[INDONESIA-L] GJA - Suharto's Swiss

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Date: Thu Mar 26 1998 - 13:51:00 EST


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Subject: [INDONESIA-L] GJA - Suharto's Swiss Businesses - I
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Date: Thu, 26 Mar 1998 17:17:32 +1100
From: aditjond@psychology.newcastle.edu.au (George J. Aditjondro)
Subject: Suharto's Swiss businesses (I)
To: apakabar@clark.net
 
Suharto's Swiss (bank?) connections (part I)
-------------------------------------------------
By George J. Aditjondro
  
AT the end of last year, there were speculations in Indonesia and Swiss,
that Indonesian President Suharto has made preparations to send some of his
fortunes to Swiss banks, as his former Philippine counterpart, Ferdinand
Marcos, had done. These speculations were fueled by rumours that twice in
1997, Suharto had visited certain banks in Zurich. The first time was after
his health check-up in Germany, when he was accompanied by some of his
children and grand-children. And the second time was on the way back from
Vancouver, Canada, to Saudi Arabia, in late November 1997.
  
Both rumours have not (yet?) been substantiated. However, what can be
substantiated is that several major Swiss companies, such as the infamous
baby formula producer, Nestle, S.A., and three of the main international
Swiss banks, SBC, Credit Suisse, and UBS, have played an important role in
the underwriting the fortunes of Indonesia's First Family, their in-laws,
especially the Djojohadikusumo family, their cronies, namely Liem Sioe
Liong, Bustanil Arifin, Alamsyah, Murdaya, and Sofyan Wanandi. The latter
has recently been dumped for political reasons. Through these cronies,
Suharto also attempted -- and quiet successfully for years -- to mobilize
support from Christian Chinese, Buddhist Chinese, and Muslim circles for
his more than three decades of kleptocratic rule in Indonesia.
  
The following list is a recapitalution of those Swiss business links which,
in times of emergency, may be mobilized to assist the Suharto family and
their cronies to shift substantive portions of their wealth to Swiss. From
that list various interesting points can be made:
  
(1). The Suharto family has ties with one of the largest baby formula and
prepackaged food companies, Nestle's, despite the national campaign for
breast feeding in Indonesia.
  
(2). The Suharto family and one of its former (?) cronies, the Wanandi
family, have strong business links with two of the largest Basle-based
pharmaceutical and chemical companies, Ciba Geigy and Sandoz. Ciba in
particular, had been involved with one of the Suharto family's earlier
cronies, Arief Husni, in the nearly US$ 1 million scandal of the so-called
"Bimas Gotong Royong" project to launch the Green Revolution in Indonesia
in 1969-1970, a corruption case that has been covered up b
  
(3). Swiss cement companies are also closely linked with the Suharto family
and one of their cronies, the Alamsyah family.
  
(4). One of the largest engineering companies, the Swedish-Swiss joint
venture, ABB, has also close business ties with the Suharto family and two
of their cronies, the Liem Sioe Liong and Murdaya families. This is also
the company involved in the notorious Bakun dam project in Sarawak.
  
(5). As far as banking is concerned, from the three largest Swiss
development-finance banks (SBC, UBS, and Credit Suisse), Credit Suisse has
made the highest number of business links with the Suharto family and their
cronies.
  
List of Swiss companies involved in business deals with the Suharto family
and their cronies:
----------------------------------------------------------------------------
------------------------
Dairy products & prepackaged food company:
--------------------------------------------------
1. Nestle's:
--------------------
One of the largest baby formula and prepackaged food producer in the world,
Nestle's, is a 57.65% shareholder in PT Nestle Indonesia, a member company
of Bimantara. This group is one of the ten largest Indonesian conglomerates
owned by Bambang Trihatmojo (Suharto's second son) and Indra Rukmana,
Bambang's brother-in-law (wife of Suharto's eldest daughter, Tutut). This
company, which was founded in March 1971, produces several brand of instant
food and drinks, such as Milkmaid, Dancow, Carnation, Lactogen, Milo,
Cerelac, Bear Brand, Nestum and Nescafe, as well as prepackaged spices
under the brand of Maggi. It has factories in Waru and Kejayan in East
Java, Lampung and South Sumatra.
  
