PROFITING FROM PEACE: The Political economy of Acehs Post-Helsinki reconstructionGeorge Junus Aditjondro

Working Paper #3, 2007

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PROFITING FROM PEACE: The Political economy of Acehs post-Helsinki reconstruction1=========================================================

By George Junus Aditjondro2POST-tsunami reconstruction in Aceh, after the signing of the peace memorandum beween the representatives of the Indonesian government and the Free Aceh Movement (= GAM, Gerakan Aceh Merdeka) in Helsinki on 15 August 2005, has solidified the unholy alliance between foreign and domestic business interests in the territory, which is still strongly guarded by the Indonesian military. One can describe the structure of businesses in the war-torn and tsunami-and-earthquake torn country as a pyramid, with foreign businesses on the top of the pyramid, followed closely by large domestic companies owned or with close links to members of Soesilo Bambang Yudhoyono and Jusuf Kallas administration; then state-owned companies called BUMN (Badan Usaha Milik Negara) in Indonesian; followed by businesses owned by Acehnese entrepreneurs, especially those pioneered by two entrepreneurs who were on the opposite side of the political fence, Surya Paloh and Muzakir Manaf; then comes the much smaller businesses owned by local Acehnese business people. Finally, at the bottom of the pyramid one can find small farmers and fisherfolks, many of whom are facing the danger of being squeezed out from their farms and fishing waters. The largest companies on the top of the pyramid are ExxonMobil3, which has been exploiting natural gas from the Lhok Sukon fields for the last two decades. Together with Pertamina, the Indonesian state oil and gas company, ExxonMobil owns PT Arun LNG, which liquefies the gas and export the LNG to Japan and South Korea.

The Paper is written based on the Fireld Research in Aceh sponsored by the International NGO Forum on Indonesian Development (INFID), in March May 2007. 2 ). Independent researcher, specializing in investigating regional conflicts in the Indonesian archipelago and postconflict and postdisaster reconstruction in Indonesia and East Timor. Apart from working voluntarily as research and publication consultant to Yayasan Tanah Merdeka in Palu, Dr. Aditjondro is a guest lecturer in Marxism, New Social Movements and ResearchMethodologyatSanataDharmaUniversitysPostgraduateProgramme.Hisrecentwork has been on the shrinking democratic space in Indonesia and East Timor (Aditjondro 2007a, 2007b). This paper is based on library research on Aceh which he has carried out in Australia since1998,andthreefieldtripstoBandaAceh,Meulaboh,andTakengoninearly2007. 3).Lastyear(2006),ExxonMobilbecamethebiggestcompanyonFortuneslistof500largestUS companies.ThisoffspringofJohnD.RockefellersStandardOil,thetrustthatwasbrokenupby theUSgovernmentundertheAntiTrustLawnearlyacenturyago,produced1.5billionbarrels ofoilandgasin2005.ItsmarketcapitalizationreachedUS$375billion,withanannualprofitof US$ 36.1 billion in 2005. It paid US$ 8 billion in dividends to its 2.5 million shareholders, employed83,700workersinsixcontinents,andspentroughlyUS$15billiononexplorationand production.ThecompanysUS$36.1billioninprofitsatatimewhenUScitizenshadtopayUS$ 2.50agallonforgasolinemadeExxonMobilatargetofcriticismbyUScitizensandSenators.Itis also drawing increased criticism by environmentalists for its support for drilling in the Arctic NationalWildlifeRefuge(Fortune,12April2006:5162).

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ExxonMobils supremacy as the largest company operating in Aceh, however, is currently strongly challenged by Indonesias largest private oil and gas mining company, Medco4. This company is producing 4,500 barrels of oil daily from its offshore Langsa Block, in a fifty-fifty joint venture with Mitsui Oil Exploration Company from Japan (Kompas, 7 Jan. 2004; Warta Ekonomi, 21 Febr. 2005: 21, 27; Swasembada, 7-20 Sept. 2006: 34). That did not satisfy Medcos appetite for more oil and gas fields: in April 2006, Medco took over 50% of the A Block concession area near Lhokseumawe, in a three fold joint venture with Japan Petroleum Exploration Co. Ltd. and Premier Oil Natuna Sea BV. This latest acquisition allowed Medco to suppy natural gas to the two fertilizer companies in Aceh, namely PT Pupuk Iskandar Muda (PIM) and PT ASEAN Aceh Fertilizer (Jakarta Post, 21 Sept. 2005; Koran Tempo, 22 Sept. 2005; Investor, 923 May 2006:25; Swasembada, 7-20 Sept. 2006: 48). Since the restoration of peace in Aceh, the mining sector has expanded beyond the oil and gas. Three companies are involved in exploring for gold, two of them foreign companies and one national company. The two foreign companies are Dutch Phillips, a Dutch company which has asked a favour from US President George W. Bush, to approach his Indonesian counterpart, SBY, to obtain a mining concession in the district of Aceh Barat Daya (Aditjondro 2005: 40). The second one is a Canadian mining company, East Asia Mineral Corporation, which is planning to mine gold in the highlands of Central Aceh, in the subdistricts of Bintang, Linge, Ketol, and Rusep Antara (formerly, Silih Nara). In fact, Thomas Mulya, an economic geologist employed by the company, has surveyed several rivers in Ketol and Linge subdistricts since 1995, long before the current rush for Acehs resources. In these discoveries, known as the Takengon Project, the gold ore was found at a depth of 400 to 800 meters at a rate of 11 ppm, and at five meters below the earth surface, the gold ore is mixed with copper, tin, and zinc. Local villagers along the Pameu river system in Rusep Antara subdistrict have been panning gold from the river (Serambi Indonesia, 8 Nov. 2006; Investor Daily, 1 March 2007). The third foreign mining company planning to invest in Aceh is Freeport McMoRan, the US company which is mining the copper, gold, and silver deposits in West Papua. This company is allegedly negotiating a deal with Aceh-born politician and businessman, Surya Paloh, chairperson of Golkars Advisory Board and close friend of President Susilo Bambang Yudhoyono (Nasution 2005: 54-6), to explore the gold fields in Beutong Ateuh (Aditjondro 2007; Serambi Indonesia, 10 Febr. 2007 5).).MedcoisafamilycompanyofArifinPanigoro,formerlyacronyofSoeharto,whoseinlaw, EdiKowaraAdiwinata,wasgivensharesinthecompany,whichafterEdiKowarasdeathwas passed over to his son, Indra Rukmana, the husband of Soehartos eldest daughter, Siti Hardiyanti Rukmana, aka Tutut. Apart from his oil and hotel business, Arifin and one of his siblings,YunarPanigoro,ownatimbercompany,PTSegaTunggalIndonusa(PDBI1994:B261). 5)InthegoldmineexplorationbytheMediaGroupinNaganRaya,fourexpertsusedFreeport miningoverallcustoms,asobservedbyAlMujahid,SeuramboeAcehjournalist,on23March2007, andrelayedtotheauthorinMeulaboh,onMonday,30April2007.Localworkersatoneofthe exploration drilling site also told the author of this report, that foreigners from Freeport were4

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Geologists and mining engineers working for Surya Palohs Media Group are currently exploring the gold deposits of Beutong Ateuh, about five kilometers from Babuk Mukaramah, a famous dayah or pesantren (Muslim boarding school) (see Attachment I). When the author of this report visited the exploration site on 1 and 2 May 2007, accompanied by NGO activists from West Aceh, the exploration had only taken place for three months, with huge drilling equipments drilling the ore body down to 800 months below the earth surface. In the exploration base camp we were shown ore samples, which were packed in 200 kg bags, and flown by the commercial flights from Meulaboh to Medan, from where the samples were flown to Intertech laboratory in Jakarta where the gold and associated minerals in the ore body were identified. Apart from the engineers who had experience in exploration work in West Papua, the sixty workers were recruited by the Media Group through the Beutong Ateuh mukim head. In addition to exploring for gold, Surya Paloh (born in Kutaraja [= Banda Aceh] on 16 July 1951), is also exploring for coal in Meureboh and Kaway XVI subdistricts in West Aceh and Kuala subdistrict in Nagan Raya. Coal from those mines will be used, among others to fuel the steam power plant that the Media Group is build in the Kuta Makmur village in Kuala subdistrict, Nagan Raya. Interestingly, the capital for Palohs new business enterprises in Aceh comes partly from the Rp 200 billion donations from viewers of Palohs television station, Metro TV, aimed to help the victims of the December 2004 earthquake in Aceh. These funds are managed by Palohs Sukma Foundation, which is officially, financing charity activities, namely the reconstruction of schools in tsunami and earthquake-hit villages (Nasution 2005: 33; Aditjondro 2007). Surya Paloh is not a newcomer to the Aceh business scene. His catering company, PT IndoCater, which employs more than 3,000 workers, and obtained credits from Bank Bumi Daya (BBD) due to Palohs position as chairperson of the Veteran Childrens Communication Forum (FKPPI = Forum Komunikasi Putra-Putri Purnawirawan Indonesia) and closeness to the Soeharto family6, has catered for the logistics of many large foreign companies, a.o. Exxon Mobil in Lhokseumawe and PT Pupuk Kaltim in East Kalimantan (Swasembada, 31 May-21 June 2001: 83; Nasution 2005: 40-1 ). But with the reconstruction rush in his home province, many new business opportunities have been opened for him, using charity funds from Metro TV s viewers.

visiting the site on 2 May 2007. Other sources told the author of this report that the mining operation was a joint venture between Surya Palohs Media Group and Ibrahim Risyads RisyadsonGroup. 6)SuryaPalohismarriedtoRositaBarack,aneldersisterofRosanoBarack,alsoknownasCano. Cano is a close friend of Bambang Trihatmodjo, former President Soehartos second son and owned of the Bimantara business group. In fact, Cano is also a founding shareholder of the Bimantara Group. In addition, Surya Paloh collaborated with Bambang Trihatmodjo in developing the veteran childrens organization. FKPPI (Nasution 2005: 42, 44, 47). Palohs son, Prananda, is also very close to Tommy Soeharto, since Tommys luxurious US$ 13.7 million yacht, Obsessions, was for years registered in Cayman Islands under the Pranandas name (interviewswithakeyinformantinAustralia,1998till2001).

