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Jakarta Post [online], November 29, 2001
JAKARTA (JP): Beyond Petroleum (BP) Indonesia and the state oil and gas company Pertamina have signed a contract with the Philippines for the supply of 1.3 million tons of liquefied natural gas (LNG) per year, a report said.
BP Indonesia spokesman, Sunarto, said as quoted by Antara in the Irian Jaya capital of Jayapura on Thursday that the LNG would originate from the Proyek Tangguh LNG field in Berauw Bay, Irian Jaya province.
He said BP Indonesia was also exploring the possibility of marketing LNG to China.
The British company was expected to start production in 2006, he said.
The LNG project covers the districts of Manokwari, Sorong and Fakfak.
Sunarto called on the local people and administrations to maintain security around the project, which is one of the province's sources of income, in line with the implementation of the law on regional autonomy.
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20 December 2001, by Carmel Budiardjo
Dear All,
Bennett Freeman is one of a team of two people who has been appointed by BP to undertake a human rights impact assessment of the Tangguh project. This is obviously a follow-up of what John Browne said BP would do when we met him with John Rumbiak.
Freeman has a long involvement in working out codes of practice for multinational corporations. While still Deputy Assistant Secretary of State for Democracy, Human Rights and Labour during the Clinton administration, he was the lead figure (according to him) in drafting a set of
Voluntary Principles on Security and Human Rights for the US and UK governments which involved discussions with nine multinationals and 9 NGOs including AI and HRW. BP was among the nine companies which signed up. Others he mentioned were Shell, Chevron, Rio Tinto, Texaco and Conaco. He promised to send me the document and press reactions when it was announced in December 2000
by Madeline Albright. He describes the Principles as being 'aimed to ensure that company security arrangements in the extractive sectors are consistent with international human rights standards'.
The aim was to work towards a global set of principles for business. He said other companies had
since endorsed the Principles, as has the Bush administration.
He said he had two questions to put to me:
1) is it realistic for BP to achieve its aim of eliminating or minimising the role of the military in its security arrangements? Could I identify any 'more acceptable' security force units that might be involved in guarding the installations?
2) if military are not involved, then who could be relied on?
In response, I said these were precisely the questions I wanted to put to him!
He also asked whether I thought the military could be 'bought off' with money, to leave the company alone.
Interestingly, he opened the topic by talking about 'minimising' the military role, not 'a military-free zone', which is what BP talks about.
When I pointed out the difference, he said that as an experiienced diplomat, he is always inclined to be 'more realistic'.
Having already got his marching orders from BP here in London, it's clear that they are flaying in the dark. I asked what did he think they have in mind? He said, training local police, people from local communities, etc.
He hoped that his visit to the area would provide him with some answers to something that would be compatible with the Voluntary Principles. He recognised that the sweepings in Wasior were a 'pre-emptive strike' by the security forces to make a point about how their presence was needed.
I offered no suggestions about any 'more acceptable' units and gave him an earful about what the Indonesian military are really like, adding that the company should inform themselves better first about the armed forces and the overall political situation before getting involved in a project in W Papua. I warned him also about seeing the police - ie Brimob - as being anything better. If Indonesia were a normal state, I said, the job would be one for the police.
He asked me whether I thought that special autonomy would be acceptable and would solve anything. I told him a definite NO. Of course, it will be introduced and become law in West Papua but it would not make any difference to the fundamental problem confronting the Papuans, their demand
for dialogue, a re-writing of their history, etc.
I also pointed out that TAPOL could not be involved in negotiations with BP and this was a matter for NGOs in West Papua.
That's about as far as we got. He said he would get in touch again after his trip.
Carmel
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Copyright 2001 Asia Pulse Pte Limited
Asia Pulse - October 26, 2001 Friday,
DATELINE: JAYAPURA, Irian Jaya, Oct 26
BODY:
Plans for a mega hydro-power plant on the Mamberamo river in Irian Jaya's Jayapura regency will not come to fruition without foreign investment as neither the Indonesian government not local investors have expressed interest in taking up the project.
