Crisis In East Timor: Is it time to boycott... coffee from Sumatra? ... holidays in Bali? ... Nike trainers? ... B&Q furniture? ... BP petrol?
The massacres in East Timor last week prompted Nobel prize winner Jose Ramos-Horta to call for sanctions against Indonesia. We examine the likely targets
Sunday 19 September 1999
But what then? The international community is seized with frustration. This is not Kosovo where the loathsome oppressors have retreated. This is Indonesia, where the peacekeepers, aid workers and politicians who are to pick up the pieces must deal with an unsavoury regime that has shown little regard for the human rights of its own people.
There is an increasing unease that it may all be too late. The people have gone - heading for the countryside ahead of the militias who are feared to have butchered up to 20,000 people a day since the referendum at the end of August. The towns have been razed. Worse than that, there is a real sense that the government of Indonesia is not to be trusted. What will happen in the camps it controls in West Timor, to which many refugees were driven? What will be the new role of the ruthless militia? Will the attempt of the peacekeeping force to assert democracy be subverted?
The international community is in an invidious position. Public opinion in the West demands the Timorese be helped but, in pressurising the Indonesian government to properly restructure and rebuild its country, there is a danger that such a move may strengthen the military's dark influence in Jakarta.
For all that Indonesia is teetering on the brink of chaos, it is still a formidable force. Despite containing some of the poorest people in South- east Asia, Indonesia is one of the world's fastest developing economic regions. The mainstay and saviour of its economy for many years has been oil and gas: exports account for more than $10bn annually - about one- third of all exports. The country is the world's biggest supplier of plywood. Cash crops, such as coffee and rubber, are plentiful.
But can the generals be trusted to resolve the political and social crisis? Last week, writing exclusively in this paper, Jose Ramos-Horta, the Nobel Peace Prize winner and East Timor's foreign minister in exile, declared that the only way to repair Indonesia in the long term is by establishing an international boycott of all things Indonesian.
Those in favour of a boycott argue that cronyism has led to the military being highly intertwined in trade. Put crudely, anyone buying a jar of Javanese coffee is effectively paying the military men's golf club fees. It is an argument that runs close to home: British imports from Indonesia totalled pounds 967.5m last year, while two British-based multinationals, Rio Tinto and BP-Amoco (formerly British Petroleum), have shares in some of the largest mining operations in the country. More than 150,000 British tourists visit the country each year, unaware that, according to Mr Horta, the Indonesian army generals have controlling interests in most of the Bali hotel chains.
PricewaterhouseCoopers has described the banking system in Indonesia as shambolic. Bank Bali has been linked to several enterprises that heavily fund President BJ Habibie's party, while the case of the pounds 3bn copper and gold mining operation in Irian Jaya is a blatant example of cronyism and how foreign currency earnings go directly into the pockets of the Indonesian political and military hierarchy.
The mining operation, Indonesia's largest and most controversial foreign investment, is run by PT Freeport Indonesia. One of Freeport's shareholders is the company PT Nusantara Ampera Bakti, which is run by Bob Hasan, a crony and golfing partner of the former president Suharto; Suharto's eldest son, Sigit, happens to hold a 10 per cent share. Sigit, along with Suharto's second son, Bambang, also have substantial holdings in Indonesia's first polyethylene production plant in West Java. Bambang has other investments in major contracts involving the state oil company, Pertamina.
The rewards have been substantial. More than a year after the fall of Suharto, his offspring are still believed to own three valuable London properties and part of a golf course at Ascot, Berkshire. Only three months ago, the attorney-general appointed to determine to just what extent their personal fortune - put at pounds 9.3bn - came from nepotism and corruption had to step aside after himself facing similar allegations.
Kevin Watkins of Oxfam says that poverty in the country has doubled in the past two years in a direct link to corruption. "This is one factor that has fuelled the instability. Health and education systems have simply collapsed in parts of the country as a result of growing corruption," he says. "Over the last few months the banking system in Indonesia has collapsed through the cronyism of the leading military figures."
Others have reservations about sanctions, arguing that, while they would hurt the ruling junta, they would inevitably hit the poorest and most vulnerable harder and sooner, as has happened in Iraq. Margaret Thatcher maintains to this day that sanctions did nothing to precipitate the fall of apartheid in South Africa. The debate is complex, involving the rare spectacle of international multi-nationals joining high-profile charities to oppose a boycott.
There is another voice that the international community will heed. Despite the growing humanitarian crisis in Burma, Aung San Suu Kyi, the opposition leader there, has reiterated her opinion that companies should boycott the country, even though the economy is on the point of collapse. Is Indonesia any different? In the eyes of human rights campaigners and environmentalists, furious at the devastation being wreaked by logging operations, a boycott is long overdue.
Additional reporting by Bernadette Carroll-Sandhu and Alex Liszka.