Apart from diluting the drinks from Nestle's headquarters, the company also
buys fresh milk from 60 cooperatives of 25,000 smallholder dairy farmers in
the Malang highlands of East Java. As a good PR stunt, the dairy farmers
national cooperative, GKSI (Gabungan Koperasi Susu Indonesia ) owns 10.33%
of the company (Warta Ekonomi , June 22, 1992: 22, Nov. 21, 1994: 27-28;
Prospek, Nov. 26, 1994: 34-35; Asiaweek, May 5, 1995: 45;Swasembada [Swa
], August 1995: 12, 18).
  
Chemicals and pharmaceuticals:
-------------------------------------
1. Ciba Geigy:
------------------
1.1. In 1970, the Swiss chemical giant Ciba (probably before it merged with
fellow Basle-based firm, Geigy) took part in a massive programme to
introduce modern agriculture inputs (fertilizer, pesticides) to rice
farmers in Java, together with the German chemical giant, Hoechst, the
Japanese trading company, Mitsubishi, and an Indonesian company, Coopa
Trading Establishment. Coopa was registered in Lichtenstein, but was
actually owned by a Sino-Indonesian businessman, Arief Husni (Ong Seng
Kheng), the director of Ramayana Bank, in which Suharto's step brother,
Probosutedjo wasa a commisioner and shareholder and with which General
Soerjo, a special assistant of Suharto, was associated. It turned out to be
a major business scandal, because Coopa did not deliver US$ 711,000 worth
of pesticides it had been paid to do at the beginning of 1969, and again at
the end of 1969 it had been paid for fertilizer which had not been
distributed. Due to its strong political backing, Arief Husni was not taken
to court, although the Coopa case received strong criticism from the
special Anti-Corruption Commission set up by Suharto in 1971, in response
to the anti-corruption campaign of Indonesian students and intellectuals
(Crouch, 1988: 290; Robison, 1990: 253).
  
1.2. Distribution of Ciba-Geigy products in Indonesia is carried out by PT
Darya Varia Laboratories, a member company of the Salim Group, Indonesia's
largest conglomerate, where the Suharto family's interests are represented
by Sudwikatmono, Suharto's cousin, and two Suharto siblings, Siti
Hardiyanti Rukmana (Tutut) (Suharto's eldest daughter and currently,
Minister of Social Affairs) and Sigit Harjojudanto, Suharto's eldest son
(IEFR, 1997: 292).
  
2. Sandoz:
--------------
The sole agent of this Swiss pharmaceutical giant, a major competitor of
Ciba-Geigy, is PT Sandoz Biochemie Farma Indonesia, a member company of the
Gemala Group. This conglomerate was founded in the late 1970s by Sofyan
Wanandi (Liem Bian Koen), a former Catholic student activist who had been
deeply involved with his elder brother, Jusuf Wanandi (Liem Bian Koen) in
supporting Suharto's rise to power in 1965-1967. Sofyan, who worked closely
with Suharto's economic assistent, General Soedjono Humardani, was trusted
to manage the business companies of the Army foundation, Yayasan Dharma
Putera Kostrad, such as managing the Volkswagen sole agency, and many
others.
  
After ten years working for the Kostrad-linked companies, which were
Suharto's earliest money milking cows, Sofyan and his brothers built their
own business empire, which is known as the Gemala Group. The Sandoz sole
agent is managed by Biantoro Wanandi, a brother of Sofyan, who graduated in
pharmacy in Europe (Swiss, or Germany). Nevertheless, Sofyan himself has
still been closely associated with Suharto and the main Suharto-linked
conglomerate, the Salim Group, since he was appointed as the spokeperson of
a foundation, Yayasan Prasetya Mulia, which is chaired by Liem Sioe Liong,
the Salim Group chairman, acting as a spokeperson of the top
Sino-Indonesian business tycoons.
  
With his own business conglomerate, as well as his links through the
Prasetya Mulia Foundation, Sofyan Wanandi has been instrumental in
mobilizing support from young Indonesian Catholics and nationalists for the
Suharto regime, by offering them jobs in this vast business network. For
instance, Suryadi, the leader of the faction of the Indonesian Democratic
Party (PDI), which seized power from Megawati Sukarnoputri in mid 1996,
works as a director of one of the Gemala companies, PT Aica Indonesia. At
that time there were also rumours that Sofyan had funded the rebel PDI
congress in Medan which 'elected' Suryadi as the party's new chairperson.
  