Yulianus Kowi, a public figure in the Mamberamo Hilir district, said here Thursday the Irian Jaya administration and the central government will have to work together in seeking foreign investors who are willing to build the mega project. He said the local population have been hoping that the
project could be realized soon to help overcome their daily problems and boost the development of the region.
The project could also free the region from isolation and help the government open new employment opportunities to overcome the increasing unemployment in the area.
He also said that Memberamo Hulu and Memberamo Hilir are rich in natural resources, but still practically untouched by big capital.
The only natural resources in the area that have already been exploited is wood by forest concessionnaires, while other resources like minerals, large estates, vast farm land, are still waiting for large capital investors.
Recent surveys indicated that Memberamo is also rich in oil, gas, gold and copper, and also has vast land most suitable for large estates and farms.
The basic complaints that had often been aired by the population of Memberamo is that they are living amid rich natural resources, but the government has not taken any positive steps to raise their income and social welfare, Yulianus Kowi said.
(ANTARA) LOAD-DATE: October 26, 2001
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Asian Wall Street Journal, November 14, 2001
By Timothy Mapes, Staff Reporter
BINTUNI BAY, Indonesia -- A pack of cigarettes in his pocket and a lump of betelnut in his jaw, Robert Hewat brushes the shaggy blonde hair from his eyes and roars off in a speedboat toward the
isolated settlements that line this bay. He comes bearing a message: Oil giant BP PLC is ready to help these impoverished villages prosper.
Slipping past men paddling dugout canoes, Mr. Hewat's boat winds up a narrow, muddy river. Dense jungle closes in; palm fronds slap the vessel as it passes. Half an hour later, Mr. Hewat reaches
Tomagi, a village of 37 wooden shacks. There, Rofinus Nanafesi, a barefoot local chief, offers him a stern warning. "We don't want the same bad things that were done by previous companies," he
grumbles. BP had better live up to its promises, he adds.
Beneath this untainted grayish bay on Indonesia's eastern frontier lies one of Asia's largest untapped fields of natural gas. Starting next year, the company plans to pour at least $2 billion
into a vast project that will siphon that gas from the ground, chill it into a liquid and ship it off to a spiderweb-like network of terminals and pipelines that will ease Asia's ever-growing
thirst for electric power. When the project is up and running by 2006, BP hopes the field - known as "Tangguh," or "All-Powerful" in Indonesian - will play a key role in turning the British
company into an Asian energy giant.
But to make the plan work, BP says it also needs to pull off a unique piece of social engineering: ensuring that the people who live here, in one of the world's most remote and underdeveloped regions, actually benefit from the project. Without the support of people like Mr. Nanafesi, BP fears that clashes with local groups will make it impossible to operate in this conflict-ridden part of Indonesia. Local unrest has done in other foreign ventures elsewhere in the country. That danger was underscored just this week, when Theys Eluay, a leading figure in this province's independence movement, was killed by unknown assailants, sparking angry protests by thousands of his supporters who blame the Indonesian military for his death. Many observers fear further violence could rock this region in the months ahead.
Yet rather than shy away from such risks, BP is embracing them. The company is holding dozens of meetings with local villagers, government officials, environmentalists and even independence
activists to find out precisely what the community wants from the project and devise ways to achieve those goals. Such a process is unprecedented here. Indonesian officials call it a "test case" for future large-scale investment projects. For BP, it boils down to a $2 billion bet that it can change the way multinationals do business in this country.
For years, foreign companies have chopped down Indonesia's rainforests, dug up its gold and minerals, tapped its oil and gas deposits. Massive wealth has been created, and some of it has
trickled down to the Indonesian people, especially those who live on Indonesia's main island of Java, and its capital, Jakarta. But people in this outlying province - known in Jakarta as Irian Jaya but called West Papua by the local people - have seen little of these riches. Though among Indonesia's wealthiest regions in terms of resources, it has the country's lowest living standards. Here, the people of Bintuni Bay continue to watch from canoes as outsiders send in trawlers to catch their fish and barges to take their trees. Adequate electricity, running water, health care, education: All remain the stuff of dreams.
