Tangguh - ignoring the reality

Down to Earth No 65  May 2005

In February 2004, DTE took a detailed look at BP's controversial gas project in Bintuni Bay, West Papua. One year on, we ask how far concerns over human rights, security and local people's rights have been addressed.

The Tangguh gas extraction and liquid natural gas (LNG) installation in the Bird's Head region of West Papua got the final go-ahead from BP on March 7th. As a result, the area will experience massive social, environmental and economic changes. Despite company commitments to transparency, community development and human rights, the concerns over the impact of these changes are mounting.


Community statement

Concerns over adat (customary) land rights have been voiced by the indigenous Papuan communities who hold rights to the land being used for the Tangguh development. An August 2004 statement by the Soway, Wayuri and Simuna indigenous communities called for a halt to project activities until problems have been addressed. The statement reminds Indonesia's oil and gas regulatory body (BPMigas) that 50 hectares of land taken for the Tangguh project remains the property of the Soway clan. The statement signatories say there is nothing on paper to say that there was a "voluntary" handover of land belonging to all three communities in 1999. They also state that the land acquisition process was not legally valid "because it did not reflect whatsoever the value we place on land as a source of livelihoods which has been handed down to us through the generations".

The statement continues:

"...So far, the presence of the Tangguh project has only caused conflict between communities, and the social disadvantages have outweighed any advantages. We ask that all activities on our customary lands be stopped as from the date of this statement until the problems have been fully addressed..." (see translation of full statement).


Civil society letter

On December 8th 2004, three hundred NGOs and individuals - including many Papuans - felt sufficiently worried about the impacts of the project that they wrote to BP's chief executive, Lord Browne, urging him not to give final approval for construction until concerns over human rights, transparency and Tangguh's wider political context had been addressed. The letter, which was also signed by Down to Earth, shows that fears over the project becoming a focus of human rights violations against local people, have not been allayed.


Wider context

Leading Papuan human rights advocate, John Rumbiak, has repeated calls for Tangguh to be considered in the wider political context. "BP knows recent political developments have made West Papua a time bomb. But George Mitchell of TIAP [Tangguh Independent Advisory Panel - see box, below] and BP itself are ignoring the reality of the wider political context and not using their influence positively with the Jakarta government to improve the situation." (Tapol Press release 8 December 2004)

The wider context for Tangguh includes a serious human rights crisis in the central highlands, political confusion over West Papua's status as one, two, three or even five provinces (see below); violent suppression of any peaceful opposition to Indonesian rule and a growth in anti-independence militias supported by the military. International funding for humanitarian programmes and Special Autonomy are reported to have been used for military operations, while there are plans to bring thousands more troops to the area over the next few years (see also below). International attention has been drawn to an exposé of widespread official involvement in the rampant illegal logging and log smuggling trade in Papua (see separate article).

The military special forces' (Kopassus) campaign of killing, wounding and destroying homes and crops in the highland Puncak Jaya area, which began last year, led to over 6,000 villagers taking refuge in the forests. Reports of many deaths from starvation and sickness have been filtering out of the region, where church humanitarian workers and journalists have been denied access. In March, UK-based human rights organisation Tapol received a handwritten list of fifty three people, aged from 15 to 89 years, who had died in the forest (see Tapol Bulletin 178:18 for a fuller account of the situation).

A December appeal by a Coalition of West Papuan church, human rights and students organisations and tribal councils reported how attacks on police officers had been orchestrated by Kopassus operatives who had infiltrated the OPM, Papua's pro-independence organisation.

"Increasing militarization, coupled with human rights abuses and unmet demands for independence, have turned Indonesia's easternmost province into a time bomb waiting to go off", warned the coalition.

The groups asked for international support to urge President Susilo Bambang Yudhoyono to halt the operation, allow proper investigation into the recent spate of killings, allow emergency relief to be provided to the refugees and their return to their villages without fear of reprisal. The appeal also called for Indonesia's human rights commission to be permitted to investigate the military's excesses and for concrete policies, including a withdrawal of the massive troop presence in Papua and dismantling the militias (Appeal, 21/Dec/04, via email).


