law clearly benefits investors and hurts us. If it is not revoked, we will bring even more people into the streets", said action coordinator Wahyu Susilo.

Although the action was held in front of the main entrance to the DPR, their shouts were able to reach the ears of Hasto Kristianto, a member of the special committee deliberating the draft law. The legislator from the Indonesian Democratic Party of Struggle (PDI-P) Faction promised that members from the party of the white snouted bull (PDI-P's symbol) would support the protesters' demands in the plenary meeting session.

"If we fail, then we will propose amendments on crucial articles, such as corporate crimes that must be acted on by law enforcement officials", he promised.

The action proceeded peacefully and did not disrupt traffic on the road in front of the DPR. It was also watched over by some 40 police offices from the Central Jakarta district police and the Tanah Abang sectoral police. (ary/nrl)

[Translated by James Balowski.]

Farmers, activists oppose bill on capital investment

Jakarta Post - March 21, 2007

Ridwan Max Sijabat, Jakarta – Hundreds of farmers and activists staged a demonstration outside the House of Representatives on Tuesday, protesting against the bill on capital investment.

They demanded that the House and the government discuss the contents of the bill in public before endorsing it.

Several legislators who received the demonstrators said the House would go ahead with its plan to pass the bill in the next plenary session since several civil groups had already given their opinions during the bill's deliberation.

The farmers joined forces with an alliance of NGOs to oppose the bill, which they said would bring suffering to farmers, unskilled workers and small- and medium-sized companies.

Henry Saragih, coordinator of the rally and chairman of the Federation of Indonesian Farmers' Unions, said all farmers' unions opposed the bill because it would only benefit foreign investors, whose security was being assured to exploit the resources-rich country.

"By giving the same treatment to foreign investors as domestic ones and a 95-year concession on land ownership, the bill is protecting foreign investors and assures their occupation of this rich country," Henry told the crowd.

He also said the bill was unacceptable as it prohibited the nationalization of foreign companies by the government. "The bill negates Indonesia's sovereignty over its territory and assets managed by multinational corporations," he said.

Irmadi Lubis, a member of the House special commission preparing the bill, defended it, saying it was needed to attract foreign investment, which would spur economic growth and general more job opportunities.

"After China and other ASEAN member countries, Indonesia has to follow suit, giving access as wide as possible to foreign investors to... the country," he said.

Lubis said the increasing opposition to the bill was unfortunate and caused by a lack of understanding of the bill's substance. "Granting a 95-year concession to foreign investors has long been implemented by China, Cambodia and Vietnam.

"These countries have an accumulation of concessions similar to those which Indonesia has given to many multinational corporation, such as PT Freeport McMoran Indonesia and PT Chevron Pacific Indonesia," he said.

"The bill bars the government from nationalizing foreign companies to ensure investment security and legal certainty. But the bill also recommends the government and the House (by law) take over foreign companies (found guilty of) committing corporate crimes."

Students demand release of farmers, condemn US aggression in Iraq

Detik.com - March 20, 2007

Zainal Effendi, Surabaya – Scores of protesters from the National Student Front (FMN) demonstrated at the East Java Regional Police Headquarters on Jl. Achmad Yani in the provincial capital of Surabaya on Tuesday March 20 demanding the release of recently detained farmers and condemning US agression in Iraq.

The student action proceeded in a relaxed fashion. Other than giving speeches, they simply sat at the main entrance to the police headquarters. Their effort to enter the building failed after they were stopped by police officers guarding the entrance.

In speeches the students urged the police to release 27 farmers that are still in detention at the Banyuwangi district police station over a recent land dispute in Kalibaru between farmers and the state-owned plantation company PTPN XIII.

Action coordinator Ridwan Lukman explained that the action was held in order to get the farmers released immediately. "We are also demanding responsibly from the United State for the invasion of Iraq four years ago up until now", said Ridwan.

A number of students also brought banners with messages such as "Save the victims of disasters, release the 27 Banyuwangi farmers unconditionally, health and nutritional food guarantees and compensation for the rice paddies and land of the victims of the Lapindo [mud disaster]".

The action, which even confused journalists because of the issues taken up were too global, broke up after two representatives handed a petition over to police. (gik/asy)

[Translated by James Balowski.]

Yogya students protest four years since US invasion of Iraq

Detik.com - March 20, 2007

Bagus Kurniawan, Yogyakarta – Dozens of students in the Central Java city of Yogyakarta held a demonstration on Tuesday March 20 condemning the US invasion of Iraq and demanding that US troops leave Iraq immediately.

The action, which was organised by the United People's Committee, began at the Abu Bakar Ali parking area on the northern side of the Garuda Yogyakarta Hotel. From there they march towards the Yogyakarta Regional House of Representatives (DPRD) on the intersection of Jl. Malioboro and the Yogyakarta central post office.

The protesters brought a banner with the writing "United People's Committee (KRB)" and a number of posters with demands such as "Stop the US invasion of Iraq", "Bush is the Number 1 terrorist" and "Bring Bush before the International Human Rights Court".

"Four years since the invasion by the US military and international troops in Iraq has resulted in the Iraqi people suffering. The US invasion of Iraq is the same thing as the invasion of Afghanistan, that is it is economically motivated", said action coordinator Adi Amril Darusamin during a speech in front of the main entrance to the DPRD.

The students also criticised the government of President Susilo Bambang Yudhoyono (SBY) and Vice President Jusuf Kalla as being foreign accomplices saying that they prioritise the interests of foreigners, particularly the US. This has caused much of the country's natural resources to come under foreign control such as PT Freeport, PT Newmont, PT Exxon Mobile Oil and PT Caltex.

"The SBY administration must have the courage to sever relations with the imperialist countries. The natural wealth that they have sucked up must be returned to bring prosperity to the people", said Darusamin. (bgs/djo)

[Translated by James Balowski.]

 Human rights/law

House agrees on investment bill with major changes

Jakarta Post - March 23, 2007

Andi Haswidi, Jakarta – A working committee of the House Representative has finally concluded the prolonged debate on the investment bill, which is now expected to be endorsed by a House plenary session scheduled for March 29.

"With a sigh of relief, we have finally arrived at the end of a long journey," Trade Minister Mari Elka Pangestu said in her capacity as the government's representative at what became the final meeting with the committee on the bill Thursday.

Despite major changes from the original draft submitted by the government to the working committee set up by House Commission VI in June 2006, the underlying spirit of the bill, which is to provide equal legal status to domestic and foreign investors, remains intact.

Commission VI chairman Didik J. Rachbini said he was satisfied with the end result of the long series of meetings as the aim of improving the investment climate by being more open to foreign investment could now be achieved without having to sacrifice the interests of the public at large.

A professor in international investment law from the University of Indonesia, Erman Rajagukguk, who was actively involved in the deliberation process as an expert advisor, said he considered the bill to be on a par with the legislative frameworks applied by Indonesia's competitors.

"I have studied many investment laws. And what we have now is comparable to those in foreign countries. We have a competitive incentive scheme, comparable land titles, and support for small and medium enterprises," he said.

Upon being enacted into law, the bill, which will become the 2007 Investment Law, will supersede the 1967 Foreign Investment Law and the 1968 Domestic Investment Law. The new legislation will cover all business sectors, including investment in the mining, and oil and gas sectors, although the technical aspects of investing in these sectors will continue to be governed by the Oil and Gas Law, and the Mining Law.

With regard to property rights, the maximum duration of a land cultivation right under the new law will be extended from 35 years at present to 95 years, and building rights from 50 to 80 years. Meanwhile, land usage rights, the length of which used to be determined by local administrations, will now be acquirable for a maximum period of 70 years.

Under the new law, both foreign and local firms will be entitled to enjoy the same incentives as long as they meet the requirements, such as investing in labor intensive industries, infrastructure projects, projects involving the transfer of technology, and so-called pioneering industries.

Fiscal incentives, such as tax reductions, tax breaks and tax deferments, are to be further provided for by government regulation

To reduce immigration obstacles, foreign investors will be entitled to two-year residency permits that will be subsequently convertible into permanent residency permits.

Miners issue 'white paper' against draft mining law

Jakarta Post - March 21, 2007

Ika Krismantari, Jakarta – Major mining companies issued a 'white paper' Tuesday, calling on the government to retain the Contract of Work (CoW) system under the proposed new mining law if it wanted to avoid creating a major impediment to new investment.

The 'white paper', which was issued by a coalition of major mining companies operating in Indonesia, will be submitted to the House of Representatives' working committee charged with deliberating the mining bill.

The companies' spokesperson, Subroto, who is also a former energy and mineral resources minister in president Soeharto's administration, said it would be better for Indonesia to stick with the COW system.

He said that the COW concept introduced by the 1967 Mining Law had proven its worth in attracting many major foreign investors to the country's mining sector.

Under the mining bill currently being deliberated, a mining firm will operate under a license issued by the local authority in the area where the mine is located.

With the introduction of a licensing system, the legal status of the mining company will be rendered inferior to that of the local government, especially as regards the resolution of disputes.

Unlike under the CoW system, where disputes were settled through independent arbitration, under the new licensing system all decisions will be up to the local authorities.

The status of mining firms was rendered inferior as the local governments could revoke their licenses at any time, Subroto said.

"Any change from the previous Contract of Work system will be a major setback for country's mining sector," Subroto said, adding that Indonesia had become one of the world's biggest tin, nickel, copper and gold producers over the past several years as a result, at least partly, of the CoW system.

Irwandy Arif, representing the Association of Indonesian Mining Professionals, said that the 'white paper' proposed a combination of a licensing and CoW system as a win-win solution for overcoming the deadlock.

The Golkar Party recently proposed that the concept of a "mining activity agreement", which would basically serve in a similar way to the current Contract of Work, be included in the draft law as an option for investors.