"Over the next 10 years, this kind of living must change in every way," says Saban Nabi, a schoolteacher in the village of Taroy, an hour across the bay from Tomagi. Mr. Nabi, a clean-shaven young man in a blue shirt and slacks, is speaking in Taroy's main hall, an open-sided wooden structure set on stilts beside the village's main dirt path. About a dozen local men sit cross-legged on the floor wearing torn T-shirts and shorts; half-naked children crowd around the doors and windows to listen in on a discussion about the BP project.
"We need to develop our human resources, housing, clean water, roads. We don't want these backward conditions to continue," Mr. Nabi says. His village is 42 kilometers through dense jungle from the nearest road; visitors arrive by canoe over shallow tidal flats and then wade through oozing black mud to reach the shore. An electric generator sits broken and without fuel in a neighboring shack. Instruction for Mr. Nabi's pupils ends at age 12.
While former President Suharto ruled Indonesia, the military forcibly suppressed tensions sparked by such deprivations. But since his downfall in 1998, local groups have become increasingly
assertive in promoting their interests, sometimes posing major headaches for foreign companies. Several mining ventures have already abandoned Indonesian investments, unable to evict
squatters who overran their land claims and carted away the minerals. More ominously for BP, a liquefied natural gas facility run by ExxonMobil Corp. - the same type of plant BP plans to
build - was forced to close for four months earlier this year after it was entangled in a separatist conflict on the opposite end of this archipelago. New Orleans-based Freeport McMoRan Copper & Gold Inc., which operates one of the largest mines in the world some 500 kilometers southeast of here, has been dogged for years by complaints from local groups that they have been pushed off their native lands and shut out of jobs and income from the mine.
To find buyers for its gas and financing for its investment, BP needs to be able to show that it can avoid a similar fate. It hopes to do so by building alliances in the surrounding communities, which will entail helping them convert revenue generated by the Tangguh project into schools, clinics, housing and other facilities. The company wants the communities themselves to set the priorities, rather than have them imposed by BP, to avoid creating a dependent relationship in which the villages look to the oil company to provide for all their needs.
Some environmentalists familiar with the project and the region warn that the company will find it impossible to satisfy everyone. They warn that BP may end up raising expectations only to dash
them later. For example, the desire among local people for a massive project with dozens of money-generating spinoffs will come into direct conflict with the need to limit its environmental
impact. The location of the site in this extremely important and fragile ecosystem - the world's second-largest mangrove swamp is just a few kilometers up the bay -- will put BP's reputation as
one of the world's "greenest" energy companies to the test.
"There really is a great deal of corporate risk involved," says Ian Dutton, Indonesia director of The Nature Conservancy, a Virginia-based environmental group, who has talked with BP about
their environmental and community-development plans. "But we have to give some recognition to the efforts that are being made. I've been involved in so many projects (in Indonesia), and this is such a contrast."
BP's plan will get a substantial boost from a new law passed by Indonesia's parliament last month aimed at damping separatist feelings in Papua by giving it more control over its own affairs.
The autonomy law will allow the province to keep 70% of the tax revenue generated by natural-gas projects in the territory, up from around 10% currently - revenue that Gov. J.P. Solossa pledges
will be channeled mainly into education and other human-development needs. "If people can live under prosperous and wealthy conditions, I don't think they will think about independence anymore," he says.