TIAP accused of playing down rights abuses, former BP vice-president joins the critics

The BP-appointed Tangguh watchdog, TIAP (the Tangguh Independent Advisory Panel) has been criticised for paying scant attention to ongoing human rights violations by the Indonesian security forces.

At a March 2005 London meeting with investment fund managers, NGOs and other concerned individuals, the team was also criticised for ignoring West Papua's biggest unresolved political problem: the fact that Papuans were denied the right to self-determination under the fraudulent 'Act of Free Choice' in 1969.

The TIAP team - US Senator George Mitchell, Rev. Herman Saud from West Papua, Sabam Siagan, a former Indonesian Ambassador and Lord Hannay, from Britain - presented the findings from their third visit to Tangguh, in December 2004. BP has given the team the task of investigating and reporting on the non-commercial aspects of Tangguh.

The TIAP report points to what it considers to be positive developments in military reform, while mentioning operations in the Central Highlands that have led to "allegations of excessive violence against civilians". It refers to the statement by president Susilo Bambang Yudhoyono, reported in the press, instructing the TNI that "the operation should be conducted wisely and carefully, and that the people should not suffer from excesses" (TIAP p11).

At the London meeting, Richard Samuelson, of the Free West Papua Campaign, criticised the failure of BP and TIAP to acknowledge the scale of atrocities suffered by Papuans in the Central Highlands. He unfurled a Papuan morning star flag to demonstrate political oppression in the territory. In December last year, two Papuans - now Amnesty International prisoners of conscience - were arrested for raising the flag in the Papuan capital, Jayapura. Filep Karma and Yusak Pakage were also beaten up and are now on trial for treason. Samuelson said that BP and TIAP were not being open and honest about the true context of the Tangguh project.

Former vice-president of BP Indonesia, John O'Reilly agreed with the Free West Papua campaigner, adding that BP would be guilty of 'the complicity of silence' if it stood by and did nothing about the wider human rights abuses.

O'Reilly, who left the company in 2003, was a signatory to the letter calling for a halt to the Tangguh project until concerns over security and human rights had been dealt with (see letter). The letter was copied to TIAP prior to its visit, but the panel's report makes no reference to the concerns raised. The letter contradicts TIAP's overall view that, despite "uncertainties, questions and tensions" among some of the affected people, "there is a substantial consensus that Tangguh will benefit the local communities and is good for Papua generally" (TIAP p2).

BP staff at the meeting appeared to be shaken that one of their former colleagues was speaking out so strongly against them. On top of that, TIAP member Reverend Saud - the team's only Papuan - responded by stating that the US, UK and Dutch governments do not respect the Papuans, but were only interested in Papua's gold, timber and oil. However, he added that he hoped for positive changes under the new president.

The TIAP report itself, while indeed failing to consider the wider political context in Papua, is critical of some aspects of the Tangguh project itself. The team displays some impatience with BP for failing to address problems pointed out in the first and/or second reports. These include: the need to address rising tension in villages on the north shore of Bintuni Bay, who are seeing most of the benefits being given to the south shore communities; the lack of communication about the project to people in the region; and the delay in revenues flowing into the region, until some years after project start-up and the possible negative impact of a sudden influx of cash thereafter. TIAP states again that finding a way to smooth the revenue flow is a priority. See Tangguh Update for more on these points.

The 2005 report by JATAM's regional representative finds that TIAP fails to address the fundamental problems affecting the communities in the project area. These include land, the deaths of infants in a north shore village in 1996 (see DTE 50) and environmental threats. It is also critical of TIAP's own lack of communication: its reports are never given to local communities. TIAP is considered the same as other BP teams who come and ask questions then go away again and the community doesn't know what happens as a result.

(Source: notes by Hugh Dowson, Independent Researcher, and Richard Samuelson, Free West Papua Campaign. The TIAP reports, and BP's responses to them, are on the BP website at: www.bp.com/genericarticle.do?categoryId=2011067&contentId=2019320; JATAM report: Brief Report Proyek Tangguh dan Isu Hak Asasi Manusia Teluk Bintuni, West Papua, Bustar Maitar, 2005).


