Suharto and his family: The looting of East Timor

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By George J. Aditjondro

Some people have argued that basically, it is the Indonesian armed forces (ABRI) that do not want to pull out of East Timor, because ABRI would lose face after losing the 22-year war. Very rarely has it been argued that Indonesia's first family themselves do not want to lose East Timor, because of all their business interests in that occupied country. The first family's and ABRI's business interests in East Timor are strongly intertwined, which is why those interests have to be protected directly by Suharto's son-in-law, Major General Prabowo Subianto, commander of the Indonesian army's special forces, Kopassus.

Since General Benny Murdani's fall from grace in 1992, businesses in East Timor closely linked with the retired general, which were brought together under the Batara Indra Group, have been steadily taken over by a new business group linked more directly to the Suharto family and the family of the outgoing "governor", Jose Abilio Osorio-Soares.

Abilio is a protégé of Prabowo. Let us call this business group, "the Suharto-Osorio-Soares business complex". But for analytical purposes, I distinguish the Osorio-Soares family companies from the Suharto family companies, although the Osorio-Soares family companies are just the "compradors" of the latter.

Osorio-Soares companies

Being an in-law of politically powerful figures has been very beneficial for Gil A.N. Alves, a brother-in-law of the governor, who has became the main business partner of various companies owned by or linked to Indonesia's first family.

Two of those companies were officially opened by Titiek Prabowo, the wife of Prabowo Subianto and second daughter of President Suharto, in May 1997. One was PT Dilitex textile factory, a weaving plant with an investment of US$575 million on 200 hectares of land. The second was a salt factory which will produce 1360 tonnes of iodised salt per year on 12 hectares in Manatuto, Abilio's home district.

Both companies have Gil Alves as president, representing Yayasan Hati, a foundation of pro-Indonesian former "partisans" during the 1975-1976 "integration" operation. The Dilitex factory is a joint venture between Yayasan Hati, Titiek Prabowo's Maharani Group and the Texmaco Group.

The last group is controlled by a top Indonesian businessman of Indian decent, Marimutu Sinivasan, who also plans to build five new textile plants in Europe — one of them in Portugal — through a joint venture with the German chemical giant, Hoechst.

News about the Portuguese plant caused a big uproar in Portugal after the Portuguese media and politicians, earlier in August, had attacked another Indonesian company with links to the Suharto family, PT Sritex, for winning a tender to supply NATO troops with uniforms.

Gil Alves, apart from running those two companies, also assists other Suharto family businesses in the territory. His coffee export licence serves the president's eldest daughter's instant coffee company in East Timor. He also manages the branch office of PT Arha, the alcohol monopoly company of Suharto's grandson, Ari Haryo Wibowo.

With Jose Abilio Osorio-Soares' ascent to power in Dili, other Osorio-Soares family companies began to come to the forefront. The most prominent was PT Anak Liambau, which began to grab construction contracts that previously went to Batara Indra Group companies. And like Batara Indra, Anak Liambau also turned from a single company into a group, popularly known as the Anak Liambau Group.

The directors of most of those companies are associated with families of powerful Indonesian civil servants in the provincial government, or, in the case of PT Bandung Raya, associated with Indonesian generals in Bandung, West Java. They all have one thing in common: they carry out millions of rupiahs worth of construction projects in East Timor, which are often not finished on time, often do not pay the original landowners proper compensation and are full of technical flaws.

At the moment, PT Anak Liambau is directed by a retired Indonesian civil servant, Bob Mahulette, a former staff person of Abilio Osorio-Soares when Abilio headed the Indonesian Public Works Office (Kanwil PU). In 1994 he became the head of the provincial Public Works Service (Dinas PU), was moved to his home province, Maluku, and is now back in East Timor to run this Osorio-Soares family company.

This company was set up during Abilio's own tenure as head of Kanwil PU, to seize a piece of the public works pie in the territory. Currently, the governor's wife and his younger sister, Natarcia Osorio-Soares, who recently testified in defence of her country's occupier in the UN Decolonisation Committee in New York, sit on Anak Liambau's board.