But BP also has a number of minefields to navigate. Indonesia's military, for instance, has traditionally insisted on "protecting" major economic assets from local insurgents in what critics say is a simply a way to extract revenue from foreign investors. It's a policy that ExxonMobil came to rue after Indonesian troops stationed on its facilities in the far-west province of Aceh were accused of killing and torturing locals seeking independence for that territory, turning the plant into a target for rebel groups. So far, BP has stressed that it believes the best security will come from establishing a close and mutually beneficial relationship with local people. But many community leaders fear the company will be unable to prevent the military and police from establishing a large presence around the site, which could trigger conflicts with the local population.
Already, some community leaders have accused the military of trying to stir up trouble in a neighboring district, where 10 people died recently in clashes with police, to create a lucrative
opportunity for the security forces with the Tangguh project.
"Violence is created so that BP will turn to them and say, `Yes, I need the armed forces,"' says Willie Mandowen, a senior official in the Papua Presidium Council, a group of tribal elders that
espouses independence for the territory. Military officials deny such charges. But other groups, including the World Wide Fund for Nature, which is advising BP on the environmental impact of the
project, have urged the company to declare the area a "peace zone" where disputes will be resolved through arbitration rather than violence. BP says it is actively considering the idea, but notes that it won't fly unless the military and police agree.
BP has also inherited, and so far failed to resolve, a few conflicts with local residents that date from several years ago, when Atlantic Richfield Co. discovered the gas here. (BP bought
ARCO for about $30 billion in 1999.) In the most important case, residents claimed test wells drilled by ARCO in 1997 poisoned a river and led to the deaths of 48 babies in the nearby village of Weriagar. BP insists the cause of death was an outbreak of measles and was unrelated to the drilling, but it has set up a trust fund to allow a neutral body from the district's main town to
investigate the claims and arbitrate the dispute. Yan Christian Warinussy, executive director of the Institute of Research, Study and Development for Legal Assistance, says his group has carried
out two rounds of interviews but hasn't yet found enough evidence to support the villagers' claims. It hasn't reached a final conclusion.
Mr. Hewat's work illustrates the challenges ahead. An unlikely apostle for BP's vision, the 32-year-old Australian had never worked for a company before he joined BP's team in July. But he
knows the Papuan people from four years working in the remote highlands on health and agricultural issues for nonprofit and governmental organizations. He argues that the villagers can reap benefits from the Tangguh project if they are given a chance.
"The Papuan people are not stupid. They know what their problems are and they can find their own solutions and bear a fair amount of the responsibility for implementing them," he says.
On a recent afternoon, Mr. Hewat returned to Taroy to present the village with a finalized community-development plan for next year - the product of nine days of discussions between BP's
development team and Taroy's men, women and young people. The 22-page plan lays out a detailed program for training in everything from engine repair to midwifery, as well as improvements to the village's water and power supplies.
Yet a short discussion following the presentation shows just how difficult it will be for BP to satisfy the community's many desires. Asked how Taroy felt about the plan, the 36-year-old
village chief, Rajab Solowat, throws the question out to the dozen men sitting cross-legged and smoking cigarettes on the wooden floor of the meeting hall.
A raucous debate ensues. Village secretary Nurdin Bauw, dressed in a white BP polo shirt - a souvenir from a trip to a gas plant on the island of Borneo that BP sponsored earlier this year for a few local residents - notes that the village is eager to receive opportunities for education and training. But he also points out that BP has agreed to build fancy new houses for a village that is being displaced across the bay, and says BP should build the same homes here.
"We agree that the construction of the houses can be step-by-step. But we would also like the company to build a new road," he says.
Mr. Nabi, the village school teacher, adds that BP should make sure that local residents are trained to get jobs at the new plant, and argues that BP should pay the villagers to build their
new houses.
Arian Ardie, the visiting head of BP's community-relations program, moves over to respond to Mr. Nabi, kneeling on the floor in front of him. A small crowd gathers around.
"We appreciate the aspirations we have heard here today, but a house cannot be built all at once. The important thing is the priorities that are conveyed by the people. Once those have been conveyed, the important thing is cooperation, so that the program will materialize," he says.
