[Marinir] Indonesia Digest No: 29.05 ; 17-08-2005

[Yap Hong Gie]

INDONESIA DIGEST
Indonesia's complex Issues in a Nutshell
By: Ms. Wuryastuti Sunario
Published by: TBSC-Strategic Communication
No.: 29.05 - Dated:  17 August 2005

Dirgahayu Republik Indonesia:  17 Agustus 2005
Happy Independence Day:  17 August 2005

In this issue:

MAIN FEATURE:

PEACE IN ACEH :
INDONESIAN GOVERNMENT AND GAM REBELS SIGN PEACE ACCORD

NEWS AND BACKGROUND:

1.      Tourism and Transportation:
Departments of Culture and Tourism, and Department of Transportation,
Senior Officials installed Airport Tax up 50% from mid-August

2.      Science, Culture and the Environment:
Indonesia-Malaysia attempt to douse Forest Fires

3.      The Economy, Trade and Industry:
·     Government and Sinopec Sign MoU for Oil Refinery
·     ConocoPhillips Wins Exploration Rights

-------------------------------------------------------------------

MAIN FEATURE:

PEACE IN ACEH :
INDONESIAN GOVERNMENT AND GAM REBELS
SIGN PEACE ACCORD

Heralding a promise for lasting peace in Aceh  - Indonesia's restive, 
northern-most province on the island of Sumatra, -  Indonesian Minister for 
Law and Human Rights, Hamid Awaluddin signed a Memorandum of Understanding 
for Peace with self-proclaimed Prime Minister of the Aceh GAM rebel group, 
Malik Mahmud, on Monday 15 August, in far away Helsinki, Finland.  The 
signing came after months of tough negotiations and three decades of 
fighting during which time many innocent people and many military personnel 
were killed. Then, as a final blow came the giant tsunami last December that 
devastated large parts of Aceh, sweeping away thousands.

Recorded by TV stations around the world, the signing ceremony was witnessed 
in Jakarta by President Yudhoyono and Members of Parliament at the 
Presidential Palace through tele-conference facility.
President Yudhoyono hailed the accord as a "very happy, thankful and 
historic day", expressing gratitude to his "brothers" in GAM for working to 
"reunite with the big Indonesian family to build a better future in Aceh". 
Reuters reported that at the occasion, EU foreign policy chief Javier Solana 
said that he hoped the truce would help the rebuilding of Aceh after the 
tsunami.


In Aceh itself, people warmly welcomed the agreement and hoped that peace 
will finally come to the province and that people can again live free from 
fear. Today, on Indonesia's Independence Day, it was for the first time in a 
very long time, that people were free to celebrate Independence Day, free 
from the sound of shooting. For the first time, also, many tsunami refugees 
could laugh and play, enjoying the day.

The MoU is a comprehensive agreement that not only provides for amnesty and 
the disarming of the rebels, and restricting government troop movements in 
Aceh, but it also covers areas in the economy, finance, governance, and law 
enforcement in the province.

Implementation of the peace agreement will be monitored by 250 unarmed 
monitors from the EU and from the ASEAN states of Brunei Darussalam, 
Malaysia, the Philippines, Singapore and Thailand who would send monitors, 
said Finnish Foreign Minister Erkki Tuomioja. Many of these have already 
arrived in Aceh to begin their monitoring task.

President Yudhoyono and Vice President Jusuf Kalla both vouch that all 
points of concession given to the rebels are within the Constitution and are 
aimed at reconciliation to reach lasting peace in the province. For the 
Indonesian government, the most important consideration is that GAM has 
relinquished its insistence on independence or cessation from the Republic 
of Indonesia, and has accepted to live within the Unitary State of the 
Republic of Indonesia abiding by its Constitution.

However, one provision that still needs to be thrashed out and agreed upon 
by Parliament, is GAM's insistence to create a local (provincial) political 
party. For, according to present Indonesian law, all political parties must 
be national parties with membership in a minimum number of provinces.

Some Key points of the agreement of the Memorandum of Understanding are as 
follows:

POLITICS -- GAM will drop its fight for an independent Aceh state and 
integrate into Indonesia, which pledges that all former separatists will 
enjoy the same rights as any Indonesian.

Indonesia promises to revise a law on Aceh's autonomy next year to allow 
local political parties to contest top Aceh positions in April 2006 
provincial elections.


