Private Empire: ExxonMobil and American Power (14 page)

He decided to shut down operations in Aceh. The decision shocked Indonesia—newspapers covered the story under front-page banners. Until the Indonesian government created conditions in which ExxonMobil’s employees felt safe, Ron Wilson and other ExxonMobil spokespeople declared, Jakarta’s billion-dollar annual revenue flow would be turned off.

Robert Gelbard served that winter as the United States ambassador to Indonesia. He was a large, balding, and sometimes combative war-zone diplomat who had served in the Balkans during the Kosovo conflict. He told Ron Wilson that he supported ExxonMobil’s decision. Gelbard’s responsibilities included the safety of American citizens in Indonesia, and he felt the situation in Aceh was becoming “dramatically dangerous,” he said later, and he was “really worried” that some of ExxonMobil’s people “were going to get killed.”
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Still, Gelbard wanted to intervene to help restart gas production as soon as possible. Indonesia had embarked only recently on a shaky, unstable democratic transition after decades of military rule. The country’s president, Abdurrahman Wahid, could ill afford the loss of taxes and royalties from ExxonMobil’s Aceh gas fields.

The United States formally rejected G.A.M.’s independence drive and supported Indonesia’s claims of sovereignty over Aceh. G.A.M. leaders nonetheless considered the United States to be friendly to their aspirations because American diplomats advocated autonomy negotiations that would grant Acehnese leaders greater control over local affairs within a united Indonesia. With approval from Washington and the Indonesian government, Gelbard flew to Singapore for a secret meeting with one of G.A.M.’s most senior leaders. Gelbard recalled that he “wanted to be very clear with them: Yes, we like them, but no, we didn’t support independence.” At the same time, Gelbard believed that a military victory was not feasible for either side in the war—only successful autonomy negotiations between Jakarta and G.A.M. could end the violence. Wahid’s democratic government was inclined toward such peace negotiations, but Wahid had attracted opposition from hard-liners in the Indonesian military who wanted to eradicate G.A.M. by force. If Gelbard could restart ExxonMobil’s gas production, he might, among other things, deliver a victory to Jakarta’s beleaguered civilian peace-promoting forces. Gelbard said later that his intervention in the Aceh war had nothing to do with ExxonMobil’s business interests or the profits it produced from the Arun gas fields; he sought to reduce the Aceh conflict’s violence so that Indonesia would have a better chance to move from dictatorship toward democracy.

ExxonMobil could not be precise about what improvements in security would be necessary to persuade the corporation to restart operations in Aceh. “We’ll know it when we see it,” an ExxonMobil executive told one of the ambassador’s colleagues at the embassy.
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One way to reassure the corporation would be to persuade G.A.M. to publicly declare that ExxonMobil was off-limits in Aceh’s war. Gelbard thought that the United States should “read the riot act” to G.A.M. about its decision to target ExxonMobil. The ambassador and other senior Bush administration officials decided that spring to embark on an extraordinary campaign to restore ExxonMobil’s Aceh operations, and by doing so relieve pressure on Indonesia’s wobbly elected president. It was unusual for an American administration to negotiate directly with a guerrilla force over its targeting strategies, and even more unusual for it to apply American pressure to remove from insurgent target lists a lucrative field operated by ExxonMobil.

Aceh’s conflict was a dirty war characterized not only by kidnapping and extortion, but also by a brutal campaign carried out by the Indonesian military, a campaign that included torture and summary executions of suspected guerrillas. By aligning itself with ExxonMobil and Indonesia’s government to pressure G.A.M., the Bush administration risked associating itself with the Indonesian military’s tactics. Sections of the military were on ExxonMobil’s payroll to provide security at the perimeter of the Arun fields. These payments to Indonesian soldiers by the corporation were mandated by ExxonMobil’s contract. In return, the corporation’s Indonesian partners agreed to “assist and expedite” ExxonMobil “by providing . . . security protection . . . as may be requested” by the oil company. As a practical matter this meant that the Indonesian government supplied troops from the Tentara Nasional Indonesia, or Indonesian National Army, known as the T.N.I., to protect the gas fields. Under the arrangement, ExxonMobil paid the Indonesian soldiers’ salaries; by the time of the extortion campaign in early 2001, the going rate was about $294 per month for a typical enlisted man. The soldiers were by all accounts—including that of the Bush administration—engaged in appalling human rights violations.