"I also can tell you here that if there is no cooperation but only demands I think the company will think again about whether the project will take place or not. This is not a threat. It must be understood that what has been promised cannot materialize at once," Mr. Ardie says.
Mr. Solowat, the village chief, steps in to head off a confrontation: "Of course, the people of Taroy will cooperate with the company. We will sit together again." Mr. Nabi agrees. "We can accept the BP team here," he says.
As tensions ease, village children wave to the BP team as it walks to the shore to board the canoes that will take them out to the waiting speedboat. Mr. Hewat is unfazed by the meeting, describing it as just another small and not especially unusual part of the dialogue that will play out between BP and the community over the next 25 to 30 years.
"It's a never-ending process," he says, noting that only a few days earlier, people in Taroy had yelled at him about the housing issue. Now they seem slightly less riled up about it. "We've got
to let the people communicate," he says. ---Puspa Madani and Rin Hindryati contributed to this article.
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BASIC INFORMATION
The project:
· The Tangguh LNG project, launched in 1997, includes three gas fields in Bintuni/Berau Bay - Wiriagar, Berau and Muturi - and a LNG processing plant which will be built at Saengga / Tanah Merah on the southern side of the bay. An accommodation complex and airstrip will be built near the plant.
· BP plans to open 2 offshore gas platforms in Bintuni Bay. These will feed gas from the three fields via two underwater pipelines to the LNG plant.
· The planned production start-up date is currently 2006.
· The two- "train" (terminal) LNG project will cost US$2 billion. Each train will have a production capacity of 3-3.5 million tonnes of LNG/year.
· The project's life is expected to be over 30 years.
· The Wiriagar, Berau and Muturi fields contain an estimated 14.4 trillion cubic feet of proven gas reserves. BP says a further potential 9.3 tcf of probable and possible reserves are in the immediate development area.
· Exploration is continuing in other areas of the "Bird's Head" region of West Papua. As many as eight gas trains are possible in future, meaning four times the impacts.
The local people and environment:
· The LNG plant location covers around 600 hectares of rainforest. Villagers currently living at Tanah Merah will be moved to a new location.
· There are 9 tribal groups in the Berau/Bintuni Bay area: the Inanwatan, Sebyar/Kamberam, Soub, Wamesa, (on the northern and eastern sides of the Bay) and Uri, Irarutu, Simuri, Sebyar/Kamberam and Mbahan on the southern side).
· Local indigenous peoples are largely dependent on the local natural resources - including shrimp, fish, sago - for their subsistence livelihoods. Resources are threatened by commercial shrimp trawling, logging and plantation developments.
· The mangroves of Bintuni Bay are the largest remaining in Southeast Asia. The eastern end of the Bay is a nature reserve, but other areas have been handed out as timber concessions and have been logged.
· There is an oil palm plantation near the LNG site, operated on the transmigration - NES (nucleus estate/smallholder) model
(PIR).
Employment:
· Up to 5,000 workers will be employed during the construction phase.
· There will only be around 350 permanent operating jobs.
Companies involved:
The Tangguh project (covering three gas fields and LNG processing plant) is operated by BP under a Production Sharing Contract (PSC) with Indonesian state oil company,
Pertamina.
· BP operates the Wiriagar and Berau gas fields, BG operates Muturi.
· Pertamina will own the LNG terminal, which will be operated by a company jointly owned by Pertamina and the PSC parties.
· BP currently has a 50% stake in the combined project. The current shareholdings are as follows:
Tangguh project overall % ownership
BP
50
MI Berau B.V. (Mitsubishi 56%, Inpex 44%) 16
Nippon Oil 12
British Gas 11
Kanematsu 10
Nisho Iwai 1
Kanematsu recently formed a joint venture with Sumitomo and is reported to want to expand its stake. Reports also say China National Offshore Oil Corps (CNOOC) has been offered a 5% share in
Tangguh.