It was exactly with this background that Suharto has found the Wanandis to
be excellent scapegoats for the current financial crisis in Indonesia.
Sofyan and his brother Jusuf have been interrogated for hours by Indonesian
military under the order of Suharto's son-in-law, Lieutenant General
Prabowo Subianto. The accusations are that they have funded the banned
left-wing People's Democratic Party (PRD), accusations which have been
engineered completely out of the blue.
  
This Suharto scheme to blame the Wanandis is one of the most bitter ironies
of the Suharto regime, since the Wanandis have been some of the strongest
apologists for the Suharto regime in its occupation of East Timor. While
Jusuf Wanandi, using his position as director of the quasi-intellectual
Catholic-dominated think-tank, CSIS (Centre for Strategic and International
Studies), has defended the occupation in many international seminars, a
younger brother of his, Fr. Markus Wanandi, has served the Indonesian
military for years by spying on Bishop Carlos Felipe Ximenes Belo as well
as on the students of the Catholic high school which this Indonesian Jesuit
priest directed (CISI, 1991: 265-269; numerous observations and
interviews).
  
Rescue company:
---------------------
1. International SOS Assistance:
-------------------------------------------
In 1994, Tommy Suharto's aircharter company, PT Gatari Air Service, formed
a joint venture with International SOS Assistance, which is called PT Intra
SOS Asindo. With an initial capital of US$ 100,000, and one of the largest
private helicopter fleets in Indonesia (in 1992, it already operated 46
helicopters, 34 of which were their own, plus seven fixed wing aircrafts,
two of which were luxurious executive airplanes), Tommy Suharto hoped to
tap into the lucrative safe and rescue businesses in Indonesia.
  
 The market for this service is predominantly the oil sector with its
dozens of oil rigs remoting in distant offshore and onshore places in the
Indonesian archipelago, hoping to tap into the lucrative Natuna gas field
as well as the Timor Sea oil and gas fields. It is a lucrative business
indeed, because seven years ago, in 1992, hiring a helicopter already
costed US$ 600 to US$ 1,600 per hour. Its Swiss partner, which has 25 years
experience in this field, provides the technical expertise in this area
(Prospek , Sept. 26, 1992: 46-47; Warta Ekonomi , April 27, 1992: 32, April
4, 1994: 30; Bisnis Indonesia , Jan. 19, 1995).
  
Cement companies:
----------------------
1. Unknown company:
--------------------------------
An unknown Swiss cement company is involved in the Tridaya Manunggal
Perkasa Cement Enterprise in the village of Palimanan, near Cirebon, West
Java, which was built in 1985. This company is a joint venture between the
Salim Group, which is partly owned by Suharto's cousin, Sudwikatmono, and
the Sahid Group, a hotel conglomerate owned by Sukamdani Gitisarjono, a
cousin of the late Mrs. Tien Suharto. The cement factory, which occupies
152 Ha of land, produces 1.2 million tons of cement per year, with an
investment at that time of Rp 235.5 billion (Soetriyono, 1988: 25-26;
Info-Bisnis , July 1994: 13).
  
2. Marine Cement Ltd. and Cementia Holding AG:
----------------------------------------------------------------------
These two Swiss cement companies together own majority shares in PT Semen
Andalas Indonesia, a large cement factory in Aceh, Northern Sumatra, with
Marine Cement Ltd. holding 14.82% and Cementia Holding AG holding 32.56%
shares. Three Indonesian companies own the rest, namely an Indonesian
state-owned bank, Bapindo, 17.30%, PT Gunung Sewu Kencana, a private
company, 6.08%, and PT Rencong Aceh Semen, 5%.
  
While only holding 5% shares, PT Rencong Aceh Semen was the original
promotor of this large cement factory in Aceh, to cater for the market of
Aceh, North Sumatra, and Riau, as well as to promote economic development
in this Indonesian province which harbours a strong separatist movement,
namely the Free Aceh Movement, or GAM (Gerakan Aceh Merdeka).
  