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A similar strategy of improving ones companys public profile by donating relief funds generated from the public, while expanding businesses enterprise in the tsunami and earthquake-torn province is also adopted by other Indonesian celebrities, such as Siti Hartati Murdaya and Aburizal Bakrie. Siti Hartati Murdaya (= Chow Lie Ing) has the dual function as a top business woman and as a leading philanthropist, being the chairperson of two Buddhist organizations, WALUBI (Perwakilan Umat Buddha Indonesia ) and KCBI (Keluarga Cendekiawan Buddhis Indonesia). Since the Soeharto era, she has been one of the top financial supporters of Soehartos political party, Golkar, which is now led by the Vice President, Jusuf Kalla, while her husband, Murdaya Widyawimarta (= Poo Tjie Gwan) is currently a parliamentarian of Megawati Soekarnoputris party, PDI-P (Swasembada, 619 April 2006: 98-102). She is also known to be close to a number of (retired) Army general, a.o. the former intelligence chief. Let.Gen. (Ret) A.M. Hendropriyono (Aditjondro 2002: 26). Through WALUBI, she has donated logistics to Acehs tsunami and earthquake victims in collaboration with the Indonesian Air Force. It is unthinkable that the leading businesswoman in assembling Nike sports shoes and electric power generating and distributing projects, with close links to the Swedish-Swiss joint venture, ABB, and the Cumming generator set producer from the US (Aditjondro 2006: 206-9; Warta Ekonomi, 28 July 2006: 14-17), has no plans to expand her business network in Aceh and also benefit from the reconstruction pie. As I have observed in Bantul, the earthquake hit subdistrict of Yogyakarta, the same buses with the WALUBI signs simultaneously carry the signs of her Nike shoes manufacturing company, PT Hardaya Aneka Shoes Industry. So, since WALUBI has focused on the Aceh Jaya district, where the Buddhist organization has built permanent houses for tsunami victims in Calang, it is quite likely that the Murdayas CCM (Central Caraka Murdaya) Group, which is also in forestry and oil palm plantations, may be interested in those those two business sectors, in addition to building in power generators and power lines. Meanwhile, Aburizal Bakrie, or Ical, as he is popularly called, is the Coordinating Minister for Social Welfare, in charge of the rehabilitation of Aceh. But in addition and prior to that public position, Ical is a major shareholder in the Bakrie Group of companies. As in the case of Surya Paloh, the Bakrie Group also own a television station, AnTV, together with the Parliament speaker, Agung Laksono. The station is daily managed by Icals son, Anindya N. Bakrie. Donations for Aceh disaster victims by AnTV viewers is used by AnTV to set up nine new dayahs for female students in Banda Aceh and Meulaboh, the two major earthquake and tsunami hit towns. This educational program is carried out by AnTV in cooperation with Pesantren As-Syafiiyah, led by well-known female Muslim scholar, Tuty Alawiyah (Press Release from Program Dompet antv Peduli-Tabahlah Indonesia, 13 May 2005).

Aceh, dumping ground for carcinogenic substances?

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UNFORTUNATELY, while helping to educate female Acehnese children, the Bakrie family has simultaneously carried out a disastrous housing scheme. The familys charity arm, namely the Bakrie Foundation, has been strongly criticized by environmental NGOs in Aceh, for building 240 houses from asbestos in the Deyah Raya Village in the Syiah Kuala Subdistrict in Acehs capital city, Banda Aceh. Ironically, although Andy Siswanto, the Housing and Resettlement Deputy of the Aceh and Nias reconstruction supervisory body, BRR NAD-Nias (Badan Koordinasi Rehabilitasi dan Rekonstruksi Nanggroe Aceh Darussalam dan Nias), has on 8 January 2007, issued an official Memorandum No. M-010/BRR.08/I/2007, prohibiting the use of asbestos in houses built for the tsunami victims, BRR NAD-Nias has not had the courage to force the Bakrie Foundation to replace the houses which they build from that carcinogenic substance (WALHI Aceh Press Statement, 2 February 2007). What we see here is a sophisticated way of getting rid, or marketing, products which are prohibited in other countries, and even also in Indonesia, through disaster relief work which is normally seen as charity. According to WALHI Aceh Advocacy and Campaign Manager, Dewa Gumay, asbestos used in the houses built by the Bakrie Foundation comes from Bakrie Group member companies (idem). The Bakrie Foundation, however, is not the only pseudo-commercial charity using this dangerous substance. As I observed on 8 February 2007, the Buddhist Tzu Chi Foundation7 has built even more houses with asbestos walls in the West Aceh district. It is planning to build 1,100 of such houses in the Meureboh subdistrict, of which about a half of them had been finished during my field observation. Likewise, as I observed on 12 April 2007 with colleagues from WALHI Aceh and Acehkita tabloid, the same foundation has built 1800 similar houses with asbestos walls near Banda Aceh, the capital of Aceh. This charity is supported by several large Buddhist-Chinese owned business conglomerates, such as the Artha Graha Group of Tomy Winata and Sugianto Kusuma (aka A Guan) and the Sinar Mas Group of Eka Tjipta Widjaja and his sons and daughter. Sinar Mas, is currently approaching Ir. Azhar Abdurrachman, the bupati, or, district head of Aceh Jaya, to expand its oil palm plantations from North Sumatra, Riau, Jambi and Kalimantan to Aceh (Serambi Indonesia, 12 April 2007). Interestingly, the Artha Graha Group has close connections to President SBY, through SBYs security advisor, Ret. Mayor General TB Silalahi, a top executive of Artha Graha who has facilitated the expansion of Artha Graha to Nias, by forming joint ventures with the North Sumatra top Chinese business triad (see Aditjondro 2006: 416-8). And although Artha Grahas proposal for a blue print for the reconstruction of the fatally damaged district capital of Aceh Barat, Meulaboh, has been rejected, due to the

)TheheadquartersofthisfoundationisinTaiwan.ItisitsIndonesianbranchwhichisbuilding the asbestos walled houses in Aceh, presumably with the financial support from the business conglomeratesownedbytheexecutivesofitsIndonesianbranch.7

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opposition of Western Aceh religious leaders (ulama),8 the group still operates indirectly -- in Aceh. Hence, the foundation is one of the largest private Indonesian non-governmental contributors during the emergency phase as well as currently during the rehabilitation and reconstruction phases in Aceh. According to Sugianto Kusuma, the deputy chair of the foundation has claimed that it was going to build 2000 permanent houses in Banda Aceh and 1,000 in Meulaboh (Aditjondro 2005: 37). Those are only part of the entire range of reconstruction activities of this foundation, which has last year reached US$ 37 million, and includes economic development, education, infrastructure, housing & land, institutional development, general public services, institutional development - public order and safety, in the districts of West Aceh, Greater Aceh, and the city of Banda Aceh (BRR NAD-Nias 2006: 275). So, one can see from these examples that BRR does not seem to have the power, the courage, or the moral ground to prohibit the use of dangerous substances in the housing schemes. It may not even have the power of courage to act as a filter for other harmful projects to be build in Aceh, which may be caused by the lack of impartiality of the BRR head, Kuntoro Mangkusubroto, as we will see later in this position paper.

State-owned civil engineering companies:WITH some exceptions, as we will see later in this report, the reconstruction of major infrastructure projects, damaged by the December 2004 tsunami and earthquake, has been carried out by civil engineering companies owned by the Indonesian government and managed under the umbrella of the Department of Public Works. PT Wijaya Karya, also known as WIKA, is one of them. PT PP (Pembangunan Perumahan) is another one, which has been the main, or sole contractor of the Buddha Tzu Chi Foundation in building the asbestos-walled public houses in Banda Aceh and Meulaboh. PT PP has two offices in Banda Aceh and two offices in Meulaboh to support their work (NAD 2006-2007 Phonebook, Yellow Pages, p. 19). PT PP has also been chosen as the contractor to build several buildings financed by donations from readers of Kompas, Indonesias largest daily newspaper. These include the high-rise houses for lecturers of IAIN Ar-Raniry postgraduate program, a dormitory for students of Syiah Kuala University, both in Banda Aceh, and an integrated school from kindergarten to high school in Meulaboh (Kompas, 28 Dec. 2005: 36). ) It is wellknown among Aceh ulama and prodemocracy activists that Artha Graha, whose mainfinancialwizardisSugiantoKusuma,alsoknownasAguanunderhisChinesename,made their fortune by organizing gambling and high class prostitution (see Aditjondro 2006: 41920). Hence, the Acehnese ulama rejected Artha Grahas offer, but did not resist the construction of thousands of houses by the Buddha Tzu Chi Foundation where Sugianto Kusuma is vice chairmanoftheIndonesianbranch.8

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Three other state-owned companies involved in the reconstruction of Aceh are PT Waskita Karya, PT Adhi Karya, PT Istaka Karya, PT Hutama Karya, and PT Nindya Karya. Waskita Karya has three offices in Banda Aceh, Adhi Karya has two offices in Meulaboh and another one in Lhokseumawe, Istaka Karya has two offices in Banda Aceh, Hutama Karya has an office in Banda Aceh, Nindiya Karya has an office in Banda Aceh (Trust, 4-10 April 2005: 74; NAD 2006-2007 Phonebook, idem). This dominant role of state-owned construction firms in Aceh has not pushed all other companies out of the construction field, especially in road building. Local companies have still obtained large construction orders. For instance, a local businessman, H. T. Alaidinsyah, also known as Haji Tito, the only local Acehnese contractor who owns heavy equipment for road building and bridge construction. He has built a segment of the provincial road from Meulaboh on the West coast to the borders between West Aceh and Central Aceh, financed from the 2000 annual provincial budget, as well as the road from Meulaboh to Tutut, on the upstreams section of the Woyla river in West Aceh, and from Tutut to Geumpang in the Pidie district. Unfortunately, the roads built by this local businessman is of poor quality, which could be linked with his capacity to serve district and provincial politicians and bureaucrats.9 . Then, on the west coast of Aceh, the Japanese and US governments have been involved in building the West Coast road from Banda Aceh to Meulaboh. The section from Calang to Meulaboh was financed by the government of Japan and was finished in December 2006. This segment of Acehs West Coast road, which was heavily damaged by the earthquake and tsunami on 26 December 2004, was built by the earlier mentioned Aceh businessman, Haji Tito, who had subcontracted this road section to the state-owned construction firm, PT Adhi Karya.10

