Group 4 security company called in by Caltex in Riau

Down to Earth No 49 May 2001

The US-based oil company Caltex Pacific Indonesia has called in the international security firm, Group 4, to deal with problems at its conflict-ridden oil operations in Riau province, Sumatra.

Caltex, a joint venture between Texaco and Chevron, is Indonesia's biggest oil producer, with a current output of around 690,000 barrels per day.

During the past months the company's operations have been hit by strikes, protests over land, employment and environmental impacts (see DTE 48).

In late February a month-long occupation of the Kerang oil field in Rokan was ended after what a company spokesman described as "pressure" from security forces. Production at the field had stopped since February 8th. The protests prompted Caltex to call in Group 4. According to company spokesman Poedoyo Oetomo, oil field protection needs "special management" for which Group 4 has the experience.

The following month villagers from Air Jamban, Mandau district, took over an oil rig in the Duri field to protest against the company's refusal to pay compensation for land near its operations. A similar action involving hundreds of villagers was reported in the Bangko oil field in April. This followed an earlier incident in the same place in which a company pipeline was cut causing a major oil spill. Villagers had blockaded the area for almost one month, preventing operations in some of the field's 11 oil wells.

In April, a group of local youths seized company vehicles after failing to secure employment with Caltex.

Group 4 is a private company, formerly British-owned, but recently merged with a Danish company with its headquarters now in Copenhagen. Its Indonesian operations are run from Vienna. In February the company promised it would give priority to local people when hiring security staff for Caltex. According to human resources manager Adiette Soedarmo, 900 staff, formerly employed by PT Tripatra, started working for Group 4 from the beginning of February.

The company provides services to other companies in Indonesia in Aceh, Central Kalimantan, East Kalimantan and Java and operates in 50 countries worldwide.

In April DTE wrote to the company to enquire about its activities in Riau and raise concerns over human rights violations. No response has yet been received.

Struggle for control

Caltex's CPP oil block has been the subject of a protracted dispute between local and central governments, over who should operate the block once Caltex's contract expires later this year.

In April the provincial government was told it must settle for a 10% share in the block, rising to 15% over ten years, with state-owned Pertamina holding the remaining share. A separate report said Pertamina had approved Caltex's request to extend its contract for at least one more year. The company has claimed it needs a transition period so it can provide guidance to the new operators.

Caltex Indonesia's president Humayunbosha also said the company was conducting environmental studies to assess the damage caused by its operations in the area surrounding the CPP block. "We'll make sure we leave the area as clean as we when we entered it," he said.

Meanwhile, the provincial assembly in neighbouring North Sumatra has called on the government to investigate allegations of theft of oil from North Tapanuli district by Caltex. (Petromindo 10/Mar/01; 12/Feb/01; 5, 14-20/Apr/01)