Security and human rights at Tangguh

One of the major concerns with the Tangguh project is whether its community-based security strategy, which uses locally recruited security guards, can effect a clean break with the way things usually work in Indonesia and West Papua. NGOs and others have repeatedly focused on the project's relationship with the security forces and in particular the military (TNI). In other resource extraction projects, such as the notorious Freeport/Rio Tinto copper and gold mine, also in West Papua, and ExxonMobil's gas installations in Aceh, the operating company typically makes payments and/or provides equipment, buildings, transport etc to security guards drawn from the military or police. Previously, the military insisted that it had a legal obligation to guard projects classed as "vital national assets" but, under recent reforms, this is no longer the case.

Such security arrangements have provided lucrative business opportunities for a military that relies on extra-budgetary financial revenues to cover an estimated 70% of its needs. The TNI is widely known to provoke unrest and violence in order to justify its presence in conflict zones such as Aceh and West Papua and create the need for tight security at foreign-owned projects. Evidence of this in the case of Freeport has emerged from investigations by the human rights group ELSHAM. These indicate that military involvement in the killing of three Freeport employees in 2002, may well be linked to the fact that the company had stopped making monthly payments (amounting to US$5.6 million that year) into the personal account of the regional military commander, Maj. Gen. Mahidin Simbolon, before the attack. (www.greenleft.org.au/).

The conflicts also guarantee a strong military presence in resource-rich areas like West Papua and Aceh, where military-owned business empires can be nurtured - to the disadvantage of the local economy. (See for example TNI involvement in logging in West Papua, separate item, below, and DTE 55).

The entrenched position of the military leaves very little room for new approaches like BP's community-based security strategy, which largely excludes the military from security arrangements and allows for TNI assistance only as a "last resort" at the coordinated request of BP security and the Papua police (see TIAP report 2005, p24). This point was put to BP earlier this year by Uwe Hummel, of the German West Papua Network, who said that the TNI had "no other way to go" than to create such an insecure situation that BP is obliged to call for its assistance at Tangguh.

The BP-appointed Tangguh Independent Advisory Panel (TIAP - see box above) presents an optimistic view of the security situation. It notes that the military reform law passed at the end of former president Megawati's administration requires that the TNI divest itself of all its business activities within 5 years and excludes the guarding of vital national assets from TNI core functions. While casting doubt on whether this will happen in the allotted time, TIAP welcomes this as a positive development*.

TIAP panel chairman, US Senator George Mitchell, stated that BP's security strategy was now "official" and that it had been accepted both by the TNI and the police. However, the military have proven to be far more circumspect than the police in signing up to any formal agreement.

* A BBC News Report (12/Apr/05) refers to an announcement which appears to bring forward the 5-year deadline. Military chief Gen Endriartono Sutarto said the military would be closing down all its business ventures within 2 years i.e. 2007. However, earlier, TIAP panelist Rev. H Saud said the TNI would still be allowed to retain their interest in "small" companies.


Police Agreement already broken?

In April last year, the police agreed to a Letter of Joint Decree concerning Field Guidelines for the Implementation of the Joint Security Measures within the Work Area of the Tangguh LNG Project. The Field Guidelines were eventually made public, following civil society pressure. They commit both BP security and the Papua police to upholding human rights principles and to solving problems without resorting to violence or intimidation. The Field Guidelines incorporate the standards of the Voluntary Principles on Security and Human Rights and the 1990 UN Basic Principles on the Use of Force and Firearms by Law Enforcement Officials*.

The Field Guidelines are supposed to exclude the police from guarding the project, unless they are called in at the request of BP security, when a "dangerous situation" arises. However, a 2005 report by the regional representative of Indonesia's mining advocacy network, JATAM, says that there are already two policemen at the Tangguh base camp - a fact which apparently already contravenes the agreement. This report also highlights plans to place police and Babinsa (non-commissioned village military officer) in Saengga village itself. A police post has already been completed, but is not yet operational. The plan is being initiated by BP, on the grounds that there is an increase in drunkenness in the village which is disrupting BP's activities. The plan is opposed by almost all villagers, who believe they can resolve village problems by themselves and don't need to invite outsiders to get involved in village affairs (police from the nearby town of Babo have already been called in several times). Alcohol was available in the village before the project started. However, its use has increased since, as more money has come into circulation. It is brought in from an oil palm transmigration site and on ships delivering goods to the Tangguh base camp. According to the report, the higher levels of drinking are triggered by dissatisfaction with the company's unfulfilled promises.


