Subject: Undercurrent: Phillips Payments "Outrageous" Says East Timor

Phillips Payments "Outrageous" Says East Timor Todd Walker

Undercurrent, Norman, Oklahoma November 16, 1999

Nobel Peace Prize recipient Jose Ramos-Horta has reacted strongly to the $2.9 million in payments made by Phillips Petroleum to Indonesia during that country's September attack on East Timor, which left thousands dead, 200,000 currently in captivity and over 120,000 missing. "I think it is outrageous," the 1996 Nobel Peace Prize Laureate told the Undercurrent. "At a minimum, they had an obligation to seize all revenue from oil production after the ballot," he said, referring to the August 30th UN-sponsored referendum in which East Timor overwhelmingly voted to reject 24 years of Indonesian military occupation. Horta shared the Nobel Peace Prize in 1996 with his compatriot and countryman Bishop Carlos Belo, "for work towards a just and peaceful solution" to the brutal foreign occupation by Indonesia. At least 200,000 died as a result of the illegal 1975 invasion and military occupation by Indonesia of East Timor. "They should stop any payment to Indonesia" for the oil, Horta said of Phillips when informed of the money transfers. "They did not have any authority to make such payments." Indonesia itself formally has ended its claim on East Timor, yet even now Phillips has yet to pay a penny to the country for millions of barrels of oil removed from their waters.

Phillips ignores UN Resolutions

Phillips contracted with Indonesia and Australia to buy East Timor's oil during the occupation period, despite 10 UN resolutions rejecting Indonesia's invasion of East Timor and calling for immediate withdrawal of Indonesian troops.

When the East Timorese voted on August 30th to reject Indonesian military rule, Indonesia's military responded by killing thousands, kidnapping hundreds of thousands of people into Indonesia, and burning an estimated 80 percent of the structures in the country, in what Australian military sources say was an orchestrated plan of mass murder and abduction. Phillips payments were made during the height of the violence. A UN-endorsed Australian force landed on the island on September 20th to put a stop to the mass killings, which shocked the world.

In Indonesian West Timor, UNICEF reported last week that 114 children had died in concentration camps, where an estimated 200,000 East Timorese are being held at gunpoint despite promises by the Indonesian government to release them. Human rights groups have documented abductions of children for sexual slavery and systematic disappearances from the camps. Indonesia's newly elected President, Abdurrahman Wahid, told President Clinton on Saturday that he would use the Indonesian Air Force to return the hostages to their homeland, but similar promises had been made last month with few results. Indonesia's new civilian government is weak and has little power over the military, which controls the oil ministry and receives revenues from oil sales.

Students Demonstrate against Phillips

OU [University of Oklahoma] students first demonstrated against Phillips' oil arrangement with Indonesia in October of 1996. Although OU President David Boren, a Phillips Director since 1994, now claims that he has supported independence for East Timor for years, at that time he in fact defended Phillips' contracts with the country occupying East Timor, saying that business ties with Indonesia were the best way to promote democracy and human rights.

The results of this failed "constructive engagement" policy, used by many companies who did business with the corrupt regime of former Indonesian dictator Suharto, are still washing ashore on the coast of East Timor, where Australian troops daily find the burned bodies of East Timorese people killed in September. Many of the bodies show obvious signs of torture, according to UN special War Crimes investigators. Some entire towns are empty because not one kidnapped resident has yet returned.

Student demonstrations resumed on September 22, 1999, during the most recent round of mass violence against the Timorese.

Shifting the Defense

The Undercurrent first reported the multimillion dollar September payments on October 20th, after Phillips spokesman Jim Godlove in Darwin, Australia contradicted a statement made by Boren to OU students that "Phillips has never paid a penny to Indonesia."Godlove detailed to the Undercurrent millions of dollars in payments to both Indonesia and Australia for East Timor production.

Boren also told OU students that any money resulting from East Timor oil production would be placed by Phillips in a "special suspense fund" so that Indonesia would not be paid for Timorese oil. Both Godlove and Vice President Horta have stated that no such fund exists. "There was never such a fund," said Horta, whose proposal for a special trust fund in 1998 was rebuffed. Since September students have demonstrated on two more occasions, demanding that Phillips pay for millions of barrels of oil removed from East Timor's Elang, Kakatua, and Kakatua North fields, acquired on April 13th from BHP of Australia. In recent news stories reacting to the continued student demonstrations, both Phillips and Boren have defended the payments, whose existence Boren had originally denied.

Boren has also implied that he previously was not aware of the BHP purchase. However, Phillips CEO Wayne Allen on May 3rd highlighted the purchase from BHP at the top of his speech to the company's annual shareholder's meeting, according to company records. Phillips' media strategy centers on the Timor Gap Treaty, negotiated in 1989 between Indonesia and Australia, the only country in the world that ever recognized Indonesian claims on East Timor. Australia has since changed their position, sending troops in late September to protect East Timor from Indonesian attacks. Phillips pursued a contract for oil in the Timor Gap in 1991 despite the fact that Portugal, recognized by the U.S. and UN as the Administering Power of East Timor at that time, had sued in the International Court of Justice to stop the treaty. On November 12, 1991, Indonesian troops opened fire on an unarmed crowd in the East Timorese capitol of Dili, killing 271 men, women and children with American-made M-16 machine guns. When Phillips and other companies signed contracts to pay Indonesia and Australia for East Timor's oil just a month later, the ceremony had to be held in secret for fear of protests by Australians outraged by the massacre.

Horta Responds to Treaty Defense (bold) The Undercurrent asked Horta, who fought from exile for 24 years to free his country, to comment on Phillips' use of the treaty to defend payments to Indonesia while atrocities were being perpetrated by their oil-funded military.

"Notwithstanding their claim of a treaty, they contracted with Indonesia in disregard of the illegality of the treaty," he said. East Timor's government plans to renegotiate the terms of the Timor Gap Treaty with Phillips and the other oil companies operating in the area. Horta, along with President Xanana Gusmao, recently signed a letter sent to Phillips and other oil companies connected with Indonesia which will allow oil companies to continue "without negative impact" on Timor Gap operations, pending the renegotiation of terms.

Jose Ramos-Horta, elected Vice President of the CNRT, the provisional East Timorese government, plans to return home on December 1 for the first time in 24 years. When asked about the upcoming talks with Phillips and other oil companies, Horta said, "We will defend the interests of the people of East Timor with this or any company in the most forceful manner."

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