Sales contracts:
· BP/Pertamina are currently bidding for a contract to supply China with up to 3 million tonnes of LNG per year for at least 20 years. BP won the contract to build the Guangdong gas terminal and pipeline project, due to start construction in late 2002. BP has a 30% holding in this project.
The Indonesian government plans to push Tangguh during the Chinese Premier's visit to Indonesia in November 2001.
· Also in November 2001, BP and Pertmina signed a LoI (Letter of Intent) with
GN Power, Philippines for the supply of 1.3 million tones of LNG.
BP in Indonesia:
· BP has been active in Indonesia since the 1960s and currently holds interests in nine Production Sharing Contracts.
· It is 50% shareholder in the controversial Kaltim Prima Coal (KPC) mine at Sangatta, East Kalimantan, with partners Rio Tinto. This project has been beset by labour disputes in recent years. The East Kalimantan provincial government recently filed a lawsuit against the company over its failure to divest shares.
MAIN CONCERNS: (not a comprehensive list)
· The political context: the assassination of the pro-independence PDP leader, Theys Eluay, has made the political situation even more explosive; more troops are being sent to West Papua and there is a high incidence of human rights violations by Indonesian security forces. How will BP
fulfil its commitment to human rights and how will it implement "best practice" in this setting?
· Security/potential for human rights abuses: How will security at the site be handled? BP says it wants to create a military-free zone and says the best way to handle security is to ensure that local people are in favour of the project. However it is Indonesian policy to provide military protection for large-scale projects considered vital state assets. There is a
strong possibility that local military and/or police elements may deliberately generate conflicts to justify their presence at the site (it has already been suggested that the security operations in nearby Wasior sub-district may be linked to Tangguh in this way.) There are fears that having TNI or police guards at the site will inevitably lead to human rights violations by TNI/police on the local population.
There is already a Brimob (mobile brigade, police) presence in the area to guard a logging concession held by the Jayanti timber group.
· Social impact: how strong is local community organisation? How well equipped are local communities to deal with this project? How will adat (customary) rights be treated? How representative are "community representatives"?
· Right to veto and compensation issues: The political and legal situation in West Papua has not permitted local communities to exercise the right to veto projects on their lands. Instead local communities have been offered inducements to secure their agreement. How is BP managing this process and the divisions between communities that it is creating? What complaints procedures have been set up to anticipate potential problems in future?
· Environmental/social impacts of immigration: The construction phase of the project will attract migrant job-seekers from other parts of West Papua and from Indonesia. How will BP manage the environmental impact and social impacts of a surge in population? Current thinking at BP involves
developing a "Distributed Growth Centre" strategy. This includes instigating programmes for regional and local economic development in existing population centres (Manokwari, Sorong, Fak Fak, Bintuni and Kokas and others) and avoiding the creation of a purpose designed "new town"
near the LNG plant. BP staff regards the Freeport example as the way not to do it.
· Environmental impacts from gas recovery and LNG plant: impacts on the fragile ecosystem of the Bay, on which local peoples' livelihoods depend.
· Transparency: BP is making more effort than most multinational companies to consult and provide information to local communities as part of the company's strategy to make sure the project runs smoothly. The quality of information and how effectively it is disseminated need to be closely
monitored. Has BP informed local communities of the potential negative impacts of the project? Have BP's commitments (to upholding human rights etc.) been translated into Indonesian and circulated widely?
· Engagement with NGOs: BP is spending large amounts of time and funds engaging with NGOs in West Papua, Indonesia and internationally. The company has held regular meetings with local and international NGOs in West Papua and wants to organise international and national-level meetings.
BP staff have invited NGOs to contribute their ideas on how best to deal with the security issue, for example. How should NGOs respond? How can they best maintain a critical distance from BP and avoid becoming drawn in to a situation where they act more as consultants for the company rather
than assisting communities to defend their rights? How far can they participate in discussions without becoming co-opted? How far will BP be willing to modify its operations in response to community and NGO concerns?