*These instruments can be viewed at www.state.gov/g/drl/rls/2931.htm and www.unhchr.ch/html/menu3/b/h_comp43.htm.

For the Field Guidelines agreement itself, see www.bp.com/liveassets/bp_internet/globalbp/STAGING/global_assets/downloads/T/Tangguh_Field_Guidelines_BP_Papaun_Police.pdf  for English version and www.bp.com/liveassets/bp_internet/globalbp/STAGING/global_assets/downloads/T/Tangguh_Field_Guidelines_BP_Papaun_Police_Bahasa.pdf for Bahasa Indonesia version.


East Timor connection

Papua's police chief is now Brig. Gen. Dodi Sumantyawan, who replaced Col. Timbul Silaen in October 2004. NGOs have criticised BP's negotiations with Silaen, who was in charge of police operations in East Timor in the run-up to the August 1999 referendum, when military-backed militias were permitted to terrorise the East Timorese. Campaigners believe that by signing the security agreement with Silaen, BP has already broken the Voluntary Principles, even before the project has got off the ground. This is because the Voluntary Principles state that "individuals credibly implicated in human rights abuses should not provide security services for the Corporation." And there is no question that Timbul Silaen is such a person: he has been indicted on crimes against humanity charges by a UN-backed tribunal in East Timor.

His replacement served as Aceh's police chief in 2000 in a period of escalating violence, despite the so-called 'humanitarian pause' agreed between the Indonesian government and the Free Aceh Movement

A 2004 human rights and security review co-authored by Gare Smith (the US expert who carried out an initial human rights impact assessment of Tangguh in 2002) points to the fact that the Field Guidelines are the first case of the Indonesian government committing itself to abiding by the Voluntary Principles. It notes, however, that BP faces a number of "significant legal and reputational risks related to security and human rights issues". These include the fact that the police's agreement to implement the Voluntary Principles will be of limited value unless police personnel receive effective education and capacity-building to implement the principles. The report recommends that BP should work with the police and other potentially interested parties, such as the International Committee of the Red Cross (ICRC) and Indonesia's national human rights commission, Komnas-HAM, to ensure that such training is carried out. (Summary Analysis of Human Rights and Security Review, by Tony Ling, Security Consultant to BP/BTC, Gare Smith, Foley Hoag; see also DTE 57 on the 2002 Human Rights Impact Assessment).

TIAP points out that the establishment of West Irian Jaya province (see below) has implications for Tangguh security, because there is likely to be a new regional police command in Manokwari which will take over from the Papua regional command in matters related to the BP project. The team says that BP must take the necessary steps to guarantee that any new police command adopts the Field Guidelines agreed with the Papua police. BP's response states that discussions of a new police command remain speculative and that, as informed by the police, the agreement is binding on the new command.


Who will pay?

The Guidelines provide for all costs, payments and provision of supplies to be open and transparent with either side permitted to disclose the information publicly. According to the TIAP report, if BP requests security assistance from the Papua police, costs may be recovered from Indonesia's state oil and gas regulatory body, BPMigas. "In no circumstances will BP provide or pay for any weapon, weaponry, ammunition or any funding that supports the procurement of these items". In other words, the police will still benefit from being called in to deal with a security disturbance; they just won't be paid directly by BP.

TNI support?
As for the military's commitment to the community-based security policy, TIAP reported a discussion with Papua's regional commander [Major General Nurdin Zainal] as follows:

"While pointing out that Tangguh is a vital national Project [there was some doubt over the project's status previously], he described principles of integrated community based security as the new mechanism for security at projects like Tangguh. He made it clear that there would be no TNI forces stationed at or in proximity to Tangguh and that TNI involvement would occur only as a last resort if BP internal security and the Papua police requested assistance. In his view, there are no security problems in the Bintuni Bay area at this time but he expressed concern about possible future provocations to indigenous people from in-migration during the period of construction or production." (TIAP, p25).