In accordance to Indonesia's Law on Regional Autonomy, national security and 
defense, monetary and fiscal matters, judiciary and policing, and foreign 
affairs will continue to be in the hands of the national government.

Aceh will, however, be allowed to draw up its own laws in other areas and to 
have its own flag and a song, although this will not be the equivalent of a 
national anthem.

ECONOMY -- Aceh will have the right to seek foreign loans and foreign direct 
investment. It will also have the power to arrange its own tax policies.

Aceh will have jurisdiction over living natural resources in the territorial 
sea surrounding Aceh and is entitled to retain seventy (70) per cent of the 
revenues from all current and future hydrocarbon deposits and other natural 
resources in the territory of Aceh as well as in the territorial sea 
surrounding it.  The province currently gets 55 percent of oil revenues and 
40 percent of gas revenues and this will continue until 2009, when the 
amount will be increased.

HUMAN RIGHTS -- An independent and impartial court system, including a court 
of
appeals, will be established for Aceh within the judicial system of the 
Republic of Indonesia. The Government of Indonesia will adhere to the United 
Nations International Covenants on Civil and Political Rights and on 
Economic, Social and Cultural Rights.
A Human Rights Court will be established for Aceh, and a Commission for 
Truth and Reconciliation will be established for Aceh by the Indonesian 
Commission of Truth and Reconciliation with the task of formulating and 
determining reconciliation measures.


Indonesia will grant amnesty to all GAM members beginning in late August and 
free thousands of separatists jailed across the Indonesian archipelago. GAM 
members jailed for ordinary criminal offences will not be freed.

Some GAM members will receive land and other resources to start new lives, 
but former GAM members will not be allowed to possess arms and any civilian 
carrying arms after the truce will be prosecuted.

SECURITY -- The agreement says GAM will be obliged to demobilise all of its 
3,000 military troops and hand over arms to the Aceh Monitoring Mission 
staffed by unarmed monitors from the European Union and five Southeast Asian 
nations, who will later destroy them inside Aceh. That process will start on 
Sept. 15 and end on Dec. 31.

Indonesia will pull out two infantry battalions, or 1,300 troops, from Aceh 
on Aug. 18. Later government troop withdrawals will match the pace of GAM 
weapons handovers, officials say.

Any Indonesian military movement involving more than a platoon will require 
prior notification to the chief monitor.
Indonesia has more than 30,000 soldiers in Aceh, as well as significant 
numbers of paramilitary police. The military withdrawal will leave Aceh with 
a military force 14,700 strong, while 9,100 police will remain in the 
province tasked with ensuring law and order
In the latest developments, already, as part of Indonesia's  60th. 
Independence Day celebrations, hundreds of jailed GAM members have been 
given reprieve or are released. While Military Commander, General 
Endriartono Sutarto has ordered all former military activities to seek out 
GAM members in Aceh, ceased.
(Sources: Reuters, Media Indonesia, SCTV)              (Tuti Sunario)

------------------------------------------------------------------------

NEWS AND BACKGROUND:

1.   Tourism and Transportation:

Department of Culture and Tourism, and Department of Transportation
      Senior Officials installed

Minister of Culture and Tourism, Ir. Jero Wacik, has finally installed the 
long-awaited line-up of senior officials to take up duties in his full-scale 
Department. These are:

Dr. Sapta Nirwandar: Secretary General; Ms. Amien Widyastuti Parwono, SH: 
Inspector General; Hari Untoro Dradjat, MA: Director General for History and 
Archaeology; Dr. Sri Hastanto S.Kar : Director General for Cultural Values, 
Arts and Film; Ir. Sambudjo Parikesit: Director General for Tourism 
Destination Development; Thamrin B. Bachri, M.Sc, Director General for 
Tourism Marketing; Dr. Mukhlis Paeni, Adviser to the Minister, for Social 
Infrastructure, Cultural and Tourism Resources;
I Gusti Putu Laksaguna, CHA, Msc.: Head of Development Board for Cultural 
and Tourism Resources.  Dra. Fadjria Novari Manan : Adviser to the Minister, 
for Multi-Cultural Matters; Ir Firmansyah Rahim, MM : Adviser to the 
Minister, for Institutional Relations; Drs. Wardiyatmo, MSc : Adviser to the 
Minister, in Economy, Science and Technology.

