Thursday, July 16, 2009

Freeport shootings & "security money"

Responding to shootings in Freeport Indonesia, military quickly pointed their fingers to Free Papua Movement (OPM). Others, meanwhile, pointed to rivalry between Indonesian military and police over "security money". 
Defense minister Juwono Sudarsono was wise enough to say, "we have yet to know the perpetrators of the attacks, whether they are the separatist OPM, military personnel, or others. Therefore we need to have results of an investigation into the case and further information," Juwono is quoted by Antara on Wednesday.
Three persons, including one Australian, had been killed in the shootings (three consecutive days). On Wednesday, five police reportedly wounded when a unit were sent to comb the road near the mining site were ambushed. The unit was sent to clear the area of security threats before the secretary of coordinating minister of politics, law, and security Lt. General Robert Romulo inspect the area.
Human rights activists don't buy military's theory. They even suspected the shootings were related to rivalry between police and military over "security" money from Freeport. 
Freeport McMoRan (FCX) controls 90.64% shares in PT Freeport Indonesia (PTFI), with the remainder controlled by Indonesian government. PTFI sold 369 million pounds of copper (US$664 million) and 521,000 ounces of gold (US$470 million) in the first quarter 2009. It is a 10% higher than Q1 2008 (copper = US$790 million, gold = US$234 million). SO, PTFI contributed to 43% of FCX's total sales revenue in the first quarter 2009. 
FCX expects Indonesia sales of 1.3 billion pounds of copper and 2.2 million ounces of gold for the year 2009, compared with 1.1 billion pounds of copper and 1.2 million ounces of gold for 2008. Assuming average price of US$2 per pound of copper and US$900 per ounce of gold, PTFI's sales revenue this year would reach US$4.58 billion.
Freeport paid Indonesian military US$5.6 million to protect employees at the copper and gold mine in 2002, US$4.7 million in 2001. But every time, military denied that it ever received the money or it was steel receiving payments from Freeport to provide security.
Koran Tempo quoted Usman Hamid from KONTRAS warned officers not to issue allegations easily on OPM. He said there are some motives, including "business competition" between military and police for "security money" from Freeport. "Since 2003, police controls the security money," Usman said.
Poengky Indarti, director of Imparsial, echoed Usman. But police immediately dismissed the "business competition" motive behind the shootings. Well, pecunia non olet (money does not smell until it is touched).

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