Undermining this assurance from the TNI regional commander is the fact that the military have been active in the area - for example in April last year, when TNI personnel killed four Papuans in Meryadi village, just 20km from Tangguh (see civil society letter). Moreover, a new district military command is likely to be set up soon in the town of Bintuni, following the establishment of the Bintuni Bay area as a new district (kabupaten) in 2003. There are currently ten district military commands (Kodim) in West Papua, the nearest to Tangguh being in the towns of Manokwari, FakFak, Nabire and Sorong.

Troop numbers in West Papua overall are due to increase substantially over the next few years. Plans announced in March include establishing a third division of the army's Strategic Reserve Command (KOSTRAD) in Sorong. The new KOSTRAD division will mean an increase of 12,000-15,000 troops in the 2005-2009 period. According to one estimate, this means an almost 50% increase in current troop numbers in Papua to 50,000 men. The Indonesian NGO, Solidarity for Papua, has publicly protested against the planned increase in troop numbers, saying that this will work against civil society's `Zone of Peace' initiative for Papua (SNUP Press Statement, 29/Mar/05,WestPapuanews.com 22/Mar/05).

The commander's concern about in-migration could also be read as a threat, given that the military are known to be supporting provocation in the form of militia groups, which recruit non-Papuan Muslims and inflame religious and ethnic tensions. Just six years ago, in East Timor, similar, military-funded militias were involved in the butchering of hundreds of East Timorese civilians following the referendum which led to the territory's independence from Indonesia.

* * * * * * *


on BP's contract with the Indonesian government....

"BP derives its authority to act from an occupying power in the midst of an attempted genocide. How credible then, are its claims that its hands are clean?"

(George Monbiot,' In bed with the killers', Guardian 3/May/05)

Given the past record of the Indonesian military and police in Papua, it is not surprising that many Papuans and NGOs remain deeply sceptical about a community-based security strategy at Tangguh. How can the military be trusted to act with restraint in one part of Papua, when the same commander is presiding over the slaughter of civilians in another? TIAP (and BP) may well find that it is testing this strategy at the expense of people's lives.

How much information? What has and hasn't BP disclosed?

BP prides itself on its transparency, but exactly how much information does the company really share with the public - in West Papua, Indonesia and internationally?

TIAP reports: BP posts these on its websites, in Indonesian and English versions - see http://www.bp.com/genericarticle.do?categoryId=2011067&contentId=2019320. However, key documents appended to the 2002 TIAP report are not available on the site. These include charts predicting revenue flows, showing that the lion's share of income from Tangguh will flow to Indonesia, not Papua.

Contracts: BP has not made public its production-sharing contracts for the three gas blocks, despite repeated requests from stakeholders. The company says it has not yet done so due to "business confidential provisions" and needs to explore with the Indonesian government what can be published. Contracts for BP projects in other countries have been made available.

Human Rights Impact Assessment (HRIA), 2002 and subsequent human rights and security reviews: only summaries of these have been made available, despite requests from NGOs for full publication.

BP's responses to TIAP and HRIA: these are published in full, but, since these sometimes allude to points in the unpublished original reports, questions remain as to their value.

AMDAL (Environmental Impact Assessments): these have been made available upon request to BP, but are not currently downloadable from the BP website.

Agreement with police: this was made available after NGOs pressed for its publication. Links to versions in English and Indonesia are posted on the Tangguh page of BP's website, www.bp.com


BP ranks low in transparency report
A 2005 report on revenue transparency places BP's Indonesia operations in a poor position. The report, by Save the Children UK, provides information on the performance of a range of companies in several countries, including Indonesia. BP, which has gas operations in Java as well as West Papua, ranks 11th out of 15 companies researched, falling below fellow oil companies Unocal, ExxonMobil and Premier.

