PROFITING FROM PEACE:

The Political economy of Aceh’s

Post-Helsinki reconstruction

George Junus Aditjondro

Working Paper #3, 2007

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 PROFITING FROM PEACE:
The Political economy of Aceh’s post-Helsinki reconstruction1
=========================================================
By George Junus Aditjondro2

POST-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 Kalla’s 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.

1
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  post‐conflict  and  post‐disaster  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 
Research Methodology at Sanata Dharma University’s Postgraduate Programme. His recent work 
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 
since 1998, and three field trips to Banda Aceh, Meulaboh, and Takengon in early 2007.  
3 ). Last year (2006), Exxon Mobil became the biggest company on Fortune’s list of 500 largest US 

companies. This offspring of John D. Rockefeller’s Standard Oil, the trust that was broken up by 
the US government under the Anti Trust Law nearly a century ago, produced 1.5 billion barrels 
of oil and gas in 2005. Its market capitalization reached US$ 375 billion, with an annual profit of 
US$  36.1  billion  in  2005.  It  paid  US$  8  billion  in  dividends  to  its  2.5  million  shareholders, 
employed 83,700 workers in six continents, and spent roughly US$ 15 billion on exploration and 
production. The company’s US$ 36.1 billion in profits at a time when US citizens had to pay US$ 
2.50 a gallon for gasoline made Exxon Mobil a target of criticism by US citizens and Senators. It is 
also  drawing  increased  criticism  by  environmentalists  for  its  support  for  drilling  in  the  Arctic 
National Wildlife Refuge (Fortune, 12 April 2006: 51‐62). 

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 ExxonMobil’s supremacy as the largest company operating in Aceh, however,
is currently strongly challenged by Indonesia’s 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 Medco’s 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, 9-
23 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 Aceh’s 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 Golkar’s 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).

4 ). Medco is a family company of Arifin Panigoro, formerly a crony of Soeharto, whose in‐law, 
Edi Kowara Adiwinata, was given shares in the company, which after Edi Kowara’s death was 
passed  over  to  his  son,  Indra  Rukmana,  the  husband  of  Soeharto’s  eldest  daughter,  Siti 
Hardiyanti  Rukmana,  aka  Tutut.  Apart  from  his  oil  and  hotel  business,  Arifin  and  one  of  his 
siblings, Yunar Panigoro, own a timber company, PT Sega Tunggal Indonusa (PDBI 1994: B‐261). 
5 ) In the gold mine exploration by the Media Group in Nagan Raya, four experts used Freeport 

mining overall customs, as observed by Al Mujahid, Seuramboe Aceh journalist, on 23 March 2007, 
and relayed to the author  in Meulaboh, on Monday, 30 April 2007. Local workers at one of the 
exploration  drilling  site  also  told  the  author  of  this  report,  that  foreigners  from  Freeport  were 

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 Geologists and mining engineers working for Surya Paloh’s 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 Paloh’s
new business enterprises in Aceh comes partly from the Rp 200 billion donations from
viewers of Paloh’s television station, Metro TV, aimed to help the victims of the
December 2004 earthquake in Aceh. These funds are managed by Paloh’s 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 Paloh’s position as chairperson of the Veteran
Children’s 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  Paloh’s  Media  Group  and  Ibrahim  Risyad’s 
Risyadson Group.  
6 ) Surya Paloh is married to Rosita Barack, an elder sister of Rosano Barack, also known as Cano. 

Cano  is  a  close  friend  of  Bambang  Trihatmodjo,  former  President  Soeharto’s  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  children’s  organization.  FKPPI  (Nasution  2005:  42,  44,  47).  Paloh’s  son, 
Prananda,  is  also  very  close  to  Tommy  Soeharto,  since  Tommy’s  luxurious  US$  13.7  million 
yacht,  Obsessions,  was  for  years  registered  in  Cayman  Islands  under  the  Prananda’s  name 
(interviews with a key informant in Australia, 1998  till 2001). 