As ExxonMobil prepared to shut down in Aceh, Ambassador Gelbard signed a confidential cable to Washington. He reported his embassy’s judgment that G.A.M. was guilty of “atrocities.” He also described, however, the ongoing crimes of Indonesian security forces that protected ExxonMobil’s gas fields: “The military/police offensive [in Aceh] is resulting in significantly growing human rights abuses. Many civilian corpses bear marks of torture and their hands are tied behind their backs. Neighbors of those later found dead often report that non-Acehnese men in plainclothes kidnapped the victims.”
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ExxonMobil’s daily operations were fixed in the middle of that dark violence.

T
he Indonesian military’s brutality in Aceh traced to the authoritarian “New Order” government of Indonesian president Mohammed Suharto, a former general who took power during the 1960s after a violent purge of the Indonesian Communist Party. The United States saw Suharto as a vital link in its anti-Communist strategy in Southeast Asia. Indonesia is an unwieldy archipelago of about seventeen thousand islands spread out over three thousand square miles. Suharto consolidated his power by allowing the military to enrich itself during deployments around the country’s resource-rich islands; he also constructed a tight-knit circle of family and ethnic Chinese business cronies in the capital of Jakarta. To shore up his security alliance with Washington, the president allowed American corporations to enjoy access to Indonesia’s minerals, oil, and gas. Suharto offered mining concessions to Freeport-McMoRan Copper & Gold and he delivered to Mobil the large stake in Aceh’s Arun field. (Mobil offered a share of the field to Exxon at the time, but the latter’s upstream executives demurred, to their enduring regret.)

Mobil entered into a production-sharing contract with Indonesia’s P. T. Pertamina, then a state-owned oil company. Under Indonesian law Suharto could name certain “Vital National Objects” that required military protection; in 1983, the Aceh property was so designated. Thousands of T.N.I. soldiers poured into North Sumatra to protect Mobil from the threats and sporadic attacks carried out by G.A.M.

Suharto had tried and failed to win the war in Aceh by force during the 1990s. He declared the province a special military zone. Torture and disappearances became commonplace. The T.N.I. rounded up thousands of young Acehnese men, interred them in camps, and forced them to sing the national anthem as part of their reeducation. According to human rights investigators, army officers set up schemes to profit from their deployments to Aceh—they ran logging operations, marijuana farms, and other rackets.

Security posts and unmarked interrogation houses became the settings for the blackest chapters of Aceh’s conflict during this period. Some of the interrogations took place on Mobil property or very nearby. The T.N.I. units set up posts along the fenced perimeters of the gas fields; the posts were sometimes separated by just a few hundred yards. Two of the most notorious facilities around Mobil’s fields were known as Post A13 and Rancong Camp. A post might consist of a two-story concrete building or just a barbed wire, sandbagged encampment with makeshift sleeping quarters.

One area with a particularly heavy security presence lay toward the south of Lhokseumawe, where pipes gathered gas from scattered wellheads and drew it into trunk lines for transport to the liquefied natural gas plant. A large trunk line ran down a straight, miles-long corridor known as the Pipeline Road. By early 2001, G.A.M. had taken to planting bombs and digging up pipes along the road. The T.N.I. erected security posts at intervals along the Pipeline Road and ran patrols in the area.

During the mid-1990s, Indonesian soldiers and intelligence officers arrested a number of G.A.M. leaders, including Sofyan Daoud, at the Lhokseumawe port, as they returned from exile in Malaysia. “They were taken to the Mobil facility for interrogation,” according to Ifdhal Kasim, the chairman of Indonesia’s National Human Rights Commission, which collected evidence about the case. There were more than twenty detainees and “they were tortured at that complex,” according to Kasim. “There was all sorts of torture by the soldiers.”
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Over the years, hundreds of young men arrested in the vicinity of the Mobil gas fields disappeared, according to Acehnese separatist activists and independent human rights investigators. Acehnese villagers assumed that the missing men had been killed in custody and had probably been buried near the T.N.I.’s security posts.