The best performance in Indonesia is by Canadian company Talisman which, according to the report, "is clear evidence that disclosure of revenue payments is possible in Indonesia." This undermines BP's arguments that the publication of revenue sharing in its contracts is limited by business confidentiality provisions.

(Beyond the Rhetoric, Measuring revenue transparency: company performance in the oil and gas industries, Save the Children, 2005, is downloadable from www.publishwhatyoupay.org/)


Special autonomy and 'West Irian Jaya'

The uncertainty over the official status of Papua as one, two or three provinces, has been further muddied by the Indonesia's Constitutional Court. In October last year the court ruled that former president Megawati's Presidential Instruction, dividing Papua into three provinces was unconstitutional because it violated the decision-making mechanism included in Papua's Special Autonomy law. However, the court decided that, since the province of West Irian Jaya had already set up its administration and elected representatives to the national parliament, it should remain in existence. In 2003 the inauguration of a 'Central Irian Jaya' province had to be abandoned due to violent clashes which left several people dead.

The new situation, which is still contested by many Papuans, has several implications for Tangguh, since the project lies in the newly-created West Irian Jaya province. In 2003, before Susilo Bambang Yudhoyono gained the presidency, he assured the TIAP panel that Special Autonomy would be fully implemented in Papua. It remains to be seen whether he will keep his word. If Special Autonomy is fully implemented, the questions remain: will it be applied to West Irian Jaya as well as to Papua and will West Irian Jaya have its own Papuan People's Assembly (MRP)? The MRP is one of the key provisions for Papua under Special Autonomy. It is due to be elected late in 2005 and will be made up of one third adat (customary) leaders, one third religious figures and one third women. It will have limited powers, including the responsibility to consider and approve any proposed further division of West Papua*. The TIAP report notes a "clear intention" at presidential level to apply Special Autonomy "fully but separately" to West Irian Jaya, adding that new legislation will be needed and that any need for parliamentary approval will create further uncertainty about the outcome (TIAP p10).

Another key concern is how the revenues from Tangguh will be shared out under a divided Papua. If West Irian Jaya, as a province, is now entitled to all the provincial revenue flows - and this is 70% under Special Autonomy - this will mean a massive influx of cash into a much smaller area than if the revenues were going to benefit the whole of Papua. TIAP warns that this could lead to tensions between different parts of West Papua - see also Tangguh Update.

*See Watch! Indonesia 4/Mar/05 Ungracious Reception of SBY's Kado Natal for Papua for a detailed analysis of the MRP in the current situation - watchindonesia@snafu.de


Environmental impact in the global context:

Against a background of global warming, rising sea-levels and unpredictable weather patterns, BP's continued exploitation of fossil fuels - including Tangguh's gas - is anything but environmentally and socially responsible corporate behaviour.

The company admitted an increase in its own production of greenhouse gases in 2004 to more than 85 million tonnes, up from 83.4m tonnes in 2003. This output is roughly twice that of Argentina. Use of BP's petroleum products by customers generated an additional 1.376 billion tonnes of greenhouse gases - around 5% of global greenhouse emissions. "BP also says it has increased its oil and gas extraction for the 12th consecutive year, how on earth is that compatible with its commitment to climate change?" said Friends of the Earth campaigner, Hannah Griffiths.


Health and safety, record profits
BP's international health and safety record leaves a lot to be desired too: the 11 deaths of employees and contractors in accidents included in a BP report for 2004 were more than doubled by the 15 workers killed in an explosion at the company's Texas City refinery in the US. A company report also showed a 50% rise in the amount of oil that BP spilled to 5.7m litres (Guardian 12/Apr/05).

Protesters occupied trees outside BP's London headquarters in April, in protest at the company's environmental and social record. The same day, the company announced its highest ever profits - $5.5 billion for the first 3 months of 2005. The protest, by members of London Rising Tide, was against BP's impact on climate change, the company's reported connections with death squads in Colombia, its efforts to gain access to Iraqi oil reserves, and the 'environmental timebomb' of its Baku-Tbilisi-Ceyhan Caspian Sea pipeline (LRT press release, received April 26, 2005).