Meanwhile, new Officials were similarly installed by Minister of 
Transportation, Hatta Rajasa, at the Department of Transportation. Director 
General for Air Communications is now Muhammad Ihsan Tatang, who was 
formerly Director for Technical Airport facilities. Director General for Sea 
Communications is now Harijogi. Land Communication Director General remains 
Iskandar Abubakar, but the newly created Directorate General for Railways is 
headed by Sumino Eko Saputro. Coming from outside the Department is newly 
installed Secretary General, Wendi Aritenang, formerly with the Board of 
Study and Application of Technology (BPPT), and the Batam Authority.

Airport Tax up 50% from mid-August

The Airport Authority has announced that starting 15 August, passenger 
airport tax will be raised by 50%. This means that departing passengers from 
Jakarta's Sukarno-Hatta airport, Ngurah Rai airport in Bali, and Juanda 
airport in Surabaya,  will from now on have to pay Rp. 30,000 (approximately 
US$ 3.10) per passenger for airport tax, while at the Aceh and Tanjung 
Pinang airports the charge will be Rp. 15,000. Airport tax at all other 
airports is Rp. 20,000.



2.      Science, Culture and the Environment:

Indonesia-Malaysia discuss dousing of Forest Fires to stop choking haze

Malaysian Prime Minister, Abdullah Ahmad Badawi vouched to prosecute 
Malaysian businessmen who are found responsible for igniting forest fires in 
Indonesia, whose haze  choked large tracts of the western part of the 
Malaysian peninsula. Prime Minister Badawi made a specific telephone call to 
Indonesian President Yudhoyono to ask his attention to the haze that hit the 
Peninsula, as winds carried choking smoke here from forest fires on the 
islands of Kalimantan and Sumatra. A report given by Indonesian Forestry 
Minister, however, said that eight of the ten palm oil plantations found 
clearing land by burning are Malaysian companies.

As the dry season this year arrived relatively late, haze came in August 
rather than in July. For every year during the dry season, farmers and 
plantation-owners burn undergrowth, shrubs and forests to clear land ready 
for the next planting of palm oil. This causes huge forest fires and 
subsequent haze, spreading over large areas in Indonesia and on to 
neighbouring countries.

So far, all that the government could do is to try and locate fires to find 
the culprits. Many have been brought to court, although finding irrefutable 
proof of crime is most often elusive. The government also has no adequate 
equipment to fight forest fires, and, therefore, can only hope and pray for 
the next tropical rains to douse fires naturally.

For this reason, Malaysian Minister for Technology and the Minister for 
Forestry have met with their Indonesian counterparts, to study what can be 
done. Malaysia, who has more experience in this regard, has sent 28 fire 
fighters to Indonesia to help douse flames. And Australia, whose help 
Indonesian authorities have called in, have also promised to send fire 
fighters and equipment.

Last Thursday, 11 August, Malaysia imposed an emergency situation in Kuala 
Selangor and Port Klang, when pollution index here hit 529 and 531 
respectively. However, since the haze has reduced, emergency has been 
cleared. However, haze in Kuala Lumpur has peaked from 321 to 365.

Largest areas of fires are found in the Riau province of Indonesia, the 
southern part of North Sumatra and West Kalimantan, near Pontianak, both of 
which are adjacent to Malaysia. The West Kalimantan Forestry Department 
concedes that 80% of forest fires are done by small farmers who have 
traditionally done slash and burn farming, and know no other manner of 
clearing land.

3.      The Economy, Trade and Industry:

·    Government and Sinopec Sign MoU for Oil Refinery

The Office of the Coordinating Minister for the Economy in its Trade and 
Investment News of 8 August, informs that the Indonesian state oil and gas 
company PT Pertamina has confirmed that it signed a memorandum of 
understanding (MoU) with China's Sinopec Corp to build an oil refinery in 
East Java, reported Reuters. The MoU was signed during President Susilo 
Bambang Yudhoyono's recent visit to China.

"The MoU with Sinopec is still at the preliminary stage.  There needs to be 
further discussions on the project," Pertamina spokesman Abadi Poernomo 
said. Earlier, Pertamina President Director Widya Purnama had said that the 
company was looking to build a refinery, which could produce 150,000 to 
200,000 barrels of oil per day. Poernomo said Pertamina and Sinopec have 
also agreed to cooperate on oil exploration.

