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Asia Pacific Program Radio Australia Melbourne, Australia September 19, 2002

A prominent Australian scientist, who spent many years doing research in Papua and in neighboring Papua New Guinea, says he believes the killings last month at the U.S.-owned copper and gold mine, Freeport, will be a turning point in already strained relations between the United States and the Indonesian military. He says America's new Corporate Fraud Law, introduced after the collapse of Enron and WorldCom, may have an indirect impact on relations between the mine's owners and the Indonesian military which protects the mine.

Presenter/Interviewer: Tricia Fitzgerald

Speakers: Professor Tim Flannery, the Director of the South Australian Museum

FLANNERY: "In 1995 there was real conflict between the Indonesian military, the mine and the local people in the area, and a church service was held in the village of Banti, just about 500 meters (1,650 feet) from the edge of the mine compound on a Sunday morning. The Papuan flag was raised at that meeting and the Indonesian military -- my understanding as well was that some Freeport security staff were involved -- went down and opened fire on people in the church and seven people were killed, including the pastor and several women and children. And when I arrived about I suppose eight months later, I was shown the spots on the road where people had been shot down."

FITZGERALD: So that's 1995. Do you think that is typical of the history of this mine?

FLANNERY: "I think it's typical of the history of West Papua since 1969 and it's difficult for me to know the details of what happens in terms of mine politics, particularly relating to the military. But it seems to me there is a very strong link between the military and the mine. I know that for example Freeport has been accused in a board holder’s meeting of spending 35-million dollars on infrastructure for the Indonesian military, and this was something that was disputed by shareholders in the company. So that I think is some sort of indication there's a link there."

FITZGERALD: And you mentioned that recent developments in American corporate law and accountability have created a ripple on effect in very far away West Papua. Can you explain the link? What were those changes in American law and how has that affected what's going on in Freeport?

FLANNERY: "Well following the Enron collapse, my understanding is that new legislation has been passed in the States which demands that CEO's of large companies sign off on the accounts, that these are true and correct reporting of the accounts of the company."

"In the case of Freeport, it's been alleged, that there's been payments to the Indonesian military on a rather large scale, millions of dollars. Of course, those laws about corporate accountability are really incompatible with those sort of payments. So again it's been alleged that has caused conflict between the Indonesian military and the Freeport mine because the Indonesian military have been virtually hung out to dry so to speak. You know the money that they've been getting now for 30 odd years, the flow has stopped."

FITZGERALD: So you feel this change of corporate law in America's had a flow on effect. Is it virtually reckoning time for big American companies that are operating in Papua? You're saying to become above board and show these records, and it also could have a flow on effect with U.S.-Indonesian military ties, which are at present suspended.

FLANNERY: "The murder of two Americans and one Indonesian some week or so ago now on the road leading to the Freeport mine I think is a dire test of relations between the Indonesian military, the American government and the Freeport company, because it's disputed as to who did those murders.

"One line that's pursued by various people is that it's the OPM, and if that's the case then the Papuan independence movement is in a state of really dire trouble because they've murdered American citizens and I don't think they'll be readily forgiven for that. Another line is that the Indonesian military were behind these murders because they weren't being paid their money that was made available to them for many years previously and that this was an attempt to threaten the company.

"Now it's interesting to me that in the car immediately behind the car that was being driven by the murdered people was the operations manager for the mine. So he and his wife came across these dead and dying people on the road and yet weren't shot at, which is an interesting thing.

"The police who have investigated the murders have been shot at in their cars and three bombs were placed under a bridge leading to the mine. Now my knowledge of the OPM is far from complete, but I would be astonished if they would shoot at police investigating this matter or if they had the capacity to make bombs of any sophisticated nature. Time will tell as to what's happening here, but the point is if the Indonesian military have murdered American citizens then I think it would be very, very difficult for the American government to reestablish links with the Indonesian military. This really is a key moment in my thinking as to which way things will go in West Papua. And the American government will have to really decide which side of this question it comes down on."

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