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**http://www.theage.com.au/news/world/papua-row-could-scare-off-investors/2006/03/03/1141191852397.html



Papua row could scare off investors

By Mark Forbes, Jakarta
March 4, 2006




INDONESIAN President Susilo Bambang Yudhoyono has intervened in the growing 
controversy surrounding Papua's giant Freeport mine, warning that violent 
protests could scare off investors, and questioning demonstrators' motives.
Returning from a visit to Burma, Dr Yudhoyono said he would gather senior 
ministers to seek a resolution to the crisis surrounding the world's largest 
gold mine. It was sparked 10 days ago when tribesmen armed with bows and arrows 
confronted guards who were preventing them searching for gold among Freeport's 
residue.

Although the tribesmen lifted a blockade of the mine last weekend, protesters 
in Jakarta and Papua have continued to call for Freeport's closure, linking the 
dispute to the province's struggle for greater autonomy and benefits from its 
natural resources.

Together with a deadlock between Exxon Mobile and state-owned oil company 
Pertamina over the right to manage a $2 billion offshore oil project, Dr 
Yudhoyono is concerned his quest for increased foreign investment could suffer.

The causes of the Freeport conflict must be urgently identified and dealt with, 
Dr Yudhoyono said. Money contributed by Freeport to the local community must be 
distributed fairly.

He said some elements behind the protests might not be truly concerned about 
problems at the mine. Yesterday's Jakarta Post suggested "provocateurs" might 
be seeking to drive down Freeport's share price after a government edict that 
the company sell 10 per cent of its shares locally.

Violent protests could deter foreign investors, Dr Yudhoyono said. "They'll see 
what is being done to businesses that invested here and it will scare them 
away."

A solution must be found, he said. "If it's about Freeport's funds for 
community development, then discuss it."

Dr Yudhoyono is facing criticism for failing to implement a deal for greater 
autonomy for Papua, the scene of a violent, long-running independence struggle.

Protesters have linked Freeport to claims Jakarta and multinational 
corporations are environmentally and financially pillaging the resource-rich 
province. Freeport is Indonesia's largest taxpayer, contributing more than $150 
million a year.

Dr Yudhoyono also issued a broadside to Pertamina's management, which is in the 
midst of a six-month standoff with Exxon over the rights to develop the rich 
Cepu oil field. He said the state-owned oil firm needs restructuring and has 
"run slow, half-baked and ineffective".

During his visit to Burma - the target of international criticism for its 
suppression of democracy - Dr Yudhoyono called on the regime to allow access to 
regional monitors.


[Non-text portions of this message have been removed]



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