The draft mining law, which was submitted to the House last year, is currently being finalized. The House is expected to pass the bill into law this month if the question of the controversial licensing system is resolved.

TNI supports personnel summonses

Jakarta Post - March 23, 2007

Jakarta – The Indonesian Military (TNI) said it supports the planned questioning of its active and former officers by the Truth and Friendship Commission (KKP) over human rights violations following the 1999 referendum in Indonesia's former province of East Timor.

"TNI agrees and supports the move by the KKP. Indonesia and Timor Leste (East Timor) need to reach an agreement on ending the problems of the past so that we can start to develop our countries," TNI spokesman Col. Ahmad Yani Basuki said as quoted by detik.com news portal here Thursday.

The commission plans to seek an explanation for the incident through public hearings involving former president B.J. Habibie, former TNI chief (ret) Gen. Wiranto and a number of Indonesian Police officers and civilians on March 26 to 30.

Yani said TNI would never protect or cover up past criminal cases involving its officers.

Meanwhile, KKP's co-chairman Benjamin Mangkudilaga confirmed Thursday that Habibie, Wiranto and Nobel Peace Prize Winner Bishop Carlos Ximenes Felipe Belo would testify before the KKP.

"They have all confirmed they will come," Mangkudilaga said as quoted by AFP.

Campaigning for justice for human rights activist Munir

Green Left Weekly - March 21, 2007

Vannessa Hearman – Suciwati, the widow of Munir, the prominent Indonesian human rights activist killed by arsenic poisoning aboard a plane in 2004, visited Australia in February to call on the Australian government to help pressure Jakarta to resolve the case. Accompanying her was Usman Hamid, the executive director of Kontras – the Indonesian Commission for the Disappeared and Victims of Violence – an organisation set up by Munir.

On September 4, 2004, Munir boarded a Garuda plane bound for Amsterdam. He had accepted a seat upgrade offered to him by Pollycarpus Budihari Priyanto, an off-duty Garuda pilot. Munir reported feeling ill when the plane reached Singapore and by the time the plane touched down in Amsterdam, he was dead. An autopsy by Dutch authorities found a lethal dose of arsenic in his body.

Indonesian President Susilo Bambang Yudhoyono appointed a fact- finding team into Munir's murder, which recommended that both Garuda and the country's highest intelligence body – the National Intelligence Body (BIN) – be investigated for their role in Munir's murder. The findings of the fact-finding team, concluded in June 2005, have still not been released publicly and demands from human rights activists that BIN be investigated for its involvement have so far been ignored by Yudhoyono. Pollycarpus, who was convicted of Munir's murder, was released on appeal from jail in December last year, after serving just a few months. He was convicted of falsifying flight documents, for a letter ostensibly from Garuda permitting him to be on the Amsterdam flight.

According to Suciwati, telephone records showed that there were 40 phone calls between Pollycarpus and a BIN officer, Muchdi, just prior to the Garuda flight's departure. The Indonesian police cited lack of technical competence as one reason for not tracing the phone calls to and from Pollycarpus's mobile phone. Suciwati urged Australians to demand that the Indonesian government investigate Munir's murder. She contrasted the swift cooperation between the Australian Federal Police and the Indonesian police in the Bali bombing case with the lack of action on the Munir case. She argues that cooperation between the two countries must also take place on the question of human rights, contrasting this with the focus on the "war on terror".

BIN has refused to cooperate in allowing its officers to be interviewed in connection with the murder. Hamid, who served as secretary of the fact-finding team and advocated that BIN director Hendropriyono be investigated, is facing charges of defaming Hendropriyono.

Suciwati has been actively campaigning on the case, getting the agreement of UN Special Rapporteur Philip Alston to participate in reinvestigating the case. The Indonesian government rejected Alston's involvement, agreeing to reopen investigation into the case instead. Faced with an impasse in the criminal courts following Pollycarpus's release, Suciwati is also suing Garuda for negligence resulting in the death of her husband.

According to Hamid, Munir's case is a major test of Indonesia's human rights record in the post-Suharto period (from 1998 onwards). Hamid suggested that Australia's decision to conclude a security agreement with Indonesia is a signal that Australia has accepted Indonesia's promises that the Indonesian military today is a reformed institution. "However this is not the case", he told Green Left Weekly. "There are many issues that need to be tackled when it comes to the military, the intelligence agencies and the bureaucracy."

Hamid argued that civilian supremacy over the military is still in doubt and the all-pervasive territorial command structure and military involvement in business continue. He said while many new human rights laws and regulations have been introduced in the post-Suharto period, many human rights abuses such as the murder of West Papuan leader Theys Eluay, rumoured to have involved the Kopassus special forces, have taken place in the same period. Military officers who have appeared before the Ad Hoc Human Rights Court on various cases, including the 1999 violence in East Timor and the 1984 Tanjung Priok case involving the shootings of hundreds of Muslims, have all been exonerated.

Acehnese volunteer submits review of hate sowing articles

Tempo Interactive - March 21, 2007

Rini Kustiani, Jakarta – A volunteer who has been working in Aceh since the tsunami disaster submitted a judicial review of the hate sowing articles in the Criminal Code to the Constitutional Court on Wednesday March 21.

R. Panji Uto, a volunteer working as a doctor in Aceh, submitted a request to review Criminal Code Articles 154, 155, 160 on sowing hatred, Article 160 on incitement, Articles 161, 207, 208 on insulting the government and Article 107 on acts of rebellion.

"These article have undermined by constitutional rights", said Panji who also holds the post of the Inter-Barrack Communication Forum (FORAK). As a result of the application of these articles, the Aceh High Court sentenced Panji to three months jail on December 18 last year.

Panji was charged with issuing a statement of hostility, hatred or insult against the Indonesian government during a demonstration at the offices of the Aceh Reconstruction and Rehabilitation Agency on September 11, 2006.

During a panel hearing tasked with improving the request chaired by constitutional judge Harjono, the panel accepted seven pieces of evidence submitted by the plaintiff and his attorney. "The results of the panel hearing will be taken to a plenary hearing", said Harjono accompanied by judges Natabaya and I Dewa Gede Palguna.

[Translated by James Balowski.]

Legislature approves harsh bill to combat human trafficking

Jakarta Post - March 21, 2007

Ridwan Max Sijabat, Jakarta – The House of Representatives has passed a long-awaited bill on human trafficking carrying a maximum 15-year jail sentence and/or a maximum fine of Rp 5 billion for involvement in the human trade.

The bill requires traffickers to pay compensation for victims' material and immaterial losses suffer.

All 10 factions at the legislature registered their full support for the bill in a plenary session presided over by House Deputy Speaker Muhaimin Iskandar on Tuesday.

Legislators emphasized that the bill criminalized all kinds of human trafficking at home and overseas.

The bill stipulates ordinary people, public officials, corporations and syndicates that recruit and transfer people by force, abduction or deceit in order to exploit them face three to 15 years imprisonment and/or fines of Rp 120 million to Rp 600 million.

It also threatens similar sanctions on anyone bringing foreigners here for exploitation or adopting children for a similar purpose.

The bill raises the punishment by one-third for crimes that cause victims severe injuries, death, pregnancy or loss of their reproductive functions. In cases of the victim's death, the fine ranges from Rp 200 million to Rp 5 billion.

Latifah Iskandar, chairwoman of the House special committee that prepared the bill, said it would protect millions of women and children from abuse.

"With the bill's endorsement, we are sending a very important message to those involved in human trafficking to halt the exploitation of vulnerable groups such as women, children and the poor," she said after the plenary session.

Latifah, a legislator from the National Mandate Party (PAN), called on the nation to crack down on all forms of trafficking. "Law enforcers must be consistent in eliminating these rife practices which are inherently forms of human exploitation," she said.

"With such an emphasis, there will no more excuses and reasons for agents involved in the human trade to hide behind official licenses to employ migrant workers overseas or send cultural delegations overseas, marriages of couples of different citizenships and adoption of children."

The labor export program has frequently been manipulated by unauthorized labor exporters to traffic women and children as sexual workers in other countries. "The government-sponsored labor export program, which sends around 450,000 migrant workers annually, is quite prone to human trafficking," said Latifah.

The country's largest Muslim organization, Nahdlatul Ulama, recently found that loan sharks in East Java were forcing people to work under unfair conditions to pay off their families' debts.

Minister for Women's Empowerment Meutia Hatta hailed the bill, saying it gave legal protection to victims.

"Besides threatening harsh sanctions, the bill requires anyone, corporations, public officials and syndicates involved in human trafficking, to pay compensation for material and immaterial losses suffered by victims," she said.

 War on terror

Indonesia arrests suspected Poso bomber

Agence France Presse - March 22, 2007

Palu – An anti-terror squad in Indonesia has arrested a suspected Muslim militant accused of involvement in a deadly attack on Christians, police said Thursday.

The man arrested was Mujahid, also known as Brekele, senior police official Badrodin Haiti told AFP, referring to a militant wanted in connection with bomb blasts that ripped through a Christian marketplace in 2005, killing 22 people.

The blasts occurred in Sulawesi island's religiously divided district of Poso, where Muslims and Christians live in roughly equal numbers and have clashed often.

Mujahid, who Haiti said was "tailed... and arrested in his hideout," was one of 12 people on a Sulawesi police list of suspects wanted for violence against Christians and other non- Muslims. He is also accused of involvement in the theft of 500 million rupiah (55,000 dollars) from a government vehicle in 2004.

Haiti said Mujahid had been sent to the national police headquarters in the capital, Jakarta, after his arrest on Indonesia's main island of Java, but he did not say when the suspect was captured.

The remaining 11 people on Sulawesi police's wanted list should surrender and would be treated well, Haiti said, adding at least five were thought to be in or around Poso.

The district has seen sporadic unrest since violence between Muslims and Christians claimed about 1,000 lives in 2000 and 2001.

