Washington May Face Rights Test in U.S. Firm’s Indonesian Operations

This is a story of how Washington deals with the Other Asia, the one often forgotten these days. It is a story of death and torture, of jungles, gold and the Washington bureaucracy.

Americans are fascinated with modern Asia, the zippy world of cellular phones, business suits and discotheques. But on the margins, there are areas of the continent that are still part of the Third World. The Other Asia has more in common with the novels of Gabriel Garcia-Marquez and Joseph Conrad than with the tickers of the Hong Kong Stock Exchange.

The Other Asia can be found in Irian Jaya, the Indonesian province that makes up the western half of the island of New Guinea. It is a land of rain forests and 15,000-foot mountains, with almost no roads or telephones.

For more than two decades, Irian Jaya has been the site of a huge mining operation by a New Orleans-based company, Freeport-McMoran Copper & Gold Inc. Freeport-McMoran is the largest single American investor in Indonesia, with a market capitalization of $5 billion.

Freeport-McMoran’s Grasberg mine, high in the Irian Jaya mountains, is said to have the largest gold reserves in the world. Gold is merely a byproduct of the company’s copper operations; Grasberg is among the world’s largest copper mines too.

But Freeport-McMoran’s mining operations have not gone unopposed in Irian Jaya. Some native peoples, members of the Amungme tribe, have complained that their lands are being taken away for mining. In addition, WALHI, a leading Indonesian environmental organization funded by the Ford Foundation and the U.S. Agency for International Development, has complained that Freeport-McMoran is dumping toxic tailings from its mining operations into Irian Jaya rivers. Freeport-McMoran officials have said the tailings are not toxic.

Indonesia has a strong military presence in Irian Jaya because of a growing population and “the vital economic importance of the [Freeport-McMoran mining] operations,” according to a company press release. The American firm emphasizes that it has no control over the Indonesian troops, although it does provide food, shelter and transportation for the government’s security operations.

Last November, the Indonesian military increased its presence on Irian Jaya because of what Freeport-McMoran said was the shooting of one of its Indonesian road-maintenance employees by unknown assailants.

What followed between Indonesian troops and Irian Jayan residents was terrifying. It has been documented in two reports, one in August by the Catholic bishop for Irian Jaya and the second last month by Indonesia’s Human Rights Commission.

After interviewing 40 witnesses, the Indonesian commission, whose members are government-appointed, found that 16 residents of Irian Jayan villages have been killed and that four others have disappeared.

The Indonesian government commission concluded that over the last year, there have been “indiscriminate killings, torture, unlawful arrests and arbitrary detention, disappearance, excessive surveillance and obvious destruction of local residents’ property by elements of [the] security apparatus.”

These abuses by the Indonesian troops took place, it said, as part of military operations aimed both at a rebel group, the Free Papua Movement, and “in the framework of providing security for the mining effort by PT Freeport Indonesia.”

The Catholic bishop’s report said those who died, and others who were released, were tortured during interrogation. It said the victims were kicked in the belly, chest and head by people wearing army boots; beaten with rifle butts; forced to kneel with iron bars behind their knees, and shackled by the thumbs, wrists or legs.

“The torture was conducted in Freeport containers, the Army Commander’s Mess, the police station and the Freeport security post,” Bishop Herman Munninghoff wrote in his report.

In a written statement, Freeport-McMoran replied that 11 of the deaths occurred more than 50 miles from its mining operations. While the other deaths took place inside its work contract area, the company said it did not control the facilities in which the incidents took place.

“The shipping containers . . . were storage vessels that the Indonesian military had requested several years ago for storage of material goods,” the company said. “The use of these containers for any other purpose was without the knowledge of [Freeport-McMoran].”

Over the past few weeks, these seemingly remote events have caused some reverberations in Washington and inside the U.S. government.

In early September, Freeport-McMoran moved to weaken one of the company’s Indonesian critics. A top official formally asked the U.S. government to cut off funds to WALHI, the Jakarta-based network of environmental groups.

Over the last 11 years, the Agency for International Development has provided $1.1 million to WALHI. An AID spokesman said the funds are part of a broader effort to promote a civil society and a growing middle class in Indonesia.

But Paul S. Murphy, executive vice president and director of Freeport-McMoran’s Indonesian subsidiary, urged in a letter that the funds be stopped because WALHI has been organizing protests against the company and has filed a lawsuit against it. Murphy also complained that WALHI “has openly affiliated itself with radical international [groups] such as Earth First!, Friends of the Earth, Global Response and Greenpeace.”

This effort apparently failed. An AID spokesman said the U.S. agency has decided to give the Indonesian environmental group another $250,000 for work over the next two years.

Meanwhile, Freeport-McMoran officials have been making the rounds in Washington, trying to limit the impact of the upheavals in Irian Jaya.

The company has some well-connected friends to help out. In particular, one of the members of the board of Freeport-McMoran is former Secretary of State Henry A. Kissinger. The company pays Kissinger Associates a retainer of $200,000 a year in consulting fees. In addition, a company spokesman said, Freeport-McMoran pays Kissinger himself additional money, totaling $400,000 in 1994, for consulting and advisory services.

Kissinger has called the State Department on behalf of Freeport-McMoran’s chairman, James R. Moffett, as Moffett has sought appointments in Washington. Asked about this, a company spokesman replied: “We do not comment on meetings we may or may not have had with government officials.”

One reason Freeport-McMoran officials seem to be worried is that the company gets some help from the federal government and does not want to lose it. The Overseas Private Investment Corp., the federal agency that provides risk insurance to American companies doing business abroad, insures Freeport-McMoran’s Indonesian operations for $100 million, according to an OPIC spokesman.

The federal law for OPIC calls on the agency to take into account “respect for human rights” in its insurance programs. The law also says OPIC should refuse to reinsure a project that “will pose a major or unreasonable environmental, health or safety hazard.”

On Thursday night, Indonesian President Suharto stopped in Washington for a dinner in his honor to benefit CARE, the relief organization. Moffett hosted the dinner.

The next morning, Suharto called on President Clinton at the White House. A press release said that the talks focused on lofty subjects, including the Asian economy. But a senior Administration official acknowledged afterward that Suharto urged Clinton to make sure OPIC insurance would be preserved for Freeport-McMoran’s Indonesian mining operations.

Clinton told the Indonesian leader that the White House would not get involved and would leave the Freeport-McMoran decision up to OPIC. “This is something that is going to be decided on the merits,” the Administration official said.

One hopes so. But in Washington, the Other Asia is a long way away, and private lobbying is everywhere. OPIC’s decision will be an interesting test.