· Revenues: under West Papua's new special autonomy law, 70% of government revenues will be handed back to the local administration. How effective are BP strategies aimed at ensuring that the anticipated large amounts of funds reach the people most affected by the project?
· Issues outstanding: from pre-1999 days before ARCO was taken over by BP. Villagers in Wiriagar blame ARCO exploration activities for the deaths of 48 babies. Unresolved compensation disputes.
Resources:
BP website addresses:
What we stand for (BP business principles)
Key issues (includes statements on human rights, security etc)
Gas and power document - see p.12 for Tangguh
Recent DTE articles on Tangguh:
DTE 50, August 2001
English:
DTE 50, August 2001
Indonesian:
DTE 49, May 2001 English:
(see second section)
DTE 48, February 2001
English:
DTE 48, February 2001 Indonesian:
In 1966, the government pioneered a type of agreement between Pertamina and its foreign partners known as the Production Sharing Contract
(PSC).
Under the terms of the PSCs:
§ Pertamina manages the operations of the contractor;
§ Contractors pay a bonus when the PSC is signed;
§ Contractors provide all funds to conduct operations;
§ Contractors recover start-up costs only after commercial production begins;
§ Contractors pay Indonesian income taxes;
§ PSCs allow for 6 to 10 years exploration and 30 years production;
§ For most PSCs, the profit-sharing ratio is on a net income basis of 85/15
(government/ contractor) for oil, and 70/30 for gas.
(From H. Attwater's thesis, , 2001)
Mitsubishi announced the transfer of its 16% stake to this newly created joint venture in November 2001. The new company is based in Rotterdam, but the two shareholders - Mitsubishi and Inpex are both Japanese (Dow Jones Newswires 1/Nov/01)
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Jakarta Post [online],
November 29, 2001
JAKARTA (JP): Beyond Petroleum (BP) Indonesia and the state oil and gas company Pertamina have signed a contract with the Philippines for the supply of 1.3 million tons of liquefied natural gas (LNG) per year, a report said.
BP Indonesia spokesman, Sunarto, said as quoted by Antara in the Irian Jaya capital of Jayapura on Thursday that the LNG would originate from the Proyek Tangguh LNG field in Berauw Bay, Irian Jaya province.
He said BP Indonesia was also exploring the possibility of marketing LNG to China.
The British company was expected to start production in 2006, he said.
The LNG project covers the districts of Manokwari, Sorong and Fakfak.
Sunarto called on the local people and administrations to maintain security around the project, which is one of the province's sources of income, in line with the implementation of the law on regional autonomy.
The Jakarta Post.com,
Headline News - October 08, 2001
Moch. N. Kurniawan, The Jakarta Post, Jakarta
Indonesia, the world's largest liquefied natural gas (LNG) producer, is likely to expand its market in East Asia into the United States.
State oil and gas company Pertamina is currently negotiating with U.S. energy company El Paso Corp to sell Indonesia's LNG from Tangguh plant in Irian Jaya, to U.S. consumers.
Pertamina's upstream director Iin Arifin Takhyan said last week that Pertamina was considering taking LNG from Tangguh due to its shorter distance to the U.S as compared to other plants.
"We think we will take LNG from Tangguh because of the shorter distance," Iin said.
Indonesia currently has two LNG processing plants: one in Arun, Aceh province and the other in Bontang, East Kalimantan.
Currently, Pertamina, together with BP Indonesia, is developing a third LNG plant in Tangguh, Irian Jaya, which is expected to start production in the next couple of years.
BP Indonesia's vice president for government and public affairs Satya W. Yudha said his company supported Pertamina's move to market LNG from Tangguh to the U.S. in addition to China.
"We will support Pertamina in negotiations with El Paso," Satya told the Jakarta Post over the weekend, but refused to go into details.
El Paso is reportedly planning to build three LNG receiving terminals on the west coast of the United States, should it reach an agreement with Pertamina to get Tangguh LNG.