On Wednesday, three Islamic militants were jailed for terms of between 14 and 20 years over the beheading of three Christian schoolgirls in Poso, a crime that drew international condemnation.

Islamic militants jailed for beheadings

Associated Press - March 22, 2007

Irwan Firdaus, Jakarta – Three Islamic militants were found guilty Wednesday of decapitating three Christian schoolgirls in Indonesia and dumping their bloodied heads in nearby villages, judges said. They were sentenced to between 14 and 20 years.

The alleged members of the al Qaida-linked Jemaah Islamiyah network left a handwritten note close to the bodies of the teenagers, vowing more killings to avenge the deaths of Muslims in earlier sectarian violence on Sulawesi island.

"Wanted – 100 more heads," said Judge Lilik Mulyadi, reciting the letter's text. "Blood must be paid with blood, lives with lives, heads with heads."

Hasanuddin, 34, who goes by a single name, was sentenced to 20 years for masterminding the 2005 attack, and co-conspirators Lilik Purnomo, 28, and Irwanto Irano, 29, each got 14 years, he said.

Indonesia, the world's most populous Muslim nation, has been hit by a string of terrorist attacks in recent years targeting local Christians and nightclubs, restaurants and foreign embassies.

But the grisly nature of the beheadings, which occurred as the girls were cutting through a cocoa plantation on their way to school, gave fresh impetus to the country's war on terrorism and was followed by scores of arrests.

The three militants had faced a maximum penalty of death by firing squad, but judges ruled that they deserved some leniency for cooperating with authorities, confessing and showing remorse.

Relatives of the three girls – aged between 15 and 16 – disagreed, saying the killers deserved nothing short of life behind bars.

"Twenty years is nothing compared to the sadness and suffering experienced by the victims and their families," said Hernius Morangki, who lost his daughter, Teresia. "This verdict should bring shame to Indonesia."

The trial at the Central Jakarta District Court lasted nearly five months.

A fourth girl survived the attack with a slash to her neck and was key to identifying the three defendants.

Siregar told the Central Jakarta District Court that Hasanuddin ordered the slayings and helped dumped the girls' heads in three Christian-dominated villages. Purnomo and Irano were found guilty of "ambushing and beheading" the teens, he said.

It was not immediately clear if the three convicts would appeal. More than 90 percent of Indonesia's 220 million people are Muslims, but Central Sulawesi province – the scene of religious clashes that left at least 1,000 people dead from 1998 to 2002 – has a roughly equal number of Muslims and Christians.

A peace agreement ended the worst of the violence, but tensions flared after the 2005 beheadings and again in September 2006, after the execution of three Roman Catholic militants convicted of leading a 2000 attack on an Islamic school that killed up to 70 people.

In January, 15 alleged Islamic militants were killed in a gunbattle in Sulawesi. Several others were arrested, including three others who have confessed to taking part in the beheadings but have yet to be brought to trial.

Jemaah Islamiah militant warns of more attacks

Associated Press - March 18, 2007

An alleged leader of the Jemaah Islamiah militant group said bombings in Indonesia had hurt Islam's cause there, but warned of more attacks by small terrorist groups working independently and influenced by internet teachings.

In an interview with the Associated Press on Friday, Abu Rusdan said the terrorist campaign had divided the militant movement in the world's most populous Muslim nation, and pointed to a possible opening for authorities trying to further isolate extremists.

Rusdan is an Afghan-trained militant believed by police and the United States to be a key leader in JI, the shadowy South-East Asian network that spawned many of the region's terrorists and is believed to have received funds and direction from al-Qaeda.

In the interview in his large family house in Kudus, a town on Indonesia's main island of Java, Rusdan declined to condemn the militants responsible for the 2002 Bali nightclub bombings and other attacks, saying only that their actions "were counterproductive".

More than 200 people died in the Bali bombings, including 88 Australians.

"We cannot call what they did an act of evil, let alone terrorism," he said. "But we must see the objective facts: Those actions did not bring positive results in efforts to spread the faith in Indonesia. We need to tell them to think again."

The Bali bombings thrust the mostly moderate, secular country onto the front lines of the war on terrorism. Three other suicide attacks on Western targets in the country have since killed more than 40 other people.

Rusdan, 46, said he had no role in terrorist activities, but he danced around questions over his involvement in JI.

Police and analysts say he took over as head of the group's "mainstream" faction in 2002 – after the arrest of former leader Abu Bakar Bashir – but likely had no direct knowledge of the bombings carried out.

Rusdan was arrested in 2003 and sentenced to three-and-a-half years in jail for hiding one of the militants convicted in the Bali blasts, but he was released in late 2005. Indonesia has not made membership of JI a criminal offence.

Rusdan said more attacks, carried out by independent groups, were likely. "No one can control groups who want to do those kinds of actions," he said.

"Many people are not satisfied about the conditions in Indonesia. They can do many things under the influence of teachings on the internet or books that are circulating widely."

Rusdan left for Afghanistan in 1985, but he declined to talk about his activities there. He then lived in Malaysia, where he was close to some of South-East Asia's most notorious terrorists, including Hambali, who is now in US custody.

In 2005, the US government listed Rusdan as a terrorist leader and ordered banks to block any financial assets he may have there.

 Politics/political parties

Young leaders demand better representation for youths

Jakarta Post - March 23, 2007

Jakarta – Young politicians are demanding a greater role for themselves in political parties to better represent their younger constituents.

The calls for affirmative action have not met with approval, however, with politicians and researchers saying such representation is unprecedented.

"I don't agree with the idea of allocating more seats to young people in the legislature because there is no direct relationship between the political system and young people," House of Representatives member Ferry Mursyidan Baldan said Thursday.

"If every group were given a quota in the legislature, it would be full of appointees, not elected representatives. There would be no competition."

Ferry of Golkar Party said he agreed that young people should be given more chances in political parties, but not through a quota in the legislature.

Indra Jaya Piliang, a researcher from the Centre for Strategic and International Studies (CSIS), also opposes a quota for young people in the legislature.

"That would not be educational at all. I agree with giving more seats to women to maintain a proportional electoral system. But I don't agree with applying such a quota for young people. The nation's challenges loom larger and larger every day and we need young people who have enough political experience to lead this nation.

"Even for political regeneration, it is not fair to use affirmative action," Indra told reporters on the sidelines of a discussion about the eligibility of young candidates in the upcoming general elections.

The event was held by Barisan Muda Kosgoro 1957, the youth wing of the Golkar Party, at the Jakarta Media Center in Central Jakarta.

Indra said that, rather than just giving more seats to young people in the legislature, political parties needed to provide more access for young people to participate in the parties.

Many parties with dominant older-generation leaders, such as the Golkar Party, should begin the process of reform to avoid an exodus of younger members, Indra said.

"The parties rarely target the iPod and Friendster generation and there might be layers of distance between them."

A poll by the Democracy and Development Survey Institute in January 2007 showed that 50.29 percent of young voters would vote for a new party in any election.

"Many young people would choose to elect a new party because they are probably fed up with the established parties, or they know nothing about them," Indra told The Jakarta Post.

The survey also showed that the Democratic Party has the approval of 5.85 percent of young voters, the Democratic Party of Struggle has 3.5 percent, the Golkar Party has 2.34 percent, the National Awakening Party has 2.34 percent and the Prosperous Justice Party has 1.75 percent.

Syamsul Bahri, general secretary of Kosgoro, said that in the nation's history, young people had never had proportional representation in the legislature, adding that despite this their role was critical.

House endorses elections overhaul

Jakarta Post - March 21, 2007

Ridwan Max Sijabat, Jakarta – The House of Representatives has approved a bill to overhaul the elections system, requiring the government to establish a new general elections commission and an independent supervisory board.

The government will have two months to nominate 21 candidates for seven spots on the General Elections Commission (KPU), and to establish the General Elections Supervisory Board (Bawaslu).

House Deputy Speaker Muhaimin Iskandar pounded the hammer to endorse the bill after all 10 factions at the House presented their support, although not more than 50 legislators were attending the plenary meeting. Justice and Human Rights Affairs Minister Hamid Awaluddin represented the government.

Saifullah Ma'shum, chairman of the House special committee that prepared the bill, said KPU members should be sworn in by August. The KPU will then have the task of selecting five new KPU chapter members each at the province, regency and municipal level for the so-called KPUDs. Unlike the current KPU, the new KPU will supervise KPUDs and their secretariats.

"The KPU has full authority to make necessary decisions and policies in carrying out the task of organizing legislative elections, presidential and vice presidential elections, regional representative elections and local elections," said Saifullah.

"It has its own authority to supervise all KPUDs and the secretariat general and to propose its own budget in doing its tasks."

Saifullah said one of the most important changes was that KPU members would focus only on the decision- and policy-making process, while the procurement of elections materials would be handled by the secretariat general.

The new election committee will be monitored by Bawaslu and overseen by an internal supervisory team to ensure that all KPU members and staff obey the law.

Ferry Mursyidan Baldan, deputy chairman of the special committee, said the bill was designed not only to ensure a fair general election in 2009 but also to end corruption at the KPU.

"Power abuse and graft cases which involved several members of the current KPU and its senior officials have been taken into consideration in drafting the bill," he said.

The bill gives full authority to KPU's plenary session to suspend any members and staff abusing their power and discharge them if they are found guilty by the court.

It also tasks the new election commission to update information on eligible voters and determine eligible parties in legislative elections. They will also determine the eligibility of candidates in local, regional and national elections.

In updating its data, KPU is required to cooperate with the Home Ministry, which is conducting a population census.

The bill also tasks KPU and Bawaslu to adopt a joint code of ethics and set up an ad hoc honorary council to ensure all elections are held on time and in accordance with the law. The council will also ensure that violations committed by KPU members and staff or electoral candidates are handled properly.