Reconstruction coordinator as cement producer:THE reconstruction of millions of houses and other buildings, has created a lucrative market for several cement producers, such as the Andalas cement factory (PT Semen Andalas Indonesia, or PT SAI), which has a wide network of distributors in Aceh. The company has since 1997 formed a joint venture with the French Lafarge company, and plans to establish a sister company in North Sumatra, PT Semen Langkat Sumatra. One small yet important shareholder of PT SAI is PT Rencong Aceh, a member company of the Perwira Panagan Ratu Group, founded by the late Ret. General Alamsyah Ratu)H.TitoisthechairpersonoftheWestAcehchapterofthecontractorsassociation,GAPENSI, and deputy chairperson of the provincial GAPENSI board. Formerly a member of Soehartos politicalparty,Golkar,afterSoehartosdescentfrompowerhemovedtoAmienRaisPAN,and becamethedeputychairpersonofPANforWestAcehdistrict.(informationviasmsfromAbdul Jalil,directoroftheGrassrootsSocietyFoundationinMeulabohon23Mayand6June2007). 10). Mentioned on the memorial, signed by the Bupati of West Aceh, built to commemorate the completionoftheCalangMeulabohroad,donatedbythepeopleofJapantothepeopleofAceh (ObservedbyAbdulDjalilandrelayedbysmstotheauthorofthisreporton26May2007).9

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Prawiranegara, a crony of former President Soeharto, and former Special Assistant of the President, former Indonesian Ambassador to the Netherlands, former Minister for Religion, and former Coordinating Minister for Politics and Security (Aditjondro 2006: 206; Advertisement in Serambi, 8 Febr. 2007). PT Semen Andalas Indonesia, however, is facing tough competition from cement imported from Java from PT Indocement Tunggal Prakarsa Tbk and PT Holcim Indonesia Tbk (formerly known as PT Semen Cibinong), and from PT Semen Padang, a state-owned company based in West Sumatra. Both Java-based cement factories formerly belonged to members of Soehartos extended family. PT Indocement, which uses the brand name, Semen Tiga Roda, once belonged to Liem Soei Liong and Soehartos cousin, Sudwikatmono, while PT Semen Cibinong once belonged to Hasyim Djojohadikusumo, whose elder brother, (Ret) Lieut. Gen. Prabowo Subianto had married Soehartos second daughter, Siti Haryati Hediyadi. But while PT Indocement has been taken over by Heidelberger Cement Group, PT Semen Cibinong has been taken over by a Swiss company, the Holcim Group, Through its overseas subsidiary, Holcim Participation (Mauritius) Ltd, Holcim owns 77.3% shares of the former Semen Cibinong factory, which is now called PT Holcim Indonesia Tbk. (Prospektif, 28 March 3 April 2005: 13; Investor, 24 Jan.- 6 Febr. 2006: 50-3; Swasembada, 6-19 April 2006: 76-9). PT Holcim Indonesia enjoys special consideration to be used by contractors in Aceh and Nias, since Kuntoro Mangkusubroto, the head of BRR NAD-Nias, is also a commissioner of PT Holcim Indonesia Tbk since 11 December 2001. Kuntoro Mangkusubrotos special links with PT Holcim Indonesia has also resulted in special deals with the company, not necessarily related to its specialty in producing cement. The company had obtained a special order to destroy outdated medicines after the tsunami on the island of Nias (B-watch, Oct. 2006: 34; Ad. in Jakarta Post, 4 April 2007, p. 9). Hence, Andalas, Padang and Holcim cement are the three most popular brands of cement used in many infrastructure projects in Aceh. These projects have been distributed to several foreign and domestic companies. The reconstruction of the Krueng Raya harbour in Aceh Besar district, has been carried out by a Dutch company, while the reconstruction of the Meulaboh harbour has been carried out by the Singaporean branch of Mercy Relief, supported by the Singaporean Government. The construction of the Tjut Nyak Dien airport, near Meulaboh, has been carried out by BRR.

Reconstruction support services:THE influx of expatriates involved in, firstly, the relief work, which has been followed by rehabilitation and reconstruction work, has obviously created the demand for hotels, cafes, malls, supermarkets, and, not to forget, the up-to-date communication gadgets, such as cell-phones. Swiss-bellhotel International, has already set up its hotel in Banda Aceh, where the corporate rate for rooms is around Rp 650,000 per night. A slightly cheaper hotel is Oasis, which is owned by Todung Mulya Lubis, a well-known

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Jakarta-based top business lawyer and human rights activist, and his business partner, John Sinaga, architect and owner of Hotel Silintong on Samosir Island on Lake Toba. The daily rate of this 3-starred hotel is up to Rp 500,000 per night. Then, although it has an expatriate manager, the Banda Aceh Swiss-belhotel is a joint venture between Swissbelhotel and Hermes Thamrin, the CEO of Nokia Indonesia, as the largest shareholder, Surya Paloh, and AzwarAbubakar, a former governor of Aceh. Starbucks and Caswell are the two most frequented Western-style coffee shops in Banda Aceh. While Starbucks only serves coffee from different parts of the world, Caswell and Pace Bene, an Italian food restaurant which is also located in Peunayong, in the heart of Banda Aceh, also serve alcoholic drinks. This shows a degree of tolerance shown to non-Acehnese, especially expatriates, since the consumption of alcoholic drinks is prohibited under Islamic law. Fast food restaurants, such as KFC, A & W, Pizza Hut and Pizza House, have also appeared in Banda Aceh. Not surprisingly, and not necessarily connected with the Helsinki agreement, Finland-made Nokia cellphones are the most popular cellphone brand in Aceh, or, at least, in Banda Aceh.11 Its show room appeared in Banda Aceh in mid 2006 in Peunayong, in the centre of Banda Aceh, where Caswell is also located. The second most popular cellphone used in Aceh, is Sony Ericsson (Basuki 2005). With Nokias close ties with the Indonesian cellphone operator, Telkomsel (Press Release Nokia, 14 June 2005), Nokia cellphones and Telkomsel vouchers are most widely used in Aceh. Telkomsels red-and-white colored towers are currently spread out all over Acehs country side, as is the case in most remote places in Indonesia. Different brand of cars are also competing for a market share in Aceh. Unlike other parts of Indonesia where cars originating from Japan and South Korea dominate the market, in Aceh cars from other parts of the world, especially Western Europe and North America, are trying to outsell each other, using different marketing gimmicks. PT BMW Indonesia is trying to compete with Ford, which claims to be the largest automotive company in the world, by donating three laboratory cars to secondary school children in Banda Aceh, in collaboration with Indonesias second largest Islamic organization, Muhammadiyah (Serambi Indonesia, 11-12 April 2007). This is probably their way to show to Acehs young generation, that German automotive technology, represented by BMW, is superior to the US, or Ford, technology. While cars, cellphones, cafes, and fast food are more closely associated with the middle and upper classes involved in the reconstruction business, one company which has certainly benefited from the 2004 tsunami and the following emergency relief, rehabilitation and reconstruction work is PT Indofood Sukses Makmur. Instant noodles made from flour, which in turn is made from wheat imported from Australia, the US, ) Due to former President Martti Ahtisaaris role in brokering the Helsinki peace agreement between GAM and the Government of Indonesia, Finlands reputation as the country where NokiaisproducedmayhaveraiseditspopularityinAceh.Nevertheless,anyincreaseinNokias marketbenefitstheformerPresidentsson,MarkoAhtisaari,whohappenstobeoneofNokias director.11

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Canada and Argentina, have increased the value of Indofoods shares. Ironically, thanks to the tsunami in Aceh, the values of Indofoods shares had risen from Rp 700 800 per share before the tsunami, to Rp 820 on 14 January 2005 (Trust, 17-23 Jan. 2005: 17, 1016 April 2006: 8).

The Vice Presidents business interests:DISASTERS and the following emergency relief work, rehabilitation and reconstruction often involves instant procurement of vehicles to transport logistics needed by the disaster victims. In the case of Aceh, Vice President Jusuf Kalla (JK) and President SBY themselves have been accused of manipulating their power to use public funds to import twelve helicopters, presumably to be used during natural disasters. Interestingly, those twelve used German helicopters were purchased not by the Indonesian government, to begin with, but by a private company, PT Air Transport Services, owned by the Vice Presidents younger brother, Achmad Kalla. Nevertheless, the Vice President, in his private conversation with the President on 6 December 2006, and the President himself in his memo to the Finance and Transportation Ministers on 7 December 2006, urged the government to pay hourly charter rates of those helicopters of US$ 1500 for 45 days, enough to cover the purchase of those privately-owned helicopters. To insure those imported helicopters, PT Air Transport Services appointed PT Asuransi Indo Trisaka, a company partly owned by Alwi Hamu, a long time close friend and staff of the Vice President (Tempo, 1 April 2007: 26-36). Fortunately, since Finance Minister Sri Mulyani refused to allocate those funds, the helicopters were seized by Indonesian custom officials, since the company owed Rp 2.1 billion duties to the government, after some of those helicopters had been used to help flood victims in the Aceh Tamiang district, last December (idem). Rumours are circulating in Banda Aceh and Meulaboh, that Kallas business interests in the reconstruction of Aceh, are not limited to that helicopter scandal. According to Intelijen, a weekly intelligence tabloid, JK is grooming three persons to conduct recovery businesses in Aceh, namely his brother-in-law, Aksa Mahmud, owner of the Bosowa business group, Paskah Suzetta, Minister of Development Planning and head of the National Development Planning Body (BAPPENAS), who is also a respected property developer, and an un-named business person of Chinese origin. The latter is involved in development projects in Meulaboh (Intelijen, 4-17 Jan. 2007: 15). Further investigation is needed to determine who, or which company, if any, are acting as proxies for JK and his extended family. Possibilities are still open that some companies linked to the Vice President are, or, will take part in the reconstruction business in Aceh. In particular, companies run by his son-in-law, Susanto Supardjo, husband of Muchlisa (Lisa) Jusuf (38), the VPs eldest daughter. This is considering the fact that Susanto and Lisa are running a family owned construction firm, PT Kalla Inti Karsa, which is involved in the oil business in Bontang, East Kalimantan, and is aiming at a share in the oil construction business in the newly opened Cepu Block in Central and