Only after Suharto’s regime cracked and collapsed under pressure from democracy campaigners in May 1998 did it prove possible to investigate past abuses. That summer human rights researchers interviewed villagers around the Mobil gas fields, documented the names of missing young men, and, guided by informants, dug in the ground for evidence. B. N. Marbun, a member of the National Human Rights Commission, estimated that at least two thousand Acehnese torture victims lay buried in secret graves. He and other investigators identified a dozen such locations and found remains in six of them; in one grave, in the village of Bukit Sentang, they dug up at least a dozen bodies.
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On October 10, 1998, a coalition of seventeen Indonesian human rights groups issued a statement alleging that Mobil Oil “provided crucial logistic support to the army, including earth-moving equipment that was used to dig mass graves” to bury Aceh’s torture victims and missing young men.
BusinessWeek
published a cover story two months later under the headline, “What Did Mobil Know?”

The oil company’s executives told the magazine that the answer was, essentially, “nothing.” Their employees had occasionally loaned the Indonesian army heavy equipment such as excavators during the New Order years, but only for “peaceful purposes.” The Mobil executives said they believed their equipment had been used to build roads.
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These human rights allegations had surfaced just as Lee Raymond and Lou Noto entered into their final talks about merging Exxon and Mobil. Noto flew hurriedly to Jakarta. He met with Gelbard’s predecessor as U.S. ambassador to Indonesia, J. Stapleton Roy, who “expressed concern” about the issue. Noto said that Mobil was unaware of any abuses by T.N.I. soldiers guarding its facilities and did not know anything about its bulldozers being used to dig graves. He flew back and appeared with Raymond in New York on December 1 to announce their merger deal.

Along the Pipeline Road and around the gas fields Indonesian human rights researchers continued to dig for corpses.

T
he Clinton administration cut off aid to the Indonesian military and suspended training contacts because of the human rights abuses committed by the T.N.I. Many of the abuses that concerned the administration took place in East Timor, another disputed province of Indonesia, where the T.N.I. sought, unsuccessfully, in 1999, to prevent a separatist-minded population from voting for independence in a United Nations–sponsored referendum. East Timor’s history and status under international law made it a special case; G.A.M.’s independence drive in Aceh enjoyed none of the same U.N.–sanctioned legitimacy. Isolated and embittered after losing East Timor, the T.N.I.’s commanders redoubled their focus on suppressing the rebellion in Aceh. Mobil still paid the salaries of T.N.I. soldiers and officers deployed to protect its fields, despite the official American sanctions over human rights abuses. Legally, Mobil was a subsidiary partner of the Indonesian state oil company in Aceh, and the security payments were one of its contractual commitments. Agus Widjojo, a serving Indonesian general at the time, recalled that his colleagues in the military’s high command felt “confusion and ambivalence” about Aceh’s rebellion as democracy took hold in their country. Indonesia seemed fragile and beset by centrifugal forces; the generals regarded themselves as the last guardians of national integrity.
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In 2000, Indonesian security forces “were responsible for numerous instances of, at times indiscriminate, shooting of civilians, torture, rape, beatings and other abuse, and arbitrary detention in Aceh” and elsewhere, the U.S. State Department reported. “Army forces, police, and G.A.M. members committed numerous extrajudicial killings.” The U.S. embassy in Jakarta did not regard Mobil as culpable, however. Its diplomats accepted the corporation’s account of itself: “The companies are unable to control military/police actions, including the use of equipment, that may result in human rights abuses,” a cable to Washington reported. “Mobil faces this dilemma in Aceh.”
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P
rivate profit-making companies had been waging war independent of their home country governments since at least the days of the East India Company and the colonization of the Americas in the eighteenth century. The idea that such corporations had a legal or moral duty to refrain from facilitating organized violence in their areas of operations was more recent. During the nineteenth century, Quaker ethical movements and antislavery campaigners in the United States and Great Britain, among other places, presaged the ideas that were lumped, toward the end of the twentieth century, under the rubric of “corporate social responsibility.” The 1970s brought an expansion of popular and political campaigns to codify corporate conduct for the sake of the public interest. By 2001, reports of human rights abuses carried out by military forces protecting oil and gas operations in Colombia and Nigeria—as well as the questions raised about Mobil’s complicity in Aceh’s violence—had given birth to a formal compact, the Voluntary Principles on Security and Human Rights, cosponsored by the Clinton administration and Tony Blair’s Labor Party–led government in Great Britain.