Party nomination process blasted as undemocratic

Jakarta Post - March 21, 2007

Prodita Sabarini, Jakarta – Political parties are revealing undemocratic tendencies in choosing their candidates for governor of Jakarta, with elites ending up having the final say, an analyst says.

Center for Electoral Reform chairman Hadar Navis Gumay told The Jakarta Post on Tuesday that political parties are not listening to their constituents during the nominating process.

"It's not democratic, because their decisions are not based on the aspirations of the grassroots," Hadar said. "This is an illustration of the poor state of democracy within political parties in Indonesia."

One possible example is the recent decision by the Indonesian Democratic Party of Struggle (PDI-P) to back current deputy governor Fauzi Bowo in the August election. Hours later a giant coalition of 17 parties, including Golkar and the Democrat Party (PD), also threw its support to Foke, as Fauzi is popularly known.

PDI-P's decision to support Foke came as a surprise, since he had never been mentioned as a possible PDI-P nominee. Golkar, PDI-P's rival, had previously announced that it was supporting Foke, so many observers assumed PDI-P would not choose the same candidate.

PDI-P had been the first party to give independent candidates a chance to register. Economist Faisal Basri, legislator Sarwono Kusumaatmaja, retired Army general Bibit Waluyo and former transportation minister Agum Gumelar had sought support from the party. Their hopes were dashed by the announcement.

The party's chapter members have protested the nomination, saying Fauzi did not approach party cadres in the city.

Irwan Gading, an official at the North Jakarta PDI-P chapter, said he was disappointed because the decision ignored the voice of the grassroots members. The chapter will write a letter to the party's chairwoman, former president Megawati Soekarnoputri,"to ask for an explanation of the decision", he said.

Prakoso, also from the North Jakarta chapter, said the decision was a political game played by the party elite, and most members of PDI-P chapters rejected the decision.

"Our party will not gain any profit with the coalition supporting Fauzi Bowo, this is only a political ploy played by the elite," he said as quoted by news portal Tempointeraktif.com.

The Democrat Party's nomination of Foke was also decided by officials from the party's central office rather than its chapters.

Ferial Sofyan, the party's Jakarta chapter head, said the chapters and officials in the central office together discussed who would be nominated. However, most of the members of a Democrat Party team formed to finalize the decision were officials from the central office.

Hadar said this distanced political parties from the people, which would result in voters becoming apathetic toward the election because they do not feel that their aspirations are represented by the parties.

Hadar said the parties hold the tickets to enter the race, and are selling out to the highest bidders. "Political parties are becoming pragmatic, supporting the candidate who can give them the most money," he said.

Political analyst Komaruddin Hidayat, who is also the rector of State Islamic University, said political parties would always choose a candidate with an eye to funding as well as the candidate's closeness to political and economic power. "Usually the ones who know about these things in a party are the top elite executives," he said.

Yudhoyono denies meddling in political bill

Jakarta Post - March 17, 2007

M. Taufiqurrahman and Ridwan Max Sijabat, Jakarta – The President on Friday denied backing a clause in a new political bill requiring presidential candidates have at least a bachelor's degree in an attempt to thwart his rivals in the 2009 presidential election.

Cabinet Secretary Sudi Silalahi said President Susilo Bambang Yudhoyono did not propose the new educational requirement, which would replace the current law requiring only that presidential candidates be at least high school graduates.

"The President adheres to Law No. 23/2003 on presidential elections, which stipulates that candidates are required to be at least high school graduates," Sudi said during a press briefing on the issue.

He said the President in no way was attempting to block any parties from contesting the presidential election.

Sudi emphasized the bachelor's degree requirement in the new political bill was never presented to the President by the Home Ministry, which drafted the bill.

Several political parties have objected to the educational requirement in the bill, accusing Yudhoyono of attempting to shut out potential rivals in the 2009 election.

If the bill was passed in its current form it could affect two potential candidates seen as posing possible threats to Yudhoyono in 2009. They are former president Megawati Soekarnoputri, chairwoman of the Indonesian Democratic Party of Struggle (PDI- P), who dropped out of college, and another former president, Abdurrahman "Gus Dur" Wahid, who did not complete his college education in the Middle East.

Some critics have slammed the bill as discriminatory, pointing out that only about 10 percent of the country's estimated 220 million citizens are college graduates. They say it also ignores the fact that some of the country's former leaders did not have college degree.

Former president Soeharto did not have a bachelor's degree, only receiving military education during the Japanese occupation. Some critics have said that even if Yudhoyono was not directly involved in the new educational requirement, it represents a political move by the Home Ministry to boost the President's reelection chances.

Responding to the controversy, Vice President Jusuf Kalla said the political bill must refer to the Constitution, which is silent on educational requirements for state leaders.

"The Constitution only states that the primary requirement is having a good education. College or high school diploma, it's no big deal. But if the current law states that it's high school then it has to be a high school graduate," Kalla told reporters.

Joining the debate, Megawati said no artificial restraints should be placed on candidates, and that it should be left entirely up to voters to decide on their leaders.

"The answer is simple. Leave it to the people to decide who they will vote for. That's the good thing about having a direct presidential election," Megawati was quoted as saying by Detik.com newsportal.

Megawati's husband, Taufik Kiemas, who is also a central board member with the PDI-P, said that rather than working to bolster his chances for reelection, Yudhoyono should focus on the business of the nation.

"Take action and do it now," Taufik, also a PDI-P legislator, told reporters at the House of Representatives.

 War on corruption

Graft verdict sets bad precedent: Activists

Jakarta Post - March 23, 2007

Ridwan Max Sijabat, Jakarta – Anti-corruption activists and experts have said a decision to acquit former councilors from graft charges in a case review will set a bad precedent in handling similar cases in the future.

Spokesman for the Coalition of Anti-corruption Non-Governmental Organizations, Adnan Topan Husodo, said in a press conference Thursday the decision indicated the Supreme Court and the Attorney General's Office were not committed to the fight against corruption.

"The Supreme Court's decision will give chances to many other public officials who are facing corruption charges under the already-annulled 2000 government regulation on regions' financial composition," he said.

The 10 former council members were charged with misusing Rp 1.3 billion (US$144,000) from the Cirebon Municipal Legislative Council in 2000.

The Cirebon District Court acquitted the former councilors of charges in 2004 after they were found not guilty of embezzling the budget funds. Prosecutors then appealed to the Supreme Court, which later dealt the councilors prison sentences of between two and four years.

The 10, however, requested the case be reopened by the Supreme Court, which then decided they could not be brought to justice.

The Supreme Court held that the regulation under which the 10 were charged had already been annulled and that the wrongdoings committed by the former councilors were not specified in the 1999 Anti-Corruption Law.

The review was conducted by a panel of justices presided over by Justice Iskandar Kamil.

Adnan said Chief Justice Bagir Manan and Attorney General Abdurrahman Saleh had deceived the public because they pledged to ignore the annulment of the government regulation and settle all corruption cases, which occurred before the regulation was annulled.

Saldi Isra, a constitutional law expert from the Andalas University in Padang, West Sumatra, said the Supreme Court's decision was a setback in the national war on corruption.

"Many corruptors facing charges in other regions will be released and the Supreme Court's decision will indirectly encourage public officials to abuse their power," he said.

Deny Indrayana, a political analyst at Gadjah Mada University in Yogyakarta, said he regretted the Supreme Court's decision, adding that corruptors were fighting back and that the judicial system still remained corrupt.

Tons of rice vanish from Bulog warehouse

Jakarta Post - March 22, 2007

Agus Maryono and Andi Hajramurni, Purwokerto/Makassar – Twenty tons of rice has vanished from a warehouse of the state logistics agency Bulog, raising suspicion it was sold illegally.

The disappearance of the rice from the warehouse in Banyumas, Central Java, comes at the same time as several provinces report their rice supply has reached critically low levels.

The missing rice was first brought to light by the warehouse's chief Bahram. He said while checking warehouse stocks on Tuesday night, he found 1,000 20kg rice sacks were missing. The sacks were intended for the government's rice-for-the-poor program.

Imam Syafei, head of Bulog's office in Banyumas, which oversees four regencies – Banyumas, Banjarnegara, Cilacap and Purbalingga – confirmed Wednesday the rice was missing. "The missing rice was worth around Rp 80 million (US$8,695). We don't know who stole it," he said.

He said the missing rice was set to be distributed to the poor next month."We can still distribute rice for the program in April. This isn't a problem since we can get rice from another warehouse if we need to," Imam said.

He said he assumed the rice was stolen some time over the long weekend.

Imam said the thieves must have used trucks to steal the rice. Since a truck could carry around 7 tons, whoever stole the rice had to have loaded it into several trucks, he said.

He said the apparent theft had been reported to Banyumas Police."Let the police investigate the case. There is someone who we suspect is involved but it's not my place to investigate. If an official was involved, he will be charged and punished," Imam said.

Banyumas Police chief Adj. Sr. Comr. Suherman said Wednesday the police questioned 12 witnesses, including the warehouse's chief and security guards.

A local trader, Tofik, was skeptical of claims the rice was stolen. "It can't be true. It's impossible for an office like Bulog to have no security guards. I think the rice is being sold for a cheaper price," the trader said.

Meanwhile, Bulog has been unable to replenish its rice supply for shortage-struck areas such as South Sulawesi due to the high market price of unhusked rice.

After meeting with a protest group of around 100 poor housewives, the head of Bulog's office in South and West Sulawesi, Abdul Karim, told journalists his office had only 20,000 tons of rice, enough for three months. "Our rice supply is critical at the moment," he said.

He acknowledged some areas in South Sulawesi have entered harvest season. But he said Bulog could not buy the unhusked rice, which was selling for Rp 2,400 per kilogram, since this price was much higher than the Rp 1,730 per kilogram budgeted for the agency.

