Oil giant gets Indonesia warning PDF Afdrukken

Wednesday, 12 March, 2003, 00:11 GMT BBC News By Manuela Saragosa BBC Business reporter
Energie maatschappij BP is gewaarschuwd om niet te steunen op de  Indonesische militaire macht bij de exploitatie van een enorm nieuw gasveld in een arm, afgelegen gebied in West-Papua. (Artikel in het Engels.)

Troops at Freeport mine
Papuans distrust army guards at Freeport mine

Energy firm BP has been warned against relying on Indonesia's military as it develops a huge new gas field in a remote, poor area of West Papua province.


The recommendation comes from a panel of advisors whom BP asked - and paid - for independent external guidance on its Tangguh liquefied natural gas (LNG) project.

Tangguh has the potential to become one of the world's premier LNG facilities and could sustain Indonesia's position as the world's largest LNG exporter.

The Tangguh Independent Advisory Panel (TIAP) of four internationally respected figures consulted local villagers, Indonesian government officials and non-governmental organisations (NGOs) in London and Indonesia.

A model to avoid

BP is keen to avoid walking in the footsteps of New Orleans-based Freeport McMoRan, which has been operating the world's richest gold and copper mine in Papua since the 1970s.

Distrust and fear of the military are present in Papua

Freeport relies on the Indonesian military for security services, although troops are also fighting separatist rebels in the region.

The company has been regularly criticised by human rights activists and environmentalists.

Tangguh promises to be the most significant investment in West Papua since the opening of the Freeport mine there.

'Distrust and fear'

TIAP's report said security at Tangguh would be "the most difficult and sensitive issue for BP".

"Distrust and fear of the military are present in Papua. It's caused by the experience of Freeport, where many Papuans were treated inhumanely. NGOs are worried that a big project like this will be accompanied by a big military presence," said Papuan Reverend Herman Saud, one of the advisors on the BP Tangguh panel.

West Papuans protesting against Indonesia's military
BP wants to avoid attracting local anger

But at a presentation of its findings to NGOs and journalists, the panel was also keen to stress that almost everyone they spoke to was overwhelmingly in favour of the project.

"The concern is more about how the project will be handled," said ex-US Senator George Mitchell, who advised the UK government on the Northern Ireland peace process.

Mr Mitchell, who chairs TIAP, added that many Papuans and NGOs had welcomed BP's consultative process.

Mr Mitchell said the panel supported BP's idea of developing community-based security.

This would involve enlisting Papuans for basic perimeter security of the project.

The police would only be called on for major internal disturbances and the army only for the most serious threats.


The report conceded that "many believe this concept (of community-based security) is unrealistic and that the (Indonesian army) will insist on protecting this vital national asset at close range".

Papuan separatist demonstrator
Locals want to be consulted about policing
Many Indonesian military officials make money by protecting businesses, it said.

BP has pledged to "engage in high level consultations with senior political, military and police officials" to try to sort out security issues "before a final decision is made..to go forward with the project."

BP added that it would resist demands by the army or the police for direct funding.

The panel also advised BP "not to assume the roles of a local government, or to be perceived as such, as Freeport has done (at its West Papua mine) in Timika."

The Tangguh project is located in the Bintuni Bay region of the Bird's Head area of Papua.

The town of Jayapura, West Papua
West Papua is remote and poor
It's a large, pristine bay with perhaps the world's largest mangrove forest and what is considered one of its most varied marine ecosystems.

The communities around the bay are small, isolated villages of up to100 families.

They "live in primitive wooden houses with thatched or corrugated metal roofs and outdoor cooking and toilet facilities," the TIAP report notes.

Most depend on shrimp farming, using dugout canoes rather than outboard motors.

But expectations of the wealth the project is likely to bring to the area are already running high.

Hopes of wealth

Construction of the project has not yet started; BP's presence in the area amounts to no more than a base camp site. But the panel said the company already faced a "series of escalating requests, bordering on demands."

"For example, the decision to provide new housing to the villagers from Tanah Merah, which must be physically moved, has led to parallel demands by villagers from the north shore (of the bay)," the report says.

Impatience with the project could be problematic. Exports from the field are slated to start in 2006 but the Tangguh project is not due to start generating revenues for the provincial government in West Papua for another decade or so.

Furthermore, the project could be delayed if the necessary sales contracts for Tangguh's gas fail to materialise.

BP said it intends to deal with these issues by continuing to invest in local education and health development projects, and to work with donor agencies such as the United Nations Development Programme to build up more robust local governance capacity.