WHAT NOT TO BUY
l Trainers from Adidas, Nike and Reebok, who all have factories or sub-contractors in Indonesia. Footwear imports from Indonesia to the UK are worth pounds 87.5m. Last autumn Nike announced a 25 per cent wage increase for its lowest-paid factory workers in Indonesia to pounds 16 a month. Adidas describes the country as a "major, major supplier".
l Coffee, including Javanese, Celebese and Sumatran is available at most high-street stores and supermarkets. Britons spend pounds 23.9m on coffee, tea and spices such as cinnamon sticks and cocoa from Indonesia every year. Many of these commodities are in the hands of military interests. Tesco sells Javan and Sumatran coffee. Sumatran coffee is sold in 227g packets at Starbuck's for pounds 4.55. Costa Coffee sells Old Brown Java and Sumatra Blue Lintong and have "no immediate plans" to remove the products.
l Clothing garments including shirts, blouses, anoraks and underwear. The Suharto family has substantial holdings in clothes factories, many of which are sub-contracted by British firms. Most high-street stores stock clothing sourced from Indonesia, according to Christian Aid, though few shops were prepared to confirm this. Some, including Marks & Spencer, label clothing by source. Indonesian goods comprise 0.2 per cent of M&S's annual turnover - around pounds 16m.
l Palm oil, produced from plantations in Sumatra, and other vegetable fats and oils from the country, on which Britons spend pounds 37.8m.
l Timber. Homebase stocks garden furniture sourced from Indonesia, though the company says it is now reviewing contracts in the light of recent events. Half of B&Q's garden furniture comes from the country, though the company says it expects its sources to be certified as "forest friendly" by the end of the year.
l Petrol: BP-Amoco has substantial investments in Indonesia.
l Holidays. The Association of British Travel Agents lists 51 companies with "specialist knowledge" of Indonesia, including the "paradise island" of Bali. Among them are Kuoni, Unijet Travel, British Airways Holidays, Thomas Cook Holidays, Abercrombie & Kent.
l "Ethnic" items, particularly high-quality batik cloth. Oxfam has urged people not to boycott "fair trade" shops which ensure that any money passes directly into the hands of local people. Habitat, which has expanded its stock of ethnic goods, declined to comment on how many products come from Indonesia. Such items include minimalist 17oz bags of black, grey and white pebbles priced pounds 1.50.
n Including its national police, Indonesia has one of the biggest armed forces in Asia, with some 450,000 men. Many officers of the Kopassus special forces were trained in Britain. Since 1997, 24 Indonesian military personnel have participated in courses in the UK.
n British imports from Indonesia last year amounted to pounds 967.5m, a slight decrease on 1997, according to the Department of Trade and Industry, but still higher than the figure of pounds 782.5m in 1994.
n Although the Government last week suspended all British arm sales to Indonesia, it has certified 125 military exports to the country since it came to power in 1997.
THE CASE FOR SANCTIONS
THE ATROCITIES being witnessed daily in East Timor this month, coupled with Indonesia's appalling human rights record mean that a boycott must be imposed for both practical and ethical reasons, according to a disparate coalition of groups in favour of independence for East Timor. They echo the view of Aung San Suu Kyi, who has called for an economic and tourist boycott of Burma in an attempt to force the military junta there to relinquish power.
The British Coalition for East Timor, a voluntary organisation made up of 10 charities and groups including Cafod, the Catholic aid agency, has been campaigning for democracy in Indonesia since 1991. It believes there is a direct link between trade and the Indonesian army's behaviour.
"Every time you buy a product like coffee from East Timor, you're not helping the local people, you're lining the pockets of the militia who own practically every company in East Timor - money that they plough straight back into their bloody pursuits," says Alex Robinson, BCET's campaigns organiser.
"The only way to stop these madmen is to hit them where it hurts, in the pocket. We have to sever all ties with Indonesia and that includes all economic links from imports to tourism. If we did, we'd be cutting off a major source of income and I am certain that without that they will readily want to do some serious talking."
The charity Christian Aid believes the international banks should take a lead. "While economic sanctions which might cause suffering to the Timorese people should be avoided, the IMF, World Bank and Asian Development Bank should review their financial support to the government until public order and human rights are restored," says a spokeswoman.
THE CASE AGAINST
THOSE WHO oppose Jose Ramos-Horta's call for a boycott seem uneasy bedfellows, but they share the sentiment that a withdrawal of trade would prove counter-productive. The multinationals speak of their "commitment to local workers".
"We have no intention of pulling out of Indonesia," says a spokeswoman for Nike, which has factories in the country that manufacture sports shoes. "Nike is committed to Indonesia and its economic development. Like everybody else, we hope for peace and stability, and believe that any boycott would only create unintended harm by creating further unemployment and upheaval."
For different reasons, a boycott is opposed by the charity Save the Children, which fears that sanctions imposed in similar circumstances elsewhere have not achieved their aim. "If you're going to impose sanctions, you must make sure you know what your aims are and then you must question whether the sanctions will achieve them," says Rita Bhatia, the charity's policy analyst.
"In our experience blanket economic embargoes do little more than hit people who are most vulnerable. The UN programme, Oil For Food, which allows Iraq to sell so much oil in return for food and medicine, has gone some way to ensuring a safer world but I am not certain of its success."
This point is echoed by Steve Howard of the charity Forest for Life which argues that a blanket trade ban on tropical timber would be impossible to enforce. "We can only encourage firms such as B&Q and Homebase in continuing to buy timber from sustainable forest merchants in Indonesia. If a boycott was imposed, the uncontrolled timber merchants who are deforesting the country would simply sell their timber elsewhere."
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