PT Rencong Aceh Semen is part of the Perwira Panagan Ratu Group, founded by
one of Suharto's cronies, the late Ret. General Alamsyah, and his sons,
Jusuf Harry Utama Alamsyah and Mohammad Ali Muda Eddy Alamsyah. Before his
retirement, Alamsyah had been Suharto's special assistant, Ambassador to
the Netherlands, Minister of Religion, and Coordinating Minister for
Politics and Security.
  
Last year, PT Semen Andalas Indonesia formed a partnership with the
French-based Lafarge Group to establish a new cement plant in Langkat,
North Sumatra, called PT Semen Langkat Sumatra, with a production capacity
of 1.4 tons per year.
  
The late Alamsyah was a strong Suharto loyalist, who even after his
retirement, mobilized Indonesian Muslim leaders to pray for Suharto's
so-called re-election as president. One of his legacies as Minister of
Religion is a controversial decree, which prohibits any Indonesian citizen
from converting from his or her religion, a decree that was issued to deal
with Muslim disatisfaction against what was perceived as massive
conversions from Islam to Christianity (Datatrust, 1986: 235-236; Prospek ,
6 March 1993: 21; August 13, 1994: 28; Economic & Business Review Indonesia
[EBRI ], April 16, 1997).
  
Engineering companies:
---------------------------
1. Asea Brown Boveri (ABB):
----------------------------------------
ABB was formed in 1988, from the merger of Swedish ASEA Group with Swiss
Brown Boveri Group. There are two agents of this Swiss-Swedish joint
venture in Indonesia. First, PT ABB Energy Systems Indonesia (ABB ESI),
which is a joint venture of ABB and two state-owned companies, PT PAL
Indonesia (the Navy shipyard) and PT Barata Indonesia (a heavy equipment
and railway train manufacturer); and second PT Abdibangun Buana. The first
one was under the directorship of Dr B.J. Habibie, Suharto's high-tech
wizard who has just been appointed as Vice President, and the second one is
part of the Cipta Cakra Murdaya (CCM) Group (formerly the Berca Group),
which consists of thirty companies.
  
The major owners of CCM are Murdaya Widyawimarta (Poo Tjie Gwan or Poo Djie
Thiong) and his wife, Siti Hartati Cakra Murdaya (Tjee Lie Ing). Since the
1970-an, they have been the major suppliers of electric installation
equipments to the Indonesian state electricy company, PLN. Through its two
main agents, ABB has supplied many of the major hydro-electric as well as
steam power plants. Its high level connections can be deduced from the way
ABB was appointed to build the Muara Karang steam- power station in West
Java, based on a top level Cabinet decision (only the Economic, Finance,
Industry and Trade Coordination) in 1993, without any open tender.
  
Not only to PLN but also to private conglomerates which are building and
operating their own private power plants are using ABB engines. For
instance, ABB gas turbines are used by the new cement factory in South
Kalimantan which belong to the Salim Group. Two ABB KA BC gas turbines have
also been installed in a new gas-fired power plant built by PT Energi
Sengkang in South Sulawesi. This power plant, which is parly owned by Siti
Hardiyanti Rukmana, Suharto's eldest daughter, will supply electric power
to the nickel mining and refining operation of the Indonesian subsidiary of
the Canadian nickel producer INCO in Soroako, South Sulawesi.
  
In addition, Murdaya Widyawimarta is also a commissioner of a major
property company, PT Dharmala Intiland, together with former Hopusing
Minister, Cosmas Batubara, and former Mining Minister, Dr. M. Sadli.
Meanwhile, Mrs. Siti Cakra Murdaya, whose companies, PT Hardaya Aneka Shoes
Industri (HASI) and PT Nagasaki Paramashoes Industry (NASA) are also the
main producers of Nike shoes in Indonesia.
  
Murdaya is also a practicising Buddhist and leads the government-sanctioned
Buddhist religious association, PERBUDHI. Through this corporatist
organization, Suharto attempted to mobilize support from Indonesian
Buddhists, especialy the rich Chinese Buddhists (Robison, 1990: 282; CISI,
1991: 136-139; IEFR, 1997: 476-477; Forum Keadilan, Sept. 2, 1993: 23;
Editor , Dec. 23, 1993, Ad.; The Australian, May 11, 1993, March 15-16,
1997; Asian Business Review, April 1997: 52-53; Jakarta Post, August 20,
1997; other sources).
  
(to be continued)