"As long as unhusked rice is still priced above Rp 1,730 per kilogram, and if the government doesn't make a new pricing policy, we can't replenish our rice supply (that way)," Abdul said. He said his office set itself the target this year of providing 232,800 tons of rice to poor residents in the two provinces.

However, he said people should not worry since a shipment of imported Thai rice reached Indonesia earlier this month. Around 66,000 tons of the rice reached South Sulawesi on Tuesday.

"Earlier, we said we didn't sell imported rice in South Sulawesi, which is a rice producing province. But if the supply isn't enough, we have to distribute imported rice. We can't let people starve," he said, adding that the imported rice will only be distributed to the poor, and not sold on the market.

 Jakarta/urban life

Water source of disease in slums: Official

Jakarta Post - March 21, 2007

Adianto P. Simamora, Jakarta – The poor quality of the city's water is making children more vulnerable to diseases and deficiencies, particularly those living in slum neighborhoods, a health official said Tuesday.

I Nyoman Kandun, the director general of communicable disease prevention at the Health Ministry, said contact with contaminated water could cause diarrhea, polio, hepatitis or cholera, whereas bad housing and poor environmental conditions were linked with dengue and bird flu.

"(The diseases) have been very common lately. Most of the diseases we currently handle are related to environmental conditions, such as the poor quality of drinking water and the sanitation system," Kandun told a seminar on Raw water scarcity: Challenges to supply drinking water in urban areas, which was organized by the Indonesian Communication Forum on Drinking Water Quality Management (Forkammi).

"About 19 percent of the child deaths in the country are caused by waterborne diarrheal diseases," he added.

He said improving public access to clean water by 10 percent would reduce the annual number of child deaths by 4 percent, whereas raising slum dwellers' incomes by 10 percent would lower the number by only 3 percent.

In addition, he said, encouraging good habits, such as careful hand-washing and avoiding sharing food, cups and utensils, could reduce children's exposure to illness by 65 percent.

Jakarta, which is home to more than 10 million people, has long been facing problems because its piped water – though clean- looking – is not drinkable and not all residents have access to piped water in their homes.

The Jakarta Environmental Management Agency (BPLHD) estimates the city's water needs at 547.5 million cubic meters per year. Jakarta's two tap water operators, however, produce only 295 million cubic meters of water or enough to meet 54 percent of the clean water demand.

Residents who lack access to piped water are forced to rely on groundwater, pumping about 251.8 million cubic meters a year in total. This is far higher than the groundwater recharge rate, which is estimated at 186.2 million cubic meters a year.

Most of Jakarta's rainwater runs directly into rivers. As a result, the city is hit by floods in the rainy season and water shortages in the dry.

In low-lying North Jakarta, groundwater depletion has caused serious land subsidence, making the area more vulnerable to flooding and allowing sea water from the Java Sea to seep into the coastal aquifers.

Agency chairman Budirama Natakusamah told the seminar – which was held in conjunction with World Water Day on March 22 – that most of the groundwater in the city was contaminated with unhealthy bacteria.

Data from the agency shows that about 80 percent of the groundwater in wells with depths of 10-20 meters is contaminated with pathogenic disease-causing bacteria, such as E-coli. This is due to the absence of a municipal sewage system in the city.

A study on urban drainage and wastewater disposal in Jakarta showed that middle- to high-income households produce 38 percent and 116 percent more wastewater than low-income households respectively. Jakarta only just one water treatment plant in Setiabudi, South Jakarta, which can only process up to 3 percent of the city's wastewater.

Budirama said his office was also facing problems in monitoring the quality of river water, which is the only source of raw water for Jakarta's tap water operators.

Data from the administration shows that 78 percent of the city's rivers were deemed polluted in 2006, up from 77 percent in 2005.

Less is not more in Jakarta gubernatorial race: Analysts

Jakarta Post - March 17, 2007

Adisti Sukma Sawitri and Ridwan Max Sijabat, Jakarta – The decision by the majority of political parties in Jakarta to support current Deputy Governor Fauzi Bowo in August's gubernatorial election is not without consequences, say analysts.

The Joint Coalition of 17 parties announced Thursday that it was backing Fauzi, or Foke, a nickname the deputy governor picked up during his university years in Germany.

This announcement could result in a head-to-head battle between Fauzi and former National Police deputy chief Comr. Gen. (ret) Adang Daradjatun, who is backed by the Prosperous Justice Party (PKS).

While some people may believe it is better to have just two candidates in the gubernatorial election, Center for Electoral Reform (Cetro) executive director Hadar Navis Gumay said having too few candidates could result in low voter turnout because of the lack of options.

"People might feel reluctant to lend their support since both candidates were little known before massive public relations campaigns over the past year," he said.

He said election hype would only reverberate among political parties and their most fervent supporters, as well as in the media, if their were only two candidates in the race.

Both Fauzi and Adang have appeared frequently in public advertisements and in the media over the past year, but never introduced themselves as governor hopefuls.

Another political analyst and the rector of Jakarta's State Islamic University, Komaruddin Hidayat, said the Joint Coalition backing Fauzi was set up to counter the extensive political network of the PKS in Jakarta.

"Those parties in the coalition don't feel so happy about it, but they think they have no other choice if they want to win the election," he said.

Komaruddin also warned that the decision by political parties to support candidates with little grassroots support would create a "pseudo-government" that would act only on the needs of the parties instead of the voters.

There are now only six parties in the capital that have yet to name their candidates for the election, including the National Mandate Party (PAN) and the National Awakening Party (PKB).

Another governor hopeful, legislator Sarwono Kusumaatmadja, who had been hoping to receive the support of the Indonesian Democratic Party of Struggle (PDI-P) before it joined the Joint Coalition, said he would explore the possibility of forming a coalition from these six remaining parties.

"We are still building a platform for a new coalition," he said. The chairman of the PDI-P advisory council, Taufik Kiemas, who is also the husband of party chairwoman Megawati Soekarnoputri, said the PDI-P decided to nominate Fauzi because of his experience in dealing with Jakarta's two chronic problems of flooding and traffic.

"The party has received assurances from the candidate (Fauzi) and an explanation from him on how as governor he will solve these chronic problems," he said, declining to share the explanation.

However, PDI-P secretary-general Pramono Anung said the party was backing Fauzi because he was seen as the candidate with the best chance of winning the election.

Since 2005, when direct gubernatorial elections first started being held in the country, the PDI-P has backed the winning candidate in 8 of 15 races. "We have great expectations for winning the election in Jakarta," he said.

 Environment

More concrete balls set to be dropped in mudflow crater

Jakarta Post - March 22, 2007

Indra Harsaputra, Sidoarjo – The National Mudflow Mitigation Team is preparing to drop 500 additional chains of concrete balls into the mouth of the mud volcano in Sidoarjo, East Java, following its successful insertion of 374 chains earlier this month.

"We're still waiting for repairs on the equipment. Even though we are criticized, we continue working 24 hours a day. From dawn to sunset we work in the field and at night we analyze all aspects of the mudflow," Bagus Endar Bachtiar Nurhandoko, head of the Insertion Monitoring and Evaluation Supervision team from the Bandung Technology of Institute, said Wednesday.

Bagus added that he was monitoring the flow rate from the mud volcano, which has been dropping. Twelve other team members from ITB, including doctoral students, are involved in analyzing the data.

The insertion team, Bagus said, was proceeding carefully since this is the first time this technique has been tried anywhere in the world. The team settled on this method after rejecting the more common approach of drilling relief wells.

"We had complete data and thorough assessments before we started working. We do not want to talk about impossibility. You can see the results; there have been no new discharge points or explosions as feared by oil drilling experts and observers," he said.

Basuki Hadimulyono, head of the mitigation team, said his team had not been able to measure the decline in the discharge because it did not have the equipment to do so.

"The indication of success of the insertion of the concrete balls can be seen from the rising content of H2S (hydrogen sulfide) gas, as it indicates lower pressure from below. In line with the falling pressure, more concrete balls will be inserted," he said.

Basuki explained that the first stage of the concrete ball insertion cost about Rp 3 billion (US$315,789), while the second stage would total Rp 500 million. The additional funds for the second stage would be used mainly to manufacture the concrete balls.

Basuki said the national team also needed Rp 126 billion to build a 1.5-kilometer canal to channel mud from the disaster site into the Porong River.

"We feel securing the additional funds of Rp 500 million for the concrete balls and Rp 126 billion for the permanent canal is more important than renovating infrastructure damaged by the hot mudflow," he said.

However, Amien Widodo, head of the disaster study center at the 10 November Institute of Technology, cautioned against elation, saying the concrete balls could still cause explosions or the formation of new mud volcanoes.

Amien said he was concerned an explosion could take place within the next few days like the one that occurred on Aug. 25 last year. He said at that time, the mud discharge stopped for several minutes, just as it did Monday when it halted for 35 minutes. Then thick smoke billowed 50 meters into the air, followed by an explosion.

Meanwhile, after staging a series of rallies without getting results, refugees from the flooded Tanggulangin Sejahtera housing complex collected blood fingerprints to symbolize their struggle to be compensated for their property. "We are still patient. But don't blame us if we use anarchic means to press our demands," said one of the victims.

South Sumatra records 30 pollution cases

Jakarta Post - March 17, 2007

Palembang – More than 30 cases of environmental destruction, mostly in the form of pollution created by the oil and gas industries, were recorded over the past three years across South Sumatra.

The data was revealed by the director of the South Sumatran chapter of the Indonesian Forum for the Environment (Walhi), Sri Lestari Kadariah, on Friday, who said the cases involved oil and gas pipe leaks, pipe explosions and oil well gushes. Three incidents have already occurred in the first three months of this year.

"The latest incident was a leak from state oil company Pertamina's processing unit tank, which polluted Rebo and Komering rivers on March 8, which so far has not been restored," Sri said.