Indonesia has nine refineries with a combined capacity of an approximate 1 
million bpd, but these cover only 70% of domestic needs for oil products. 
The balance needs to be imported.

·    ConocoPhillips Wins Exploration Rights

ConocoPhillips, the largest US oil refiner, has won the right to explore and 
develop a field in Indonesia, Bloomberg disclosed. ConocoPhillips secured 
the contract to develop the Amborit VI (Arafura Sea) block off the coast of 
Papua province, the Mines and Energy Department's director of exploration 
and production Novian M Thaib informed.

The government has named winners of nine exploration blocks on Thursday 
(4/8/05).  The nine companies will spend $102.5 million in the next three 
years exploring energy resources.
Indonesia is seeking new oil and gas reserves to replace aging fields and 
increase production.  The government has scrapped taxes on equipment 
imported for exploration.  New contracts in the areas offered will be 
exempted from import duty and value-added taxes.

Indonesia receives 70% of revenue from gas fields while companies such as 
Unocal Corp, ExxonMobil Corp and Total SA receive 30%.  Whereas, the 
government receives an 85% share of the revenue from oil fields and 60% from 
fields in remote areas.

Thaib said local companies that were awarded rights were  PT Erry Guna --  
the Bungamas block, onshore South Sumatra; PT Commissioning Services 
Indonesia -- the Bengkulu block, onshore and offshore Bengkulu province in 
the southern Sumatra; PT Bumi Parahyangan Ranhill Energia, a consortium of 
Malaysian and Indonesian firms -- the Citarum block, onshore West Java; PT 
Star Energy  -- the Sebatik block, onshore and offshore of East Kalimantan; 
Zaratex NV -- a field in Lhokseumawe, onshore and offshore Aceh; PT Energy 
Timur Jauh -- the East Kangean block, offshore East Java; and Benuo Taka --  
the Wailawi block, onshore East Kalimantan. (Source: Trade and Investment 
News 8/8/05, Coordinating Ministry for the Economy).


4.      Politics and Security:

·         Indonesia-Singapore-Malaysia Defense forces jointly patrol 
Malacca Straits

The Office of the Coordinating Minister for the Economy further reported 
that Indonesia Malaysia and Singapore had agreed on 2 August, to start 
coordinated air patrols over the Malacca Strait by September to quell 
international concerns about increased piracy in the Straits of Malacca, one 
of the world's key shipping lanes.

Chiefs of Defense forces from the three nations announced the "Eyes in the 
Sky" plan after a two-day meeting in Kuala Lumpur with their counterpart 
from Thailand, saying it would bolster coordinated maritime patrols that was 
launched last year following rising cases of sea robberies and fears about a 
possible terrorist attacks on ships.

"We want to show the international community that we are serious about 
securing the Malacca Straits," Indonesia's military commander Gen. 
Endriartono Sutarto told a news conference. Piracy watch officials reported 
37 attacks last year in the waterway, which is used by more than 50,000 
ships a year, carrying half the world's oil and a third of its commerce.

Separately, Malaysian Defense Minister Najib Razak said that although the 
number of pirate attacks has "not reached critical proportions, we want to 
bring it down to almost zero."

He said governments outside the region could contribute planes and other 
equipment for the air patrols, since the three nations have insufficient 
aircraft for the mission.

"The reality is that we need more resources to ensure the level of security 
in the Straits of Malacca," Razak said. "The only way we can do it is to 
engage the international community, but not at the expense of principles of 
national sovereignty and territorial integrity."

He said the countries donot need sophisticated aircraft. "We are talking 
about quite basic maritime patrol aircraft, with certain monitors, radars 
that can locate small crafts which are normally used by pirates." But any 
aircraft provided by other countries should remain in control and command of 
the littoral states, he said.

Meanwhile, Indonesian Foreign Minister Hassan Wirayuda said on Monday that 
China has indicated its willingness to help enhance security in the strait, 
through which nearly all the oil imported by China and Japan and a quarter 
of global trade pass.

"China is now becoming an important user of the straits, and I've learned 
that China is willing to contribute towards its security," Wirayuda told 
reporters in Kuala Lumpur. Last month, Japan said it had donated three new 
high-speed patrol boats to beef up security in the 850-kilometer waterway.

For your comments or further inquiries, please e-mail to: 
tbsc-strategy at indo.net.id