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East Java (Gatra, 20 Oct. 2004; Kontan, 24 August 2005; Prospektif, 10-16 April 2006: 15, 21). One of JKs family companies, PT Bumi Karsa, also has a history in building roads and dams, and upgrading airports, namely the Makassar, Biak, and Banda Aceh airport. Another Kalla family company, PT Kalla Lines, has a special ship to carry asphalt for the reconstruction of roads. This ship is managed by Langlang Wilangkoro, JKs son-in-law from his second daughter, who also manages PT Nusantara Air Charter, which leases transport airplanes such as Fokker F-28 (Prospektif, 10-16 April 2006: 21; Tempo, 30 Oct. 2005: 84). Hence, it is quite possible that the Vice Presidents relatives also have their fingers in Acehs reconstruction pie. Anyhow, with the appointment of Halim Kalla, one of the Vice Presidents younger brothers, as a commissioner in Lion Air since the end of 2004 (Prospektif, 10-16 April 2006, Cover Story, pp. 12-19), the Kalla family is also benefiting from the increased flights to and from Banda Aceh.

Muslim organizations and parties benefiting from the reconstruction pie:DESPITE its specific character as the only province with strong Islamic characteristics, recognized by the Indonesian state through Law No. 11/2006 on Acehs Government (Undang-Undang No. 11/2006 tentang Pemerintahan Aceh), only a few Indonesian Islamic organizations and political parties with close ties with the current SBY-JK regime, have been prioritized in distributing rehabilitation and reconstruction funds in Aceh. The first one is the 40-million members strong Islamic social and educational organization, Muhammadiyah, currently led by Din Syamsuddin, whose cadres dominate the Department of Education, has its national headquarters in Yogyakarta, where many Muhammadiyah members are teaching at the Gadjah Mada University, including the current Minister for Education, Bambang Sudibyo. Then the second one is PPP (Partai Persatuan Pembangunan, or, United Development Party), whose cadre, Bachtiar Chamsyah, holds the lucrative portofolio of Minister for Social Affairs. In fact, the Department of Social Affairs, according to my sources in Aceh, has encouraged several international relief organizations to work closely with Muhammadiyah. As a result of this political background, through its headquarters in Yogyakarta, Muhammadiyah and its affiliated organizations have become partners of the World Food Programme (WFP) and UNICEF, two UN agencies, and Mercy Relief Singapore. WFP has distributed food aid, after they had been identified by PT Surveyor Indonesia, whom in turn was appointed by the rehabilitation and reconstruction coordinating body, BRR NAD-Nias. UNICEF has supported the reconstruction of schools and child care centers, while Mercy Corps Singapore, in addition to assisting the rehabilitation and reconstruction of schools, has been involved in the reconstruction of the Meulaboh port, which was completely destroyed by the December 2004 tsunami.

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In a similar fashion as the Muhammadiyah connections, Minister Bachtiar Chamsyah, a PPP appointee, has distributed part of the Social Affairs aid through PPP members as contractors. This has especially been the case with fishing boats donated to fisherfolks, and calves donated to farmers. These calves have been donated to farmers who were members of an organization promoted by the Department of Social Affairs, FKPSM (Forum Komunikasi Pekerja Swadaya masyarakat ). Unfortunately, boats and calves which do not match the described qualities have been observed by NGO activists whom I interviewed in Meulaboh on 8-9 February 2007.

Military business links:DURING the initial emergency phase, the military played an important, and in some places, decisive role in monopolizing the relief distribution. The reborn Islandar Muda Army Command (Kodam I Iskandar Muda) is divided into two Military Resort Commands (Korem), namely Korem 011/Liliwangsa, centred in Lhokseumawe, and oversees the huge industrial complexes on Acehs east coast, and Korem 012/Teuku Umar, which overseas security in Acehs capital, Banda Aceh, the free trade zone of Sabang on the island of Weh, and the Greater Aceh (Aceh Besar) district. During the initial emergency relief stage, Army Colonel Gerhan Lantara, Commander of the Korem which overseas Meulaboh, practically monopolized all the relief distribution which had to be pooled under Army Supervision in the Army barracks. This East Timor war veteran, who had been involved in provoking the bloody crackdown on youth activists at the Santa Cruz cemetery in Dili on 12 November 1991, personally signed all memoranda to release the relief from the Army-controlled depot. This military red tape had caused many disaster victims to suffer from hunger, causing them to protest against Col. Lantaras red tape. Lantara was eventually removed and was honoured by his superiors in Jakarta, although he and his subordinates benefited personally from the relief aid. In addition to cutting their own part from the relief aid, military personnel also looted the peoples personal items, since they controlled the entire town of Meulaboh during the first fortnight after the tsunami. Hence, NGO activists I have interviewed in Meulaboh, had questioned the honoring of Col. Lantara. Meanwhile in Banda Aceh, relief distribution was monopolized by the Air Force, since they oversee the security at the Islandar Muda airport, outside Banda Aceh. This had caused trouble for Farid Faqih, an NGO anti-corruption activist who tried to release and distribute some of the relief at the airport for tsunami victims who had not been assisted, that far. He was beaten and detained for a short period by Airforce personnel at the Iskandar Muda airport, before being released due to public pressure. During the initial rehabilitation and reconstruction phase, the Army was also involved in opening up the road from Teunom to Arongan in West Aceh. Currently, the military does not seem to carry out their own businesses in the Western Aceh districts, but act, instead, as guardians for Surya Palohs coal and gold mining operations. Paloh is, in fact, the son of a retired military officer, and was head of the retired military childrens organization, FKPPI (Forum Komunikasi Putra-Putri Purnawirawan ABRI Indonesia).

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Military businesses, can be differentiated between businesses affiliated with military institutions, namely the KODAM, KOREM, and KODIM; businesses owned by relatives or family members of top military officials12; and the renting of military owned properties to private companies. Examples of the first type is the special relation between Husaini Setiawan from PT Kana Family Group with the KOREM in Lhokseumawe, with the approval of the KODAM, and the opening up of the military owned golf course in Lhok Nga to the public. Another example is the sawmill in Jalan Kotalintang Bawah in Kota Kuala Simpang in Aceh Tamiang district, where logs from whatever legal or illegal logging operation is sawn into lumber and sold to the public. An example of the second type is how children of the Army Commander, Mayor General Supiadin AS, like children of other VIPs at provincial and district levels, benefited from the reconstruction pie by using cronies such as Dek Gam and Dek Cut through PT Sinar Desa, and Marzuki Bintang. In the Beutong subdistrict of West Aceh, the police commander, AIPTU Banta Amat and the former Army commander, (Ret.) Captain Samaun, control large tracts of land from where their workers extract logs for timber. The current police commander, has hold his post for more than one period, and has probably been able to retain that lucrative post by bribing his superior. The land he controlled reaches around thirty hectares, from where his workers harvest the logs sawn into timber. His tract of land is quite obvious from the road, which links Meulaboh with Takengon, because near one of the shacks of his workers a sign is planted, saying: Gubuk Kaposek, or the police commanders shack, as observed by the author of this report on 1-2 May 2007. An example of the third type is the renting of military land in the Neusu area in Banda Aceh to Wong Solo, a Yogya based fried chicken restaurant. Finally, a handful of companies set up during the Soeharto presidency and were formerly owned by Soehartos relatives and cronies, also involve retired officers. One of the most outstanding ones is PT Tusam Hutani Lestari, a timber concession in Takengon, Central Aceh which is owned by (Ret) Lieutenant General Prabowo Subianto and his younger brother, Hasyim Djojohadikusumo, whose office is in the Bidakara Tower on Gatot Subroto Road in South Jakarta. Apart from PT Tusam Hutani Lestari, there are also other timber concessions and paper and pulp mills operating in Central Aceh, namely PT Alas Helau13, PT Aceh ) The recent flood in Aceh Tamiang is allegedly caused by illegal logging carried out by militarypersonnel,assistedbytheiroperatorsandcronies,intheGunungLeuserNationalPark. Logsfromthisnationalparkhasbeentransportedforuseinbuildingresettlementhousesforthe refugees,aswellasformorecommercialuseinNorthSumatera,aswellasinNorthAceh,East Aceh, Aceh Tamiang, and South East Aceh. This was relayed to the author by a postgraduate studentfromAceh,whileontheflightbackfromMedantoYogyakarta,on11June2007. 13)PTAlasHelau,whichisalsoashareholderinthepapermill,PTKertasKraftAceh,ispartly owned by the family of Ret. General Ibnu Sutowo (Prospektif, 915 January 2006: 13). The late Ibnu Sutowo is the former president director of Indonesias state oil and gas company, PERTAMINA,whichmadethecompanynearlybankruptduetotheUS$10billioncredittogas tanker producers in the US and their Swiss banker, Roy Rappaport. Nevertheless, the retired generalandSoehartosgolfingfriendwasnevertakentocourt,andonhisdeath,hewasburied12