Another major money maker for the Osorio-Soares family is the controversial Hotel Dili, which is directed by a younger sister of the governor, Elsa Pinto Osorio-Soares.

The original owners of this hotel, the Favaro family, who moved to Dili from Australia in 1970 and bought the beachfront hotel and an adjoining block of land and the 28-hectare Nova Dili Coffee Plantation, 14 km from the city, had to flee in 1975, after the Indonesian invasion. Since 1989, they have unsuccessfully tried to recover the losses from their A$4.5 million properties.

Suharto family companies

By having a protégé of Prabowo Subianto in power in Dili, businesses owned by or associated with the Suharto family also began to make quick inroads.

The first member of the family to develop business interests in their colony was Suharto's eldest daughter, Tutut. She owns an instant-coffee manufacturer in Dili, under the name of PT Citra Inskopindo Persada. For the last six years, this company has produced 1.2 tonnes of instant coffee per year.

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Tutut's coffee business has entered the US market as well. In May, NCBA, a US-based company, stated its plan to buy 4000 tons [3630 tonnes] of East Timorese coffee in 1997.

This coffee will be bought from the Indonesian government-sponsored village cooperatives, which are all congregated under East Timor's cooperatives coordinating body, Puskud Timor Timur. The coffee for NCBA would come from the coffee growers in the districts of Ermera, Liquica, and Ainaro, for about Rp 800 (US$0.32) per kilogram, the Puskud Timor Timur chief told the media in Dili.

This major deal came after an initial trial of selling 3000 tons of East Timorese coffee in 1996. Puskud Timor Timur had also exported to Australia and several Asian countries, in cooperation with Tutut's PT Citra Inskopindo. In fact, their 80 gram coffee packages and larger were detected by pro-East Timor activists in the Victorian market in Australia in early 1997.

Tutut's company practically replaced the role of PT Denok, which monopolised the East Timorese coffee market through the Indonesian government's network of pseudo-cooperatives, Puskud Timor Timur, during the first decade of the Indonesian occupation.

Tutut's success in the East Timor coffee business has attracted the attention of her uncle, Probosutejo, who plans to develop his own coffee plantations in the territory.

Meanwhile, Tutut and her younger brother Tommy also plan to open a 25,000-hectare sugarcane plantation on the southern coast, stretching from Betano in the district of Manufahi to Iliomar in the district of Viqueque.

Local villagers have begun to protest against this plan, because they were going to be evicted to make way for settlers from Java and Bali, who were going to be recruited to open and cultivate those sugarcane fields.

To mill the sugar, Tommy and Tutut plan to build a large mill in Manufahi. With an investment of nearly Rp 500 billion, this new company, PT Putraunggul Sejati, plans to produce 162 tons of sugar and eight tons of molasses per year. It was by far the largest sugar mill project application approved by the Indonesian Investment Board last year.

Another Suharto family-linked company in East Timor is PT Fendi Hutani Lestari. This company is directed by one of Suharto's golf buddies, Bob Hasan, and plans to open nearly 50,000 hectares of plantation forest in an area covering 11 villages in three subdistricts of Viqueque.

This top Indonesian businessman runs a company, PT Nusamba, which is 80% owned by three charities headed by Suharto himself. In addition, Suharto's eldest son, Sigit Harjojudanto, owns 10% of Nusamba's shares, as does Bob Hasan. So Nusamba is also most likely a shareholder of PT Fendi Hutani Lestari.

From coffee and sugar, Tutut's interests in the territory have diversified into another business in which the family has become deeply entrenched, Portland cement.

On the day that the Nobel Peace Prize was awarded in Oslo to two East Timorese freedom fighters, a regional newspaper in Bangkok, Asia Times, reported, "The eldest daughter of President Suharto and an exiled rebel leader are in the running to become investors in the first large-scale investment in East Timor".