She said Walhi investigated the case and found that Pertamina could only clean the oil sludge floating on the rivers by hiring villagers to conduct the manual labor.

The provincial Environmental Impact Control Agency sent a warning letter to Pertamina calling for the company to immediately remedy the situation and report the matter to the governor through the agency.

 Health & education

Teachers, historians at loggerheads on textbook ban

Jakarta Post - March 21, 2007

Anissa S. Febrina, Jakarta – Senior history teacher Retno Indarti has a solid reason for supporting the recent ban on history textbooks that fail to mention the Indonesian Communist Party (PKI) when discussing the September 30 (G30S) movement that lead to the rise of Soeharto.

"I was there and was old enough, I know that the PKI was definitely involved," Retno said, arguing with other participants during a discussion on the banned books over the weekend.

"The PKI was also involved in the 1948 coup d'etat. My family fell victim then, my uncle was killed, they took his head off and displayed it on his fence," said the teacher at state high school SMUN 66 in South Jakarta, insisting that her students must know about a historical event that she witnessed.

Scholars and human rights activists filed a petition Tuesday with the Attorney General's Office to revoke the book ban. The PKI has long been associated with the bloody putsch in 1965 that led to the fall of Sukarno and the rise of Soeharto in 1966.

Earlier this month, the Attorney General's Office banned dozens of school textbooks that left out the PKI's involvement in the 1948 coup d'etat, as well as the events of 1965.

"The books not only failed to state the facts but challenged some 'accepted truths', which could create public disorder," the Attorney General's Office announced on March 5.

Another history teacher at the debate, Warsono, said he believed that the PKI was the only group behind the 1965 bloodbath.

"It is written so in the official history book published by the State Secretary," he said. "Others can have different opinions and analyses, but we have to stand by what is officially said by the government."

Public discussion of the September 30 movement is still affected by the more than 30 years that dictator Soeharto held power, during which public discussion of sensitive topics such as the coup was frowned upon.

Several academic groups have said that the PKI was not the sole power behind the 1965 coup d'etat and that Soeharto might have been involved. Even after the fall of Soeharto, however, the government has continued to disagree, placing all blame on the PKI.

The 2004 junior and senior high school curriculum tried to explain more comprehensively the events surrounding the events of Sept. 30, 1965, by letting students discuss the different analyses.

The banned books were written based on the 2004 curriculum, which was later revised by the Education Ministry.

"We have to admit that there is a gap between historians and history teachers," said Ratna Hapsari, head of the Jakarta History Teachers Association.

"While scholars and college students have a wide access to different sources on Indonesian history, including those from abroad, teachers often rely on textbooks and their own experiences."

Ratna has established a close relationship with several historians, who provide her with a wide range of sources outside of the official textbooks.

"We are trying to bridge the gap now by working closely with the Indonesian History Society. Teachers must also be updated before they come into classrooms," Ratna said.

Academics, activists join forces to defy ban

Jakarta Post - March 20, 2007

Anissa S. Febrina, Jakarta – Teachers, scholars, activists and members of the public are joining hands to file a petition and a legal action against a recent ban issued by the Attorney General's Office on a number of history textbooks.

The AGO's ruling is philosophically unconstitutional and technically faulty, scholars and activists say.

"The state is supposed to educate the nation as stipulated in the Constitution. But instead it insists on only mentioning a historical fact which is still in dispute," Indonesian History Society representative Asvi Warman Adam said last week.

Earlier this month, the AGO banned dozens of school books that do not make mention of the Indonesian Communist Party's (PKI) 1948 coup d'etat, as well as those missing the letters PKI after G30S (the September 30th movement).

The books not only failed to state the facts but challenged some "accepted truths", which could create public disorder, the AGO announced.

Despite scholars arguing the PKI was not the sole mastermind of the 1965 coup d'etat, which was followed by mass killings, the state has continued to insist otherwise, even after the fall of Soeharto.

A 2004 junior high school and high school curriculum tried to explain more comprehensively the events surrounding Sept. 30, 1965, by letting students discuss the different analyses. The banned books were written based on the 2004 curriculum, which was later revised by the National Education Ministry.

"As teachers, we are supposed to not only reveal historical facts, but also to explain the larger context and meaning of an event like G30S," said Ratna Hapsari, the head of Jakarta's history teachers association.

Besides being unconstitutional, the ruling was also technically wrong as it also banned a number of textbooks that were not supposed to contain the information the AGO said was missing, she said.

"The book for seventh graders by Tugiyono, for example, does not cover the PKI coup d'etat because that chapter is for ninth graders," Asvi said. "Seventh graders only learn the pre-modern history of kingdoms in the archipelago."

But, despite technicalities, the root of the problem lies in the fact the state still holds the power to censor information and historical facts, Indonesian Legal Aid and Human Rights Association (PBHI) head Johnson Panjaitan said.

The PBHI plans to take legal action against the ban. "If the nation has truly been reformed, there should no longer be institutions capable of censoring public information," Johnson said.

The AGO has the authority to monitor the circulation of written materials and has banned a number of books "deemed capable of disrupting political stability" since the Soeharto era.

After the fall of Soeharto in 1998, alternative information on the 1965 bloodbath, previously only discussed as an underground movement, started to surface. In 2002, during the presidency of Abdurrahman Wahid, a number of noted historians issued a different analysis of G30S in a supplement to the state's version of Indonesian history and distributed it to schools.

In the spirit of reform, the effort was later on accommodated by the National Education Ministry's research and development center to be included in the 2004 curriculum.

One history textbook for 12th graders, based on the 2004 curriculum, for example, cited five different versions of the masterminds of the September event using more than 10 books written by local and foreign scholars as references.

Indonesian History Community condemns prohibition on text books

Tempo Interactive - March 19, 2007

Imron Rosyid, Solo – The Indonesian History Community (KSI) has condemned the decision by the Attorney General to prohibit 13 historical book titles by 10 publishers from being used as texts in primary and secondary high schools.

The groups said that the prohibition on the grounds that the text books do not include the Madiun and 1965 rebellions or the word PKI (Indonesian Communist Party) in the writings on the 30 September Movement (G30S) has no basis.

"The prohibition will have a negative impact on efforts to educate the nation because it will create a impasse of thinking within the world of education," said Wahyu Susilo on Monday. Susilo is an activist from the International NGO Forum on Indonesian Development (INFID) and a historical alumni from the Eleven March State University in Solo.

The prohibition he continued, will also confuse teachers and students as well as cause huge financial losses to the publishers. Economically, it will also make it difficult for students' parents because they will have to buy alternative historical books.

In a petition, they also stated that the determination of the educational curriculum is under the authority of the National Education Department, not the Attorney General's Office. Because of this therefore, Attorney General Decree Number 19/A/JA/03/2007 dated March 5, 2007 on the book prohibitions must be revoked. Susilo added that if there are books that the government deems to be problematic, prohibitions should done through a judicial process not unilaterally.

The KSI petition has been signed by 74 historical observers. Professors of history such as Sartono Kartodirjo, Suhartono and Bambang Purwanto from the Gajah Mada University have also signed the petition. Padang State University professor Mestika Zed along with Asvi Warman Adam from the Indonesian Institute of Science are included in the petition.

"We are still continuing to garner support from historians, activists and all parties that care about the nation's history," said Susilo.

[Translated by James Balowski.]

 Transport & communication

No airlines meet safety standards

Jakarta Post - March 23, 2007

Alvin Darlanika Soedarjo, Jakarta – None of the 20 airlines it has audited are completely complying with safety regulations, the Transportation Ministry announced Thursday.

"No airline belongs to the 'fully compliant' group. Out of the 20 passenger and cargo airlines that we have audited, seven are in the bottom category and the remaining 13 in the middle category," said Director General for Air Transportation Budhi M. Suyitno.

The airlines in the bottom group, category III, are Batavia, Adam Air, Kartika Airlines, Trans Wisata Air, Jatayu Airlines and cargo jetliners Tri MG Intra Asia Airlines and Manunggal Air Service.

These companies have met minimal safety requirements, but have not yet complied with a number of flight-related safety measures. "An accumulation of these conditions has caused aviation accidents and serious incidents," Budhi said.

"If they don't improve, the airlines have the potential to be unsafe to fly," he said, adding that they had three months to raise standards or have their operational licenses frozen.

The airlines in category III will receive reprimands starting Friday.

The airlines in category II are Garuda Indonesia, Merpati Nusantara Airlines, Lion Air, Sriwijaya Air, Wings Air, Indonesia AirAsia, Mandala Airlines, Pelita Air Service, Riau Airlines, Trigana Air Service and Travel Express Aviation Service. These airlines fall short on a smaller number of safety requirements.

Charter airline Ekspres Transportasi Antarbenua and cargo airline Republic Express Airlines also belong to the middle group.

The ministry also audited 28 small and charter airlines. "Of the 28 airlines, eight are in the bottom group while 20 are in the middle," said Budhi.

PT Dirgantara Air Service, which is in the bottom category, had three of its jetliners grounded by the ministry because of poor safety compliance.

Transportation Minister Hatta Radjasa said the auditing team consisted of people from the ministry, in line with a recommendation from a previous independent audit team.

The ministry has put out 20 strict and still-developing criteria for the ratings, such as the effectiveness of the management team, the frequency of accidents or incidents, and compliance with routine audits. The minister said during a hearing at the House of Representatives that the ministry would be stricter in issuing aviation licenses because of the large number of airlines that have begun operating in the past several years.

Dissatisfied airline customers are encouraged to send complaints to the ministry's website at www.hubud.dephub.go.id or via text message at 08111899999.

Indonesia threatens closure of unsafe airlines

Agence France Presse - March 18, 2007

Jakarta – Indonesia's new air transport chief said that airlines revealed next week to have neglected safety standards will have three months to comply – or be closed down, a report said Sunday.