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Mdf Wood Product, PT Takengon Paper and Pulp, and PT Indonusa Indrapura14, and PT Kertas Kraft Aceh, which were or still are owned by members of the Soeharto family and their cronies, which are all threatened by Governor Irwandys pledge for a moratorium on all logging activities in Aceh, regardless of whether they are illegal or legal. That is probably why PT Tusam Hutani Lestari and PT Kertas Kraft Aceh, put big advertisements in Serambi Indonesia , Acehs biggest daily on 8 February 2007, applauding the inauguration of Irwandy Yusuf as Governor and Muhammad Nazar as his deputy. In addition to Prabowo Subianto, another retired general and trusted crony of the former dictator, Soeharto, who has numerous business interests in Aceh is Bustanil Arifin. With his daughter and sons, Arnie, Alex, Alwin and Emil, they formed a conglomerate, the Danitama Group, with its holding company, PT Daniputra Nugra Utama. They control three oil palm estates (see Attachment II), and a frozen shrimp factory, PT Putrianemon Sakti, in Aceh. Interestingly, one of their oil palm estates, PT Gelora Sawita Makmur, is owned by Alwin Arifin and started in 1987 as a textile factory (PDBI 1997 Vol. I: A-195, A-196). The decreasing extra-budgetary, and basically illegal income of militarybacked, or military-owned companies in Aceh is probably the driving force behind the increasing paramilitary disturbances in Eastern Aceh, where most of huge industrial centres area located, especially ExxonMobiles natural gas fields and natural gas liquefying plant. Two young men were attacked by a truck full of men at noon on Monday, 9 April 2007 at the Cunda market in Lhokseumawe (Waspada, 10 April 2007; Serambi Pase, 10 April 2007). On Wednesday, 31 January 2007, five members of Forum Komunikasi Anak Bangsa (FORKAB), a local organization set up by former GAM members in the Bireuen district were shot at in their car while they were driving along the road at 22:30 local time. The shots did not kill them, but their attackers still chased them when they fled into the nearby hills and village, interrogated them and took their money, before the wounded young men could be taken to the local hospital. Before this incident, the people of Bireuen were shocked by an armed robbery at a local gas station, where the robbers who used army or police style boots took Rp 160 million (Modus, 5-11 Febr. 2007: 26).inthenationalcemeteryforheroesinJakarta.Heleftafortuneforhiswifeandchildrentofurther expand their family companies. Ibnu Sutowos eldest daughter, Endang Utari Sutowo Mokodompit,isamajorityshareholderofGuthrieGTSLtd(Prospektif,915January2006:933). 14 ). PT Aceh Mdf Wood Product and PT Takengon Pulp & Paper Utama are joint ventures between Ibrahim Risyad, formerly the top Acehnese businessman due to his closeness to Soehartos main money maker, Liem Sioe Liong, and the son of former Minister of Industry, Hartarto.Thesefactoriesproducemediumdensityfibre(140,000m3)andpulp(300,000tonnes), supplied by raw material from PT Indonusa Indrapuri timber estate (PDBI 1994: B110, B294; PDBI 1997, Vol. III: A1508, A1514). The partnership of Ibrahim Risyads son with the sons of Hartarto has been solidified in the Risyadson Group, which also control three oil palm plantations in South Aceh, Aceh Tamiang, and on the island of Simeuleu, and has a mining company,PTAcehResources&MineralsCorp.(seeAppendixII).

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As was the usual habit of the media during the military occupation of Aceh, the Medan-based daily Waspada identified the attackers at the Cunda market in Lhokseumawe as OTK (orang tak dikenal, or unknown persons), a label reserved for persons who could neither be identified as members of the Indonesian armed forces nor members of the Aceh Freedom Movement, or GAM. Aceh pro-democracy activists interpreted these cases as attempts by factions in the armed forces military as well as police factions -- , to revive their bargaining power in demanding high protection fees from ExxonMobile and other large corporations on Acehs East Coast, such as what happened before the tsunami and Helsinki agreement. During those turbulent time, the US oil giant spent billions of rupiahs to support between 1,340 and 3,000 military and police at 30 spots around their mine and LNG plant. To maintain these security problems, the military also supported paramilitary groups who constantly attacked GAM members or villagers accused of being GAM sympathizers (see Aditjondro 2004: 11-14). The military links with those militia groups remains a major concern for observers of Acehs peace process. As Felix Heiduk, a German observer puts it: The extent to which the TNI will support these groups remains unclear, but looking back at Acehs history and the TNIs links to local militia groups, the TNI needs (at least theoretically) to be counted among the potential spoilers of the peace process (2006: 19).

Business groups of former GAM combatants:SINCE the signing of the peace memorandum between representatives of the Indonesian state and the Aceh independence movement, former GAM combatants have been able to consolidate and surface, shifting from guerilla warfare to economic development, with a strong emphasis on strengthening the economic ties between Aceh and Malaysia. The most prominent of these companies, or company groups, is the Pulo Gadeng Group, led by Tengku Muzakkir Manaf, former commander of TNA (Tentara Neugara Aceh, or Aceh National Army, GAMs military wing). Muzakir Manaf currently leads the KPA (Komite Peralihan Aceh, or Aceh Transitional Committee) (Djalal & Djalal 2006: 132; Intelijen, 30 June-13 July 2006: 7), a body created to facilitate the transition of former GAM combatants into civilian life in Aceh. Pulo Gadeng is not an entirely new group. During the armed conflict between GAM and the Indonesian armed forces, TNI, it was run by family members of Muzakir Manaf, imported used cars from Singapore and exported beetle nuts (pinang) to Malaka, Malaysia. After the Helsinki agreement, Muzakir Manaf publicly took over the leadership of the group, in the position of Direktur Utama, or CEO. Under him are other directors, namely H. Tarmizi Yusdja and Zulkifli bin Ubit, who is also a commissioner of the Group. It began by publicly using the Sabang free port on the island of Weh, north of the Aceh mainland, as a major entry point for its trade with Malaysia. It uses KM Pulau Weh, which is owned by the Sabang municipality, to export coconuts, beetle nuts and cocoa beans from Sabang and mainland Aceh to Malaysia, and imported used and brand new 17

luxurious cars from Malaysia to Aceh. In its maiden voyage from Malaysia to Aceh, the Malaysian ship, Jatra III, shipped luxurious cars, from Toyota Cygnus to BMW seri 5 with Malaysian plate numbers to be used by GAM officials in Aceh (Intelijen, 30 June13 July 2006: 7). Then, responding to the public statement of Governor Irwandi Yusuf, a former GAM leader himself, opening up the province to foreign investors, Muzakir Manaf announced some new ventures that his Pulo Gadeng Group plans to open, during a press conference in Lhokseumawe on Sunday, 8 April 2007. Among the new ventures announced are a light steel factory in Krueng Raya in the district of Aceh Besar. This factory is planned to fulfill the needs for steel structures for 30,000 houses for tsunami victims in Pidie, Aceh Besar, and in the town of Banda Aceh and its surroundings. Other ventures planned to be built in the same industrial complex in Krueng Raya are an animal feed mill and a plastics factory (Serambi Indonesia, 8 Febr., 9-10 April 2007). Pulo Gadeng seems to expand further and further every day. Another steel mill which the Group has built in the Arongan Lambalek subdistrict, West Aceh. Its products, using the trade mark Ubong Beusoe, have already been used by BRR NAD-Nias since mid March 2007. Then, in the mountain resort of Takengon in Central Aceh, Pulo Gadeng will develop horticulture production, to export potatoes and vegetables to Malaysia, under an MoU recently signed with Malaysian business peoples (idem). To further promote Acehs export and import trade, Pulo Gadeng is also planning to upgrade the facilities of the Malahayati port, at the Krueng Raya industrial complex in Aceh Besar, near Banda Aceh, by installing 150 ton cranes at the port, which is hopefully completed at the end of April 2007. Thereby, construction materials could also be uploaded and downloaded from ships at that port (idem). And in the Aceh Jaya district, according to sources in Meulaboh, the group is also expanding its business tentacles. Under Pulo Gadengs umbrella are PT Bank Perkeditan Rakyat Syariah (BPRS) Samudera Niaga; PT Matangkuli Perdana; PT Krueng Kureutou; PT Pandu Buana Nusantara; CV Aneuk Piranha, and CV Mawar Sejati (Serambi Indonesia, 8 Febr. 2007, advertisement). Other companies involving former GAM officials are Aceh World Trade Centre (AWTC) Dagang Holding, PT Aneuk Nanggroe Expedition Bireuen, PT Megah Mulia, and PT Halimun Meugah Raya. AWTC is directed by Nurdin Abdul Rahman, formed head of GAM for Malaysia and Australia. He signed an MoU with Mohd. Khairuddin bin Othman, General Manager of PPLM (Perusahaan Pengangkutan Laut Malaysia) in Kuala Lumpur on 15 January 2006, to promote shipping of passengers and goods from Nottingham port on Penang Island in Malaysia. Under that agreement, Jatra III is sailing weekly from Penang to Krueng Geukeuh in Lhokseumawe on Saturdays. Its maiden voyage took place on Sunday, 29 January 2006, though (Intelijen, 30 June-13 July 2006: 6).

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Then, as its name indicates, PT Aneuk Nanggroe Expedition Bireuen, operates from Bireuen, and is directed by Tengku Yusuf Abdul Wahab. In Pidie, a former GAM stronghold, PT Meugah Mulia is active in civil engineering contracts. PT Halimun Meugah Raya is active in the same district, Pidie, and is owned by former GAM/TNA combatants, and deals in supplying river sand for civil engineering contracts. Former members of GAMs female wing, Inong Bale,which includes female combatants and widows or fallen male combatants, are also involved in PT Halimin Meugah Raya, which is directed by Said Rizal Pahlepi, and is based in Meutiara, Beureuneung (Intelijen, 30 June-13 July 2006: 7). Other former GAM commanders have also set up companies, for themselves as well as to improve the socio-economic condition of their followers. The KPA chief for Pase, Tengku Zulkarnaen, is coordinating the formation of companies to deal with trading and workshops in the Pase and Lhokseumawe area, asking former TNA combatants to contribute Rp 12 million each. Its member companies cover many places in the Pase area, such as the Matangkuli, Gendong, Pantonlabu, Tanah Jambo Aye and Sawang subdistricts. While Teungku Nashiruddin bin Ahmed, a former GAM negotiator at Helsinki, has set up his own building materials company (idem). The flourishing businesses of the former TNA commanders has created dissatisfaction among the lower ranks of the former guerilla army, since many of former TNA/GAM foot soldiers are still among the poorest of the poor in Aceh. Most of them are unemployed, and many of them have also lost their houses due to the 2004 tsunami and earthquake. One of the former regional commanders complained to one of the authors souces in Meulaboh, that the wealth of the former TNA leaders, whose business interests is now expanding, originated from the guerilla budget, which was not returned to the guerilla fighters to obtain their ammunition. This person also criticized the charities, which chose to build houses in North Aceh and Bireuen for former guerilla fighters close to the former TNA/GAM leaders, who now dominate the KPA (Komite Peralihan Aceh) leadership. We in Western Aceh also need houses, said this former regional commander to the authors resource person (see also, Nashikin 2007).