The "exiled rebel leader" is Abilio de Araujo, former leader of the overseas delegation of Fretilin, who was expelled from the party when he shifted his allegiances to Suharto.

According to the Lisbon-based news service Lusa, however, it is not Tutut who will become Abilio de Araujo's partner in the cement factory, but the Indonesian group that bought the Italian car maker Lamborghini. This joint venture, known as PT Semen Timor Loro Sae, will invest US$512.8 million to produce 2 million tonnes of cement per year and will employ 1500 workers.

Regardless of who his partners might be, Abilio Araujo's inclusion in the project and the decision to site this new cement factory in East Timor serve two ends for the regime: fending off criticism for neglecting East Timor and rewarding former freedom fighters who have changed their loyalty to Suharto.

Another conglomerate owned by Suharto's relatives and cronies is planning to build a cement distribution terminal near Dili. PT Maluku Dinamika Semen is constructing a large cement factory on the island of Seram in the Moluccas.

This company is a member of the Djajanti Group, which is headed by Sudwikatmono, Suharto's foster brother, who owns 10% of the shares in the group. The president of the cement company is the 27-year-old Isfan Fajar Satryo, fifth son of Indonesia's vice-president, retired general Try Sutrisno.

With this strong political backing, the company could simply evict the traditional Seram landowners from their land, without proper compensation.

This forceful approach was also how Djajanti treated the villagers whose damar trees were cut for the group's plywood factory on Seram in the late 1980s. The protesting villagers and their supporters were simply labelled as remnants of the banned South Moluccan independence movement.

"Distance" is also a strategic commodity for Indonesia's first family, since they practically control all Indonesian private airlines.

Ironically, the more East Timor gets into the spotlight due to all the human rights violations in the territory, the more income Sempati Airlines earns from the fact-finding missions flying from Jakarta to Dili. This airline is a joint venture of Suharto's youngest son, Tommy Suharto, with Bob Hasan's PT Nusamba and Yayasan Tri Usaha Bhakti, a foundation owned by the Indonesian army. Sometimes foreign observers cannot fly to East Timor with the state-owned airlines, Garuda and Merpati, and have to fly with Sempati.

Tommy Suharto has other interests in maintaining Indonesian control over East Timor, namely the oil and gas resources in the Timor Sea. His aircraft charter company, PT Gatari Air Services, which rents fixed-wing aircraft and helicopters to oil companies, has been waiting for the last six years to serve the oil and gas rigs in the Timor Sea.

In addition, his own oil company, Humpuss Petrogas, has formed a joint venture with a Norwegian supplier of offshore drilling facilities, Aker Maritime, and his oil tanker fleet may also be used to ship the oil from the Timor offshore and onshore wells to their potential buyers.

It is quite reasonable to believe that Tommy also wants to become a major player in the offshore oil business in the Timor Sea, to compete with his older brother, Bambang Trihatmojo, who is getting involved in the gigantic gas fields of Natuna in the South China Sea.

Embargo

From all those business interests, probably only the oil and gas resources in the Timor Sea are not matched by the Suharto family's numerous business interests inside Indonesia and in other parts of the world.

British author Carolyn Marr wrote in 1993 that the Timor Gap contains potentially more oil than all of Kuwait's reserves. Apart from the offshore resources, the Indonesian state oil company, Pertamina, has also carried out onshore explorations on the southern coast of East Timor; between Suai and Betano, crude oil has seeped to the surface at 39 places.

Hence, Tutut and Tommy's sugar project on the south coast may only be a cover for other, sweeter, business ventures.

East Timor's oil and gas reserves are, from the economic point of view, the main stumbling blocks to a peaceful solution. This also means that more concentrated efforts are needed to put pressure on the Suharto regime in this field: embargo all new international oil business in the Timor Sea!

In the meantime, let us work more closely with the Australian labour movement to boycott all existing oil and gas operations in the Timor Sea, from the Timor Gap to the North-west Shelf, since it is mostly Australians working on the offshore and onshore oil and gas installations.