"In the three-month period, we will give the airlines the chance to improve their compliance with safety regulations," Budhi Muliawan Suyitno was quoted as saying by the Jakarta Post newspaper.

Suyitno has said that following a review of all commercial airlines operating in the country, the government would announce a new national rating system for airlines and that those at the bottom may be closed.

He said that the decision on whether to close down airlines would be made after the three months and based on complaints from consumers.

"We aim to secure zero-accident status within the next few years, something that has been achieved by the aviation industries of other countries," Suyitno said. "They operate the same type of planes, sometimes of the same age. If they can, why can't we?," he added.

Meanwhile, the Media Indonesia newspaper quoted an unnamed sources with the transport ministry as saying that the government was also planning to revoke the operation licence on 11 airlines which have been inactive for months.

Public pressure for better safety in Indonesia's skies has followed a string of recent air accidents, including a sea crash that left 102 dead and two crash landings, one killing 21 people.

Indonesia's airline industry was deregulated in the 1990s, encouraging a slew of new operators to take to the skies and boosting huge passenger growth.

But confidence in air travel, which helps to bind the archipelago nation of 17,000 islands, has been shaken by the series of tragic incidents. Indonesia has also suffered ferry disasters recently, with the total death toll running into hundreds.

Media Indonesian quoted director general for sea transport Harijogi as saying that the government will also conduct a review on all roll-on, roll-off ferries aged over 25 years.

"As an effort to reduce accidents, ships of over 25 years will have their conditions surveyed to directly see, in the field, their physical condition," Harijogi said. He said that Indonesia had 176 "ro-ro" ferries in operation, 53 of them aged over 25 years.

Experts blame old planes and ships, lax standards and insufficient investment in infrastructure for Indonesia's poor transport record.

 Opinion & analysis

Draft Law on Parties - Looking for a backbone for the republic

Kompas - March 22, 2007

Susie Berindra and Sidik Ramono – The government wants to strengthen the presidential system by simplifying the multi-party system. The big political parties want to have businesses to increase party funds. The new political parties want to take part in the 2009 general elections. What should be done to bridge all of these wishes?

Last week, the Department of Home Affairs held a public consultation on proposals for four draft laws on political affairs. All of the political parties of course enthusiastically went along to the event. For the first time, the new draft law on the 2009 general elections was revealed to the public. The Department of Home Affairs also used the opportunity to elaborate on the gist of its thinking on the four draft laws on political affairs.

The public consultation, which was held at the offices of the Department of Home Affairs, did indeed feel "alive". This could be seen from the diversity of proposals and views expressed by politicians as well other that were present. Twenty-four representatives from parties that participated in the 2004 general elections and 45 new political party leaders attended the meeting.

Tightening up the rules

A number of things have been changed in the proposed Draft Law on Political Parties compared with Law Number 31/2002 on Political Parties. It is safe to say that if the draft makes it though and is ratified, the rules for the establishment of political parties will be even tighter. For example, one of the requirements in the proposed draft for establishing a new political party is that it must have 100 people, previously only 50 people were required.

The requirement on the distribution of branch management boards has also being increased. New political parties must have management boards in 66 percent of the provinces access the country, 75 percent of all regencies/municipalities and 50 percent of all sub-districts. Previously, under Law Number 31/2002 Article 2 Paragraph 4(b) it stipulated that political parties must have management boards in 50 percent of the country's provinces, 50 percent of all regencies/municipalities and 25 present of all sub-districts.

There is another requirement that may also make those wishing to establish a political party think again. A new political party must have as much as 5 billion rupiah (almost 5 million US) deposited in a state-owned bank. Prior to this, there was no requirement in the old law regarding the amount of money owned by a political party.

The stipulation of 5 billion is actually different from the initial draft. In the initial draft that was received previously by Kompas, Article 5 Paragraph 2(a) stated that in order to be validated as a legal entity, a political party must prove that it has deposits of at least 500 billion rupiah at the time of its establishment.

The other outstanding difference in the proposed draft is that political parties are no longer prohibited from establishing party owned business enterprises. The reason given being the need for parties to be self-sufficient and reduce the parties' dependence on the government and public. In Law Number 31/2002, political parties were prohibited from establishing business enterprises or holding shares in a company.

The secretary general of the Crescent Star Party (PBB) Yasin Ardi said he disagreed with the proposal that 5 billion rupiah must be deposited as a requirement for the establishment of a political party. According to Ardi, in order to move towards political parties that are of a high quality and self-sufficient, it is not the requirement on money that should be increased, but rather a requirement that a political party's membership must be larger.

The deputy general secretary of the Reform Star Party (PBR) Yusuf Lakaseng meanwhile expressed the view that the education level requirement should not something absolute for politicians. The level of political education does not necessary indicate the quality of a politician, rather what important is their organisational experience. "Don't let the government regulate this excessively", he said.

The People's Conscience Party (Hanura) that was established by former Indonesian military (TNI) chief Wiranto, as a new political party, also spoke up. Hanura general secretary Yus Usman said that the size of members' contributions should not be restricted if financial assistance from the state budget is to be abolished. "Political party members [should] be able to donate however much, as long as it is legitimate. As for assistance for political parties from the state budget just get rid of it, because it only benefits the big political parties", he said.

The executive director of Cetro (Center for Electoral Reform), Hadar N Gumay said that tightening up the requirements on the establishment of a political party is unnecessary and will only lead to the killing off of alternative political parties that might emerge in the future.

Gumay sees the Department of Home Affair's proposed draft law as only protecting the currently existing political parties so that they will not face any new competitors. "In truth the previous rules were quite good, in fact it has already reduced the number of political parties that took part in the 2004 general elections compared with the 1999 general elections", he said.

Conversely, Sudarsono Hardjosoekarto, the director general National Unity and Politics at the Department of Home Affairs said that in comparison with the previous law, there are actually not very may changes in the proposed draft laws. All of the requirements are designed so that political parties must become the "backbone" of the running of the country, not just parties with a nameplate. Also not parties that just appear in the lead up to the elections.

Why should political parties have to have and deposit 5 billion rupiah? According to Hardjosoekarto, a political party needs funds to run its management boards from the national down to the lowest level offices saying there are some political parties that need operational funds of 3 billion rupiah per month. "This is so that political parties exist to serve the public. At the very least, the public will know that the political party has money. Likewise, the requirement on the coverage of political party management boards and the 5 billion rupiah are related. In order to organise management boards down to the lowest level of course it need money", he said.

While on the one hand the rules are tighter, there are also provisions that are felt to be too loose. For example, the provision that political parties be allowed to own a business. According to the chairperson of the Elections and Democracy League (Perludem), Didik Supriyanto, even without having a business enterprise, political parties can play around with other parties.

"This provision will later be able to open up the space for political parties to 'play around' with other parties. It would be better to regulate the financial responsibility of political parties in an accountable manner", said Supriyanto.

Quality political parties

A survey conducted by Litbang Kompas in early March indicated that that the public still has a negative view of the performance of the political parties, particularly in relation to responding to the people's political aspirations. Only around one quarter of respondents (out of 650) said that the political parties' image and performance was good. Around 60 percent of respondents still viewed it as poor.

In a number of important cases, the public sees that it easy to guess how legislators in the House of Representatives (DPR) will eventually vote, it will be based on the interests and position of the political parties. Will the performance of the political parties continued to be viewed in a poor light? Our hope is of course, no.

Returning to the public consultation, when discussion was opened up the chair of the Golkar Party's central leadership board, Andi Mattalatta, was given the first opportunity to express his views. Appearing as if he did not wish to loose the opportunity, he spoke at some length. What he said of course was certain to those things that would benefit the party with the symbol of the banyan tree.

On several occasions, his proposals were greeted with shouts of "huuu..." from participants, some of whom came from the new political parties. There was even one participant that raised their hand to request an interruption and asked the moderator to stop Matelote's from speaking.

Mattalatta said he welcomed the Department of Home Affairs proposed draft laws on political parties. He emphasised three issues, strong political parties, strong institutional symbols and intelligent inter-institutional relationships. "It is time for the political parties that nominate [candidates for] the presidency and regional head to be of quality", he said.

What Mattalatta meant by quality political parties are those that can meet specific educational requirements for party leaders and a membership size that could be a thousandth of the political party's initial capital (5 billion rupiah).

In addition to this, he also proposed the possibility of allowing cooperation between the political parties and state civil servants. "Particular civil servants need political experience. So, enable civil servants to be able undergo an apprentice in a political party. Likewise enable them to return to being civil servants. This could also intellectually develop the political parties", he said.

Will then the performance of the political parties remain poor forever? Of course, we want political parties that also play a crucial role in the republic to improve and improve again.

But can this become a reality through the regulations on political parties? Let's just wait for the outcome of the deliberations on the proposed draft law at the DPR. Hopefully what comes out of these deliberations will not merely be in the interests of the political parties, but also in the interests of the ordinary people. Because, up until now the interests of the ordinary people have often been forgotten.

[Translated by James Balowski.]

The usual suspect

Jakarta Post Editorial - March 22, 2007

The administration of President Susilo Bambang Yudhoyono took another bold step in its war on corruption with Tuesday's arrest of the chief of the State Logistics Agency (Bulog), Widjanarko Puspoyo. Widjanarko joins a long list of sitting public officials who have discovered that incumbency is no longer a guarantee of protection in the war against graft. In the past, legal authorities did not dare go after corrupt sitting officials, despite all that talk in the Constitution of equality before the law.

The current anti-corruption drive, unprecedented in its scope, has seen sitting governors, regents, police officers and legislative members prosecuted or jailed. Albeit on a smaller scale, the fight against graft also has reached judges and prosecutors, who make up the so-called court mafia. President Yudhoyono deserves credit for these tough measures which his predecessors never took.