Acehs open-door policy towards Malaysian (oil palm) investors:WHAT we can see from Muzakir Manafs business operations is the strong affinity towards Malaysia. This seems to be a general pattern among former GAM commanders, as well as the current Aceh administration. Just recently, in April 2007, flights have been opened between Aceh and Malaysia, and are flown regularly by Air Asia Kuala Lumpur, MAS, and Fair Fly. In the mean time, flights from Aceh to Pukhet in Southern Thailand are also being prepared (Serambi Indonesia, 12 April 2007).

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By opening flights, investments are expected. That has already been pioneered by the North Aceh district government, which has invited Metro Pajang, a Malaysian company, to develop North Acehs oil palm potentials by building a palm oil factory, utilizing the CPO tank at the Krueng Geukeh port. In addition, according to North Aceh acting district head (bupati), Teuku Pribadi, Metro Panjang also plans to develop the districts fishery potentials (Acehkita, 4-10 Dec. 2006: 14). Aceh leaders orientation towards Malaysia seems to be driven both by a pragmatic concern to tap into Malaysias economic wealth, as well as the more humanitarian concern for the great number of Acehnese living in Malaysia, both registered as well as unregistered. As of August 2005, according to the UN High Commissioner for Refugees (UNHCR), there were 20,707 Acehnese persons of concern registered in Malaysia, mostly young males. But according to the Norwegian Refugee Council, by 2004, some 125,000 Acehnese had become internally displaced persons, mostly fleeing to Malaysia or Thailand (Djalal& Djalal 2006: 127-8). As Hasyim Djalal and Dina Sari Djalal wrote: The fate of these Acehnese exiles is not clear. Many reportedly returned to Aceh, with some even selling their businesses in Malaysia in order to start anew in their homeland. But after months of unemployment and stagnation in Aceh, just as many have allegedly returned to Malaysia. This is an unfortunate development for Aceh, which needs the participation of as many Acehnese as possible for true rehabilitation and rebuilding, both in the physical and mental sense (2006: 128). Governor Irwady Yusufs open door policy towards Malaysia has been welcomed by Malaysian palm oil companies, which have formed the Aceh Plantation Development Authority (APDA) in collaboration with Acehnese business people. APDA plans to open 145,000 hectares of oil palm plantations in the province, supported by the Malaysian Islamic Economic Development Foundation (Yayasan Pembangunan Ekonomi Malaysia). Those plantations are planned to supply oil palm kernels to thirteen CPO factories, with a total investment of US$ 488 million (acehkita.com, 13 Febr. 2007). A visit to Aceh on 31 March 2007 by Malaysias Finance Minister, Hilmi Bin Haji Yahaya, who was taken by Vice Governor Muhammad Nazar in a Pelita Air helicopter ride over several districts, further consolidated Malaysias intention to invest in palm oil estates and brackish water fish ponds (tambak udang). The Malaysian Minister brought several experts with him, to see for themselves the potential sites for those estates and fish ponds (Serambi Indonesia, 1 April 2007). These plans need to be taken with a lots of grains of salt. Why? Because it is actually Malaysia, which is benefiting from expanding its oil palm plantations into Aceh, not the other way around, due to the lack of space for expanding plantations in Malaysia. At the moment, six Malaysian companies Kumpulan Guthrie Bhd, PPB Oil Palms, Kulim Bhd (Johor Group), KL Kepong, Golden Hope Plantations, Rimbun Sawit Bhd,

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Oriental Holdings Bhd, and Sime Darby Bhd15 control 541,400 hectares of oil palm plantations in Indonesia, and mainly on the island of Sumatra. That is about 10 % of the total areal of oil palm plantations in Indonesia (van Gelder et al, 2005: 44; Investor, 7-20 Nov. 2006: 16, 28-9; Trust, 11-17 Dec. 2006: 23). At the moment, about thirty companies have opened nearly 130,000-hectares of oil palm plantation, will certainly threaten the fragile ecological balance of Acehs forest cover (see Attachment I). These plantations include the nearly 7,000-hectares PT Woyla Raya Abadi, owned by former Aceh Governor, Abdullah Puteh; the 7,000-hectares PT Delima Makmur and the more than 3,000-hectares PT Sisirau, owned by Acehnese businessman and former Soeharto loyalist, Ibrahim Risyad; and the more than 8,000hectares PT Gelora Sawita Makmur owned by the family of Ret. General Bustanil Arifin. This Soeharto loyalist was the most trusted proxy of the former dictator, who managed Soehartos most lucrative foundations, Yayasan Supersemar, Yayasan Dharmais, Yayasan Dakab, and Yayasan Amalbhakti Muslim Pancasila, which accumulative wealth exceeding that of the Rockefeller and Ford Foundations, according to Bustanil Arifin himself (see Aditjondro 1998: 65-6; Aditjondro 2002: 34; van Gelder 2007; CIC 1997). Therefore, it is quite ironic that while declaring a moratorium on all forms of logging, Irwandy Yusuf has not seriously considered the implications of further opening up Acehs forest to Malaysian oil palm plantations. According to Acehs development plans, oil palm plantations will be opened in eleven districts, namely North Aceh, Aceh Jaya, West Aceh, Nagan Raya, South West Aceh, South Aceh, Aceh Singkil, Aceh Tamiang, East Aceh, Langsa, Pidie, and Simeuleu. Therefore, Cut Hindon, the director of Acehs branch of WALHI, the national environmental forum, has appealed for a redesign of Acehs development plans (Hindon 2007). Probably, the new Governor, a former freedom fighter, wants to return the favour to Malaysia, for accommodating thousands of Acehnese refugees in the past, who have in turn supported Acehs freedom fighters who carried out the guerilla war in the territory. Or, Irwandy probably wants his former comrades in the Free Aceh movement to become business players on the international scene, outbeating Aceh business people who collaborated with the Soeharto family in destroying the Aceh forest cover with their oil palm plantations, timber concessions, and paper and pulp factories, such as the families of the late Ibrahim Hasan, Ibrahim Risyad, and Bustanil Arifin.

Encroaching onto the Gayo Highlands:

)SimeDarbyBhd,hassupportedtheMalaysianGovernmentsoffertomergewithKumpulan GuthrieBhdandGoldenHopePlantationsBhd,toformanentitythatwouldcontrolsixpercent of global palmoil production as the worlds top makers of the commodity, Indonesia and Malaysian,competeforthatposition(TheJakartaPost,22December2006).15

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GEOGRAPHICALLY and culturally, the people of Aceh can be differentiated between the highlanders and the lowlanders. The highlanders are more popularly known as the Gayo people, and their homeland around the Air Tawar Lake is known as Tanah Gayo. The Gayo people are culturally closely linked with the Batak people of the North Sumatera highlands, especially with the Batak Karo people. While the lowlanders, or coastal people (orang pesisir) are more closely linked to the Malay people of North Sumatera. At the moment, there are three districts whose population are predominantly Gayo people, namely Central Aceh with its capital at Takengon, on the shores of the Air Tawar Lake, Bener Meriah with its capital in Janarata, and Gayo Lues with its capital in Blangkeujeren. One of their most famous commodities is coffee, Gayo coffee, which has put Gayo and Aceh on the world map, long before the oil and gas boom (or, long before the Free Aceh Movements unilateral declaration of independence in December 1976). All the three districts produce Gayo coffee, but the largest coffee farms in Aceh, or, for that matter, in Indonesia, are in Central Aceh, with 46,286 hectares of coffee, and 4,000 hectares more planned by the Central Aceh Plantation Service, of which 2,000 hectares will be owned by smallholders, and 2,000 hectares owned by the government (Teganing monthly, No. 44, January 2006, p. 8). As mentioned earlier, Gayo coffee, or sometimes called, Aceh coffee, has been known worldwide. The 2004 tsunami, which has also triggered a tidal wave of expatriates to the country, has increased the interest in Gayo coffee, from the financial point of view. Before the tsunami, Robert McNiece, a New Zealand coffee researcher from Lincoln University in New Zealand, had began to undertake a study to develop the Gayo coffee by setting up a coffee growing research institute in Central Aceh, which also offered Ph.D. scholarships for Gayo students. McNiece himself had developed a strong affinity to Gayo coffee, which, according to him, has been exported by a certain Aceh Company in Jakarta as a mixture of 80% Gayo coffee and 20% coffee from the Toraja highlands in South Sulawesi. He suggested that parts of the revenue of Gayo coffee export should be submitted to UNICEF, to improve the education of the Acehnese coffee growers (Teganing, No. 41, September 2005, p. 16). The influx of expatriates to Aceh has triggered more capitalistic interests in Gayo coffee. In the district of Bener Meriah, a company has been set up, called PT Gajah Mountain Coffee (GMC), directed by a certain Mrs. Denys. The company may be a joint venture between Indonesian and foreign interests, since the commissioner of this company is a certain Ms. Yanti. This company has recently invited Lindsey Bolger, the director of a US company, Green Mountain Coffee, to test the coffee produced by GMC. GMC, in turn, seems to process and market the coffee grown by local farmers, organized by a village cooperative, PUSKUD Pante Raya Wih (Harian Global, 10 April 2007). It is still unclear, however, how this three-tier joint venture will work, and for whose benefit.