The company has turned to Indonesia due to its relatively low LNG prices. It will likely sell LNG from Tangguh to a number of power plants on the west coast.
Pertamina and BP Indonesia are currently gearing up marketing efforts to sell LNG from Tangguh to a number of countries, including the U.S. and China.
Pertamina has entrusted BP Indonesia to participate in an LNG supply tender in China's Guangdong province, where BP Indonesia's parent company BP Plc had won a tender to build an LNG receiving
terminal.
If BP Indonesia wins the tender in Guangdong, which will be announced in the last quarter of this year, the company will be required to supply the province with about three million tons of LNG per annum starting in 2005.
The Tangguh project will have two LNG processing trains worth US$1.5 billion, with a combined production capacity of six million tons of LNG per annum.
Natural gas to be processed by the Tangguh plant would be supplied from Wiriagar, Berau and Muturi production sharing contract blocks in Irian Jaya.
The blocks contain more than 14 trillion cubic feet of proven gas reserves.
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Petromindo, October 6, 2001
The Indonesian Environmental Forum (Walhi) filed on Friday an appeal against the South Jakarta District Court's decision over Walhi's legal suit against Freeport, Neraca daily reported on
Saturday.
Walhi contended that the court decision was not totally correct to answer its lawsuit on the rights over information, and therefore, the decision needs to be reviewed, according to Walhi deputy director Suwiryo Ismail.
The court in its verdict issued on August 28, 2001 accepted some elements of Walhi's lawsuit against Freeport but rejected some other elements. The court accepted part of Walhi's lawsuit that Freeport had acted against the law by giving wrong information regarding the fallout of its Wanagon overburden disposal site. Nevertheless, the court rejected Walhi's demand that Freeport make a public apology for the mistake.
The court also instructed Freeport to improve its efforts to minimize the toxic level of its overburden dumped at Wanagon, and therefore, it would not pollute water accordingly.
"I consider that verdict is not totally correct, and therefore it needs to be improved," Suwiryo said.
Nevertheless, in some cases, he agreed with the panel of judges that tried the case, especially on the issue of improving treatment over the toxic waste.
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The Jakarta Post.com. National News, November 23, 2001
The Jakarta Post, Jakarta
Multinational companies have the potential of abusing the basic rights of local people in their operational areas, mostly in the developing countries, amid the absence of a mechanism to hold them accountable.
In a public discussion held by the National Commission on Human Rights on the issue, rights activists pointed out that the companies' private status had given them impunity to avoidaccountability.
Institute for Policy Research and Advocacy executive director Ifdhal Kasim, told the discussion on Wednesday that the rights activists still focused on the state's accountability in thepromotion and protection of the people's rights.He said powerful multinational corporations had dominated the world's political and economic affairs while on the other hand the developing countries had no bargaining chips to control
the companies, making them prone to rights abuses.
Indonesian Forum for Environment executive Emmy Hafild revealed that several reports had shown that the existence of multinational corporations in developing countries had failed to increase local social
welfare.
"On the contrary, such companies promote collusive and corrupt practices and also human rights violations in the operational areas," she said.Coal mining company PT Rio Tinto Indonesia's external relations deputy director Anang R. Noor said that it was impossible for any companies to ignore human rights issues as rights abuses would only harm its
operations.
"Moreover, globalization makes it impossible for someone to evade legal proceedings," he said.
In the discussion, the activists called for a mechanism to make the multinational corporations be accountable for any human rights violations.
Ifdhal suggested broadening the scope of human rights laws to cover the
corporations.
He argued that the internal code of conduct established by the companies to control their relations with their surroundings and the employees could not be used as a mechanism to settle rights abuses because its implementation was optional.
Tutur Suwito of the Institute for Jakarta Labor said that the government should first determine the country's industrial framework which included the relations between investors, employers and employees."Such a framework will give the mechanism which will minimize possibilities of rights violations," he said.
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