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TNI Misses Deadline to Divest Business Empire

The Indonesian military (TNI) has evaded what the Wall Street Journal on October 17 described as a "long-anticipated deadline to withdraw from its many lucrative but controversial business activities." The legal mandate on the TNI to divest derives from a legal obligation imposed by the Indonesian parliament in 2004. Many of those TNI businesses are illegal, as detailed in a 2006 Human Rights Watch report, and many are centered in West Papua. They range from mining and logging, to extortion and prostitution, the latter extending to people trafficking.

Emphasizing the West Papua angle, the Wall Street Journal article noted that in 2005, President Yudhoyono ordered a "crackdown" on illegal logging in Indonesia's remote Papua province. The Journal elaborated, however, that while 186 people were arrested "only a handful of people were convicted, all of them low-level operators, and the suspected ringleaders, including a military police officer suspected of involvement, were acquitted."

In furtherance of these activities, particularly in West Papua, the TNI has pursued tactics of intimidation, often terrorizing and uprooting local populations to clear the way for logging or other land use in service of its businesses or those of clients.

As the deadline for closure of the TNI business empire approached, President Susilo Bambang Yudhoyono issued a decree ordering the armed forces to transfer its official foundations and cooperatives, valued at over $240 million, to Indonesia's civilian-led Defense Ministry, which is to operate them and receive any profits. But his decree failed to set a date for this turnover. Moreover, the Defense Ministry, while civilian-led, is dominated by active-duty or retired military leaders. In October 2008, a Government task force recommended that the state sell or liquidate the TNI. The task force recommended that by bringing the assets under civilian control the Government could demonstrate its commitment to real military reform and the principle of civilian control of the military. The Chairman of that task force has expressed his disappointment with the new Yudhoyono decree.


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