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Coffee, however, is only one of the commodities attracting foreign interests to the Gayo highlands, namely gold, as has been discussed earlier, and the hydropower potential of the Peusangan River, which flows out from Lake Air Tawar. The local farmers have been growing carps in fish cages, or karamba, for years, in the lakes outlet into the river. Recently, however, PLN, the National Electricity Corporation which plans to build the Peusangan River hydropower plants, have ordered the farmers to remove their karamba, since they want to normalize the hydropower plants water intake by straighten and deepen the lakes outlet. The farmers concern have been taken up by Jufriadi and his colleagues from Puspa, local environmentalist group affiliated with the Aceh chapter of WALHI. So did Jufriadi told the author during the authors visit with Meulaboh-based NGO workers last May. It is still unclear, however, which company will be ordered to build the two step Peusangan hydropower plant. A tug-of-war seems still to be dragging on between PLN and the Vice Presidents family Bukaka Group, which operates in Aceh and North Sumatera through its subsidiary, PT Mega Power Mandiri.

Systemic corruption:NOW, let us return to the way some groups have accumulated capital in a corrupt way. Of those forms of corrupt capital accumulation, the most harmful form of corruption is the systemic corruption of the Aceh and Nias reconstruction coordination body, BRR NAD-Nias. As has been discussed before, this superbody has practically no power to prohibit the use of harmful substances, such as asbestos, in thousands of resettlement houses in Aceh. In fact, after issuing Memorandum No. M010/BRR.08/I/2007, prohibiting the use of asbestos, Andy Siswanto, a well-known architect, town planner and lecturer at the Soegyapranata Catholic University in Semarang, was fired from BRR NAD-Nias. This indicates that as the coordinating body, which also functions as the regulator for all rehabilitation and reconstruction work in Aceh and Nias, BRR NAD-Nias is protecting the business interests affiliated to the Coordinating Minister for Social Welfare, Aburizal Bakrie, and business interests close to President SBY himself. This weakness of BRR NAD-Nias is caused by the lack of impartiality of its head, Kuntoro Mangkusubroto, and several members of its steering committee and supervisory body. Kuntoro Mangkusubroto is a commissioner of PT Holcim Indonesia Tbk, while Aburizal Bakrie and Surya Paloh, who both sit on the bodys steering committee, and TB Silalahi, who sits on the bodys supervisory body, are linked to the Bakrie Group, the Media Group, and the Artha Graha Group. This superbody employs 1,091 persons paid extremely high salaries, compared to Indonesian civil servants and close to what top executives of private corporations receive. This fact has been criticized by the national parliaments special committee on Aceh, which contrasted the high salaries with the poor quality of its achievements (Serambi Indonesia, 10 April 2007). The poor quality of the houses built for tsunami

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victims under BRR NAD-Nias has led to mass demonstrations of tsunami victims who were still living in temporary barracks, who formed an inter-barrack communication forum, or FORAK (Forum Komunikasi Antar Barak)(Serambi Indonesia, 10 April 2007). Aceh anti-corruption activists have gone further, by criticizing the corruption involving BRR NAD-Nias staff. One spectacular example is the corruption of BRR NAD-Nias publication activities and logistical procurement have been manipulated by its own staff, in cooperation with fictive publishing companies, and, in cooperation with the owner of the building of an anti-corruption organization in Jakarta, MTI (Masyarakat Transparansi Indonesia), whose former executive secretary, Sudirman Said, was an executive at BRR NAD-Nias (Acehkita, 14-20 August 2006, p. 2; B-watch, October 2006: 32-37; Serambi Indonesia, 13 April 2007). Other forms of corruption of the reconstruction funds have also been investigated and exposed by the Aceh Anti-Corruption Movement, or GeRAK (Gerakan Anti Korupsi) Aceh, ranging from the corruption of funds to build the tsunami victims houses, to the procurement of luxurious vehicles for BRR NAD-Nias personnel. Hence, four anti-corruption organizations in Aceh have persuaded President SBY to replace Kuntoro Mangkusubroto from his position as BRR NAD-Nias chief (Kompas, 10 January 2007). The corruption of BRR NAD-Nias-financed housing projects is further aggravated by corruption within similar projects financed by international NGOs. Oxfam UK, for instance, had to shut their operations in Aceh Besar for a month, when they started to see inflated bills for construction supplies. An internal investigation led to misconduct charges against ten staffpersons over the loss of US$ 22,000. A bigger loss was experienced by the Dutch chapter of Terre des Hommes, which was forced to halt construction of 200 houses for four months for four months last year, and call the police after a partner of them allegedly misused US$ 150,000. The aid agency had built 2,000 other houses in Aceh without problems, and the corruption came as a shock to them (Casey 2006). Corruption by those NGOs, however, still dwarf the corruption associated with BRR, as has been the findings of investigations carried out by the Indonesia Corruption Watch (ICW). In a press conference on Thursday, 3 May 2007, ICW Deputy Coordinator, Ridaya Laodengkower announced ICWs findings, that from the more than Rp 847 billion rehabilitation and reconstruction fund coordinated by BRR NAD-Nias, about Rp 436 billion was spent in various corrupt ways. Such as, marked up prices and the use of multiple contracts which also blew up the prices. Giving some examples. Ridaya mentioned the building of 760 houses in Banda Aceh, 574 houses in West Aceh, and 430 houses in Nagan Raya and South Aceh (MedanBisnis, 4 May 2007; Waspada, 5 May 2007).

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How much reconstruction aid is enjoyed by the gampong people in Aceh?APART from being corrupted by BRR NAD-Niass network of staff and contractors, the Acehnese people have not benefited as much as indicated by the budget figures, since at least sixty percent of rehabilitation and reconstruction funds allocated for Aceh has left the province each year. According to Nova Iriansyah from the Aceh Construction Services Development Institute, or LPJK (Lembaga Pengembangan Jasa Konstruksi) Aceh, about thirty trillion rupiah is cumulatively allocated from the national budget, the provincial budget, and from BRR NAD-Nias. Of that amount, about twelve trillion is allocated for actual reconstruction work. From that amount, only 4.8 trillion rupiah, or fourty percent, is absorbed by the Aceh local economy, while 7.2 trillion rupiah, or sixty percent, leaves the province again. As studied by LPJK Aceh, this reverse flow of reconstruction aid to Aceh is caused by four factors. Firstly, it are mostly outside contractors that won the project tenders; secondly, the construction work is often further subcontracted to firms from outside Aceh; thirdly, most of the project workers come from outside Aceh; and fourthly, most building material comes from outside Aceh (Serambi Indonesia, 13 April 2007). With only fourty percent of the reconstruction budget spent in Aceh, one cannot expect much of trickling down effect to the local people of Aceh. This raises the question: how much of the reconstruction aid for Aceh is trickling down to the ordinary Acehnese people in the gampongs, the Acehnese villages? Or, to raise a more general question, with all the trillions of rupiahs flowing into Aceh, how much will it help to raise the standard of living of the rural Acehnese, who constitute the bulk of the population? Oil palm estates, which seem to be the prima donna of forthcoming Malaysian investments in Aceh, may not create many jobs in the war-torn province, since the plantations will most likely bring their own workers from other places, just the plantations in East Sumatra did in the past, by bringing in their contract workers, then called coolies, from Java (see Lulofs 1982; Aulia 2006). Or, like plantations in other parts of Sumatra have done more recently by bringing in workers from the island of Nias, in North Sumatra. In addition, as has happened in other places in Indonesia, oil palm estates have a socio-economic and ecological displacement effect, since they replace coconuts and other crops with which the local villagers are more familiar (see Van Gelder, Wakker, Schuring and Haase 2005). In the aftermath of the December 2004 tsunami, many survivors have not only lost their houses, but also their land. Or, lost their land titles. Hence, in addition to continuing the third phase of the Kecamatan Development Project, the World Bank has, on 24 June 2005, allocated funds for recertifying the tsunami victims land, as well as certifying the land for those who do not own land titles yet. This World Bank project is managed through the Multi-Donor Fund for Aceh (MDFA), which has allocated US$

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28.5 million for the Reconstruction of Aceh Land Administration (RALAS) project (Steer & Breteche 2006; Daniel 2005; Pratomo 2005). As Steer and Breteche put it, the funds are supposed to help the National Land Agency, BPN [Badan Pertanahan Nasional] to recreate land records destroyed by the tsunami, salvage those which can be, and build capacity for the creation of a new, modern land records system. Under the project some 600,000 land parcels are to be titled, many for the first time ever, since less than twenty percent of land owners in Aceh had legal title prior to the tsunami. This will enable citizens to use their land as collateral for financing homes and businesses, and thereby unlock substantial dormant capital for thousands of poor families struggling to rebuild their shattered lives, as Steer and Breteche put it. How far has that projects targets been achieved? Not very far. Nearly one semester after the land certification project was approved, only 7,700 titles had been distributed to tsunami survivors. Some 20,000 land titles were still lying ready for distribution, all the paper work completed, yet they remain stuck in the system due to simple administrative bottlenecks that could be resolved with decisive action (Steer and Breteche 2006). Actually, the fault does not lie entirely with the bureaucrats of the district land office (Kantor Pertanahan), as field research in West Aceh, Aceh Jaya and Nagan Raya, last May, complemented with interviews with RALAS officials in Banda Aceh have shown. It also lies with the enormous task of identifying the prospective land title owners, surveying their parameters, bringing the result to the district land office head, signing the newly issued land certificates, and returning it to the rightful land owners. The land certification program have been carried out so far in two stages, namely RALAS 2005 (July 2005-June 2006) when ten Adjudication Teams were deployed in two towns and districts, followed up by RALAS 2006 (July 2006-June 2007) with more Adjudication Teams deployed to nine towns and districts. During RALAS 2005 about 14,000 land certificates have been printed, while about 9,000 have been handed over to the rightful land owners. While during RALAS 2006 until November 2006, the boundaries and other physical data for 80,000 land parcels have been identified, but only 1,000 land certificates have been handed over the rightful owners. As official reports at the West Aceh Land Office have shown, the return rate of land parcels that had already been surveyed by nine adjudication teams from BPN has been very low, as the following examples may show. In Arongan Lambalek subdistrict, West Aceh, where 3,931 potential land certificates have been identified by BPN Team XVIII, only 1,842 certificates have been produced and safely handed over to the rightful land owners. While in Drien Rampak subdistrict, in the same district, from the 1,180 potential land certificates identified by BPN Team VIII, only 101 certificates had been produced and delivered to the rightful land owners. So, from the total 20,748 potential land certificate holders identified by nine BPN Teams from around Indonesia, by that