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 A similar strategy of improving one’s company’s 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 Soeharto’s 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 Soekarnoputri’s party, PDI-P (Swasembada, 6-
19 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 Aceh’s 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 Ical’s 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 family’s
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 Aceh’s 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 SBY’s 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 Graha’s proposal for a blue print for the reconstruction of the fatally
damaged district capital of Aceh Barat, Meulaboh, has been rejected, due to the

7 ) The headquarters of this foundation is in Taiwan. It is its Indonesian branch which is building 
the  asbestos  walled  houses  in  Aceh,  presumably  with  the  financial  support  from  the  business 
conglomerates owned by the executives of its Indonesian branch.

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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, Indonesia’s 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).

8  )  It  is  well‐known  among  Aceh  ulama    and  pro‐democracy  activists  that  Artha  Graha,  whose 
main financial wizard is Sugianto Kusuma, also known as Aguan under his Chinese name, made 
their  fortune  by  organizing  gambling  and  high  class  prostitution  (see  Aditjondro  2006:  419‐20). 
Hence,  the  Acehnese  ulama  rejected  Artha  Graha’s  offer,  but  did  not  resist  the  construction  of 
thousands  of  houses  by  the  Buddha  Tzu  Chi  Foundation  where  Sugianto  Kusuma  is  vice‐
chairman of the Indonesian branch.  

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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 Aceh’s 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

9 ) H. Tito is the chairperson of the West Aceh chapter of the contractors’ association, GAPENSI, 
and  deputy  chairperson  of  the  provincial  GAPENSI  board.  Formerly  a  member  of  Soeharto’s 
political party, Golkar, after Soeharto’s descent from power he moved to Amien Rais’ PAN, and 
became the deputy chairperson of PAN for West Aceh district. (information via sms from Abdul 
Jalil, director of the Grassroots Society Foundation in Meulaboh on  23 May and 6 June 2007).  
10).  Mentioned  on  the  memorial,  signed  by  the  Bupati  of  West  Aceh,  built  to  commemorate  the 

completion of the Calang Meulaboh road, donated by the people of Japan to the people of Aceh 
(Observed by Abdul Djalil and relayed by sms to the author of this report on 26 May 2007).   

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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 Soeharto’s extended family. PT Indocement, which uses the
brand name, Semen Tiga Roda, once belonged to Liem Soei Liong and Soeharto’s
cousin, Sudwikatmono, while PT Semen Cibinong once belonged to Hasyim
Djojohadikusumo, whose elder brother, (Ret) Lieut. Gen. Prabowo Subianto had married
Soeharto’s 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
Mangkusubroto’s 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

10
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 Swiss-
belhotel 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 Nokia’s 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. Telkomsel’s
red-and-white colored towers are currently spread out all over Aceh’s 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 Indonesia’s second largest Islamic organization,
Muhammadiyah (Serambi Indonesia, 11-12 April 2007). This is probably their way to
show to Aceh’s 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  Ahtisaari’s  role  in  brokering  the  Helsinki  peace  agreement 
11

between  GAM  and  the  Government  of  Indonesia,  Finland’s  reputation  as  the  country  where 
Nokia is produced may have raised its popularity in Aceh. Nevertheless, any increase in Nokia’s 
market benefits the former President’s son, Marko Ahtisaari, who happens to be one of Nokia’s 
director.  

11
Canada and Argentina, have increased the value of Indofood’s shares. Ironically, thanks
to the tsunami in Aceh, the values of Indofood’s 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, 10-
16 April 2006: 8).

The Vice President’s 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 President’s 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 Kalla’s 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 VP’s 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

12
East Java (Gatra, 20 Oct. 2004; Kontan, 24 August 2005; Prospektif, 10-16 April 2006:
15, 21).

One of JK’s 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,
JK’s 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 President’s relatives
also have their fingers in Aceh’s reconstruction pie. Anyhow, with the appointment of
Halim Kalla, one of the Vice President’s 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 Aceh’s
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.