The arrest of Widjanarko comes against the backdrop of the latest Political and Economic Risk Consultancy (PERC) survey, which revealed that Indonesia's corruption perception index improved slightly. However, this slight improvement says little about a consistent, uncompromising crackdown on corruption in the country.

Widjanarko's implication in a corruption case should come as no surprise, given the lucrative business Bulog is involved with, food distribution and price control, and its links to those in power. The agency was even more vulnerable to graft in the past when it held monopolies over the supply of food staples such as rice and sugar, but only former Bulog chiefs Rahardi Ramelan and Beddu Amang ever felt the pinch.

Any graft case involving Bulog has political implications, as was evident in the corruption trial of Rahardi, which also dragged down seasoned politician Akbar Tandjung. An earlier high-profile corruption case involving the agency led to the ouster of then president Abdurrahman Wahid.

Because Widjanarko is a former House of Representatives legislator representing the Indonesian Democratic Party of Struggle (PDI-P), which has fashioned itself as an opposition party, one could jump to the conclusion that his arrest is politically motivated. These suspicions were only heightened when State Minister for State Enterprises Sugiharto quickly announced Widjanarko's planned replacement after his arrest.

Prosecutors accuse Widjanarko of corruption in the Rp 11 billion procurement of imported cows from Australia in 2001.

But however strong the case to jail Widjanarko and other officials, the public will not be impressed until Yudhoyono shows he is willing to take similar action against the people close to him.

It is no secret that Yudhoyono is seeking reelection and building a clean government will be vital for wooing support in the 2009 election.

That could mean the politicization of the nation-wide campaign against corruption. Many quarters, including politicians critical of the government, have warned the President of "selective cutting", a term referring to an anti-graft drive that targets political rivals or those who have not pledged allegiance to Yudhoyono.

The Yudhoyono administration can prove such allegations wrong by, for example, ordering an investigation into the alleged involvement of two of his Cabinet members, Justice and Human Rights Minister Hamid Awaluddin and State Secretary Yusril Ihza Mahendra, in the questionable transfer to Indonesia of US$10 million belonging to former president Soeharto's son Tommy from the London branch of bank BNP Paribas. Finance Minister Sri Mulyani says the decision by Hamid to open a government account to temporarily keep the money violated regulations as it was not reported to the finance minister.

Yusril's connection with the case is found in the complicity of his law firm, Ihza & Ihza, in the disbursement and transfer of the money. Tommy hired the law firm in 2004 to help expedite the disbursement of the money when Yusril was the minister of justice and human rights.

Supreme Audit Agency member Baharuddin Aritonang has said there are indications of money laundering in the case involving Hamid and Yusril, and recommended legal measures against the two.

It is now up to Yudhoyono whether or not he will put his clean record at stake. Bulog is a usual suspect in the country's fight against corruption. But the President cannot allow graft to take place right under his nose.

Yudhoyono must deliver on his pledge to start the crackdown on corruption in his own backyard.

Corrupted pipe dreams in Indonesia

Asia Times - March 20, 2007

Bill Guerin, Jakarta – The opening of a new US$1.1 billion gas pipeline would appear to mark a rejuvenation of Indonesia's until now woefully inefficient natural-gas sector and boost the fortunes of publicly listed, majority state-owned gas- distribution company PT Perusahaan Gas Negara (PGN). But enduring regulatory uncertainty and allegations of foul play among PGN's top managers threaten to scupper those prospects.

After a four-month delay, PGN's 375-kilometer pipeline came on- stream on March 11. It represents the first segment of PGN's planned 1,101km South Sumatra West Java (SSWJ) gas-pipeline network. Two big take-or-pay contracts for a total of 3.3 trillion cubic feet of gas, including a 17-year deal with the United States' ConocoPhillips, as well as a 15-year arrangement with state-owned oil-and-gas company Pertamina, provide a guaranteed revenue stream.

The new pipeline is scheduled to carry 30 million cubic feet of natural gas per day (mmcf/d) to Maringgai at the tip of South Sumatra. From there, gas will be piped through a second segment to Cilegon in West Java, where it will feed the blast furnaces of the giant state-owned steel factory PT Krakatau Steel.

By 2010, PGN says it expects to have more 1,600 industrial clients, including big fertilizer, chemical, metal, glass, ceramic and electricity producers. The remaining 661km segment is still under construction and is scheduled to come online early next year, distributing an additional 400mmcf/d of gas from South Sumatra to Muara Bekasi and Rawa Maju in West Java.

The two new pipelines are provisionally expected to boost PGN's revenues and profits. This year, PGN will distribute 555mmcf/d of gas, more than double the 258mmcf/d it distributed in 2003. Its profits rose from Rp504.8 billion (US$54.7 million) in 2003 to Rp862 billion in 2005, and the company says it expects to declare profits of about Rp2 trillion on 338mmcf/d of gas distributed in 2006. By 2008, PGN says it expects its gas volume to reach 919mmcf/d and by 2010 it expects to have some 2 million homes buying gas, compared with the current 78,000 homes.

Those heady projections, however, have come under closer scrutiny since allegations of corruption and insider trading have beset the company. The allegations stem from the government's divestment of a 5.1% holding in PGN through a public offering last December, which was provisionally set to generate Rp3.2 trillion for state coffers but only managed to bring in Rp2 trillion.

Indonesia's most famous independent corruption buster, Teten Masduki of Indonesian Corruption Watch (ICW), claims the lackluster sale was the result of insider trading and market manipulation. The company has denied the allegations. But PGN's shares plummeted by more than 23% in a single day's trading on January 12 when, just weeks after the share sale, the company announced a delay in the pipeline's construction. The announcement triggered a sharp fall in shares of other listed state enterprises that do business or have links with PGN. The Capital Market Supervisory Agency (Bapepam) this week imposed Rp5 billion in fines on four of the company's directors and a commissioner for failing to disclose information to the public. Bapepam found the directors had purposefully delayed announcing problems with the pipeline's construction. Masduki has filed a report with the Corruption Eradication Commission claiming that corruption at PGN has caused the state to lose more than Rp1 trillion. His group has also speculated that an official investigation into PGN's workings could expose corruption at other state-owned enterprises with links to PGN. The House of Representatives Commission XI, which oversees state-owned enterprises, has since called for a parliamentary investigation into the allegations.

The political furor is complicating PGN's ambitious plans and threatens to hamper the entire gas-distribution industry in Indonesia, which is already failing to meet surging domestic demand. Energy and Mineral Resources Minister Purnomo

Yusgiantoro told legislators this month that growing domestic demand and stagnant production had resulted in a deficit of some 300mmcf/d.

Supply shortfalls

National production is about 8,100mmcf/d, while domestic demand has reached 8,400mmcf/d, he said. Indonesia's total gas reserves, including proven and unproven deposits, were estimated at 187.1 trillion cubic feet in 2006, up slightly from the 185.8

trillion cubic feet booked in 2005. The government is working to boost exploration activities through more foreign and local investment to raise the proven gas reserves to 75 trillion cubic feet, according to Yusgiantoro, who also said he targets an increase in gas production to 8.6mmcf/d this year.

While the new gas supply now flowing from South Sumatra to West Java will help ease shortages, it's important for Indonesia's broad economy that PGN's extended pipeline is completed on schedule. Domestic demand has more than tripled in three years, from 6.8 trillion cubic feet in 2003 to 18.1 trillion last year, and is expected by energy analysts to grow at 6% a year until at least 2012.

Encouraged by the gradual removal of fuel-oil subsidies, end users were persuaded to switch to comparatively cheaper natural gas. Tax and production-sharing incentives have been promised for producers, consistent with the 2006 presidential decree on domestic gas utilization. But the government has also said changes will be made to the amount of gas that producers must contribute to the domestic sector.

This will be changed from the current 41.6% for the domestic market to a minimum of 50%, which is exactly double the level assumed in most existing production-sharing contracts. While this will boost domestic supply, it may well negate the value of any incentives given to gas producers for further exploration, especially given the difference between the higher prices achieved in LNG (liquefied natural gas) exports compared with the domestic market.

Gas exports brought in $42 billion in 2006 and domestic sales some $25 billion, according to Ministry of Energy statistics. Still, the government has not set a pricing structure for the domestic gas sector, and such regulatory uncertainties continue to constrain infrastructure development. If the government fails to maintain a stable operating environment and industry structure, PGN could soon be exposed to the risk of non-renewal of its sales contracts on maturity. Decisions on renewals are usually made far in advance of the actual cutoff dates.

Nationalistic signals from prominent politicians, including Vice President Jusuf Kalla, are increasing that policy risk. He recently called for more gas to be used locally rather than exported, by diverting fuel from East Kalimantan, the country's main gas-producing region, to shortage-hit areas in East Java and northern Sumatra. He said the economic logic behind such a move would be to create a multiplier effect, by creating more jobs in the gas sector and providing farmers with cheaper fertilizer to boost agricultural production.

Kalla's prioritization of domestic versus foreign sales has raised eyebrows before. In an interview with a mainstream Singaporean daily last May, he argued: "Up to now, almost all of our [Indonesia's] energy products such as LNG, coal and oil are exported. But if the Japanese, let's say, need these, wouldn't it be more efficient if they were to build a factory in Indonesia?"

Questions over the reliability of supply and political support for the sanctity of contracts have long dampened the investment climate for new energy projects in Indonesia. Now new allegations of foul play at PGN and nationalistic policy signals conspire to suppress the new investment in the sector the country so desperately needs.

[Bill Guerin, a Jakarta correspondent for Asia Times Online since 2000, has been in Indonesia for more than 20 years, mostly in journalism and editorial positions. He specializes in Indonesian political, business and economic analysis, and hosts a weekly television political talk show, Face to Face, broadcast on two Indonesia-based satellite channels. He can be reached at softsell@prima.net.id.]


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