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date, only less than a third number of certificates had been produced and delivered to the rightful land owners, by 26 April 2007. This is what the head of the West Aceh Land Office, Budi Yazir, who also overseas Aceh Jaya, reported to the higher levels of government. During the authors interview with Budi Yazir in his office in Meulaboh, on 2 May 2007, the land officer explained the obstacles to the land certification process. First of all, since RALAS is a national project, BPN has recruited thirty adjudication teams from different local BPN offices in Indonesia to carry out the assessment of potential receivers of the newly printed land certificates, as well as to distribute them to the rightful owners. Consisting mainly of non-Acehnese BPN staff, local BPN staff who spoke the local languages were inserted in each team, such as in the ten teams sent to West Aceh and the two new districts split off from West Aceh, namely Aceh Jaya and Nagan Raya. This identification process began in mid April 2007, with each team assigned to complete distributing 5,000 new land certificates to the proper land and other property owners. This identification process, which has also involved two companies, PT PT Tesaputra Adiguna and PT Surveyor Indonesia which assisted the adjudication teams with land mapping services, has taken a much longer time than was anticipated, since it had to faces many hurdles. The huge demographic effect of the 2004 tsunami and earth quake, which have caused the death of thousands of land and other property owners, as well as the displacement of thousands other people to the refugee barracks and other places, separated many land parcels from the rightful owners. Therefore, the task of identifying the rightful owner, or inheritor of each parcel of land was a hair-splitting job for each team, who were not accustomed to the terrain and the inhabitants of the subdistricts assigned to them. Apart from the difficulties of finding the rightful owner of each land parcel, the certification project has also been accused of overlooking people who were real victims of the tsunami, and those who were only victims of the earthquake. In other words, the different categories of disaster victims had created among the people that some received favorable treatment, and others were overlooked. While in Banda Aceh, collusion between local BPN officials and other government officials and certain BRR NAD-Nias have enabled some people to pool a great number of land certificates among themselves. This form of corruption of RALAS funds has been identified by Banda Aceh-based prodemocracy activists assisting the author of this report. At any rate, one large refugee barrack at Cot Beuloh in Arongan Lambalek, the sub-district with the highest number of certificate receivers, was certainly not one of the lucky ones. Fitriani, a former member of GAMs guerilla army, TNA, still lives in the refugee barrack with her second husband. After the Helsinki peace agreement, she and her former husband, Alex, a regional GAM commander, surrendered their weapons, and, unfortunately, they separated after Alex fell in love with another woman. Fitriani then married the brother of a former guerilla fighter in her platoon, who was killed by Indonesian soldiers after he surrendered, before the Helsinki peace agreement. Her husband comes from a coastal village which had been badly hit by the tsunami. Yet, he

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has not received a certificate for his land, from where he regularly harvest his coconut to feed his family, which has not received rice ransom anymore. The couple have been promised a new resettlement house, with a much smaller plot of land. Unfortunately, while the new house was promised to be finished in March 2007, two months later it was not yet finished. So, they still have to live in the crowded refugee barrack, which land was flooded during the rain, when the author of this report visited it in early May 2007. Another unfortunate Acehnese is Zainal Abidin and his mother, Nurliyah, who had fled from Beutong Ateuh to Meulaboh after the military attacked the dayah which his father had founded (see Attachment 1), but then had the 2004 tsunami damaged their Meulaboh dwelling. Although they have moved back to their home village, they still asked the government to provide certificates for their dwellings in the town of Meulaboh, which is currently inhabited by their relatives. This slow certification-and-recertification project, may become a blessing in disguise in the long run, for two reasons. Firstly, official certification of land uproots the gampong people from their traditional agrarian system, where land is individually owned, but since the cohesion of the village communities was still strong, there was a degree of social control, where villagers were not simply free to sell their land and migrate to the towns. Secondly, with official certification of their land, where citizens could then use their land as collateral to borrow money from the banks to finance new businesses, citizens could also easily lose their land and their land titles whenever they could not repay their loans to the banks. With the rapid opening of Aceh to various land-extensive businesses, ranging from oil palm estates, fish ponds, mining, to real estate, the pressure built upon villagers to sell their land is becoming heavier and heavier every day. On the other hand, watching the success of outsiders to open their businesses would also lure many ordinary citizens, without the adequate business skills and knowledge, to borrow capital from the banks, which works as an incentive to obtain land titles. However, the chances of losing out from the more aggressive and experienced outsiders would easily squeeze the local citizens out of business and in the process lose their land, whenever they could not repay their loans, as mentioned before. Hence, prodemocracy movement activists in Aceh fear that the banks that provide the loans to the small land owners could also provide certified land parcels to other customers, including those who want to set up their businesses in Aceh. So, before all this could happen, a broader training program to develop local villagers business skills should precede the land certification project, preceded by a thorough research into the Acehnese peoples customary agrarian system. Without these two preceding activities, the land certification project would not become a blessing, but rather, a curse for the ordinary gampong people. While on land many gampong people have lost their land or land titles, and many more may lose whatever land they still have to the large mining and oil palm

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plantations, the situation on the east coast of Aceh is not much rosier. Hundreds of fisherfolks along the coast of Bireuen, Pidie, North Aceh, and East Aceh have lost their fishing nets and rumpon, traditional fish attracting device, which have been destroyed by seismic tests carried out by PT PGS Nusantara, which is exploring the offshore oil and gas deposits along Acehs east coast, using a seismic exploration boat. Those seismic activities were carried out without prior and proper consultation with the district government and the Panglima Laot, the semi-traditional organizations of artisanal Acehnese fisherfolks, in each district. As a result, the fisherfolks claimed losses in their catch of up to Rp 20 billion, including Rp 13.3 billion in Bireuen and Rp 7 billion in East Aceh. Ironically, most of the more than 200 rumpon and nets destroyed by the seismic exploration activities were donated by the Indonesian and Italian governments (acehkita.com, 21 Febr. 2007). Following up on their earlier complaints, dozens of Panglima Laot from Bireuen traveled to Medan, the capital of the neighbouring province of North Sumatra, to demand compensation for their losses, from PT PGS Nusantaras officials. The encounter turned very tense, when the company officials only accepted to pay five percent of what the Bireuen fisherfolks demanded (Serambi Indonesia, 13 April 2007). What has been kept out from the local medias eyes, is the large economic interests behind those seismic exploration activities. It is most likely, that Arifin Panigoros Medco Group are the one financing PT PGS Nusantaras exploration activities, since those offshore oil and gas potentials are part of the Langsa Block, which has been allocated by the Indonesian Government to Medcos joint venture with Mitsui Oil Exploration Company from Japan, as has been discussed earlier in this paper. Therefore, as in the case of the Lapindo mud disaster in East Java, the fisherfolks of Acehs eastern coast should also raise their compensation demand to Medco and Mitsui, and not only to PT PGS Nusantara, which may claim that they are only carrying out the orders of the two oil giants. What we have seen so far is only the ecological impact of seismic testing for oil and gas deposits offshore Acehs east coast. But more is in store in the very near future. With Medcos plans to explore and drill the A Block near Lhokseumawe, and considering the fact that other companies may soon follow suit, such as PT Pacific Oil & Gas, which has obtained permits to explore the oil and gas deposits around Peureulak (Koran Tempo, 26 April 2007: B2), farmers and fisherfolks need to be alerted and organized to defend their social and ecological rights as well.

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Conclusion:THE rehabilitation and reconstruction of Aceh and Nias which involves trillions of rupiahs have benefited two major groups, while marginalizing many tsunami and earthquake victims, local farmers, fisherfolks, and other rural Acehnese. Firstly, the rehabilitation and reconstruction funds have benefited many old business groups close to Indonesias ruling elite, such as the Media Group of Surya Paloh. Secondly, these funds have benefited new business groups which have been set up by former commanders of TNA, the guerilla army of the Free Aceh Movement (GAM), most prominently among them the Pulo Gadeng Group of former TNA commander, Muzakkir Manaf. Meanwhile, many TNA foot soldiers are still living in poverty, jobless and without receiving houses and other forms of assistance from the Aceh and Nias Reconstruction Coordinating Body, BRR NAD-Nias. There are two reasons why the trillions of rupiahs or billions of US dollars have not improved the socio-economic well-being of many local Acehnese. These reasons are firstly, the fact that the lion share of the development funds are daily flowing out of Aceh, and secondly, the high degree of corruption among BRR NAD-Nias as well as among the large foreign NGOs operating in Aceh. The rehabilitation and reconstruction industry in Aceh has also become a convenient outlet for the building materials producers in other parts of Indonesia. Including building materials which have had their market squeezed by prohibitions to their use overseas, such as what has happened to the asbestos industry. Thousands of houses built by two charities have used this carcinogenic substance. The first charity, namely Yayasan Bakrie, is affiliated with Indonesias Coordinating Minister for Social Welfare, Aburizal Bakrie, and the second charity, Yayasan Buddha Tzu Chi, is affiliated to two top Sino-Indonesian business people, such as Sugianto Kusuma and Eka Tjipta Wijaya. Within such a context, it is quite understandable that the billions of dollars handled by the club of international development finance institutions, namely the Multi Donor (Trust) Fund, with the World Bank as its main promoter, have not uplifted many Acehnese from their misery. The World Banks special project to provide land certificates for tens of thousands of Acehnese in particular, has not reach their targets due to many demographic and administrative hurdles. This is a blessing in disguise, since this land certification program may become a double edge sword. On one hand, it provide land and other property owners with legal confirmation of their properties. On the other hand, the land certificates could be used as collaterals to obtain bank loans, which, in case the lenders could not repay their loans, the certificates could be confiscated by the banks, which could use the confiscated land in turn to provide land for investors in Aceh. Jakarta, 20 June 2007.

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