13
 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 Aceh’s east coast, and Korem 012/Teuku
Umar, which overseas security in Aceh’s 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. Lantara’s 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 people’s 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 Paloh’s coal and gold mining operations. Paloh is,
in fact, the son of a retired military officer, and was head of the retired military children’s
organization, FKPPI (Forum Komunikasi Putra-Putri Purnawirawan ABRI Indonesia).

14
 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 commander’s 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 Soeharto’s 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

12  )  The  recent  flood  in  Aceh  Tamiang  is  allegedly  caused  by  illegal  logging  carried  out  by 
military personnel, assisted by their operators and cronies, in the Gunung Leuser National Park. 
Logs from this national park has been transported for use in building resettlement houses for the 
refugees, as well as for more commercial use in North Sumatera, as well as in North Aceh, East 
Aceh,  Aceh  Tamiang,  and  South  East  Aceh.  This  was  relayed  to  the  author  by  a  post‐graduate 
student from Aceh, while on the flight back from Medan to Yogyakarta, on 11 June 2007.   
13 ) PT Alas Helau, which is also a shareholder in the paper mill, PT Kertas Kraft Aceh, is partly 

owned  by  the  family  of  Ret.  General  Ibnu  Sutowo  (Prospektif,    9‐15  January  2006:  13).  The  late 
Ibnu  Sutowo  is  the  former  president  director  of  Indonesia’s  state  oil  and  gas  company, 
PERTAMINA, which made the company nearly bankrupt due to the US$ 10 billion credit to gas 
tanker  producers  in  the  US  and  their  Swiss  banker,  Roy  Rappaport.  Nevertheless,  the  retired 
general and Soeharto’s golfing friend was never taken to court, and on his death, he was buried 

15
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 Irwandy’s 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 , Aceh’s 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 military-

backed, 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 ExxonMobile’s 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).

in the national cemetery for heroes in Jakarta. He left a fortune for his wife and children to further 
expand  their  family  companies.  Ibnu  Sutowo’s  eldest  daughter,  Endang  Utari  Sutowo 
Mokodompit, is a majority shareholder of Guthrie GTS Ltd (Prospektif,  9‐15 January 2006: 9‐33).  
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 
Soeharto’s  main  money  maker,  Liem  Sioe  Liong,  and  the  son  of  former  Minister  of  Industry, 
Hartarto. These factories produce medium density fibre (140,000 m3) and pulp (300,000 tonnes), 
supplied  by  raw  material  from  PT  Indonusa  Indrapuri  timber  estate  (PDBI  1994:  B‐110,  B‐294; 
PDBI  1997,  Vol.  III:  A‐1508,  A‐1514).  The  partnership  of  Ibrahim  Risyad’s  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, PT Aceh Resources & Minerals Corp.  (see Appendix II).  

16
 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
Aceh’s 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 Aceh’s 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 Aceh’s history and the TNI’s 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, GAM’s 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 June-
13 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 Aceh’s 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 Gadeng’s 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).

18
 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 GAM’s 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
author’s 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 author’s resource person (see also, Nashikin 2007).

Aceh’s open-door policy towards Malaysian (oil palm) investors:

WHAT we can see from Muzakir Manaf’s 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).

19
 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 Aceh’s 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
district’s 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 Malaysia’s 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 Yusuf’s 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 Malaysia’s 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 Malaysia’s 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,

20
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 Aceh’s 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 8,000-
hectares 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
Soeharto’s 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 Aceh’s forest to Malaysian oil palm plantations. According to Aceh’s 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
Aceh’s branch of WALHI, the national environmental forum, has appealed for a redesign
of Aceh’s 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 Aceh’s 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:

 ) Sime Darby Bhd, has supported the Malaysian Government’s offer to merge with Kumpulan 
15

Guthrie Bhd and Golden Hope Plantations Bhd, to form an entity that would control six percent 
of  global  palm‐oil  production  as  the  world’s  top  makers  of  the  commodity,  Indonesia  and 
Malaysian, compete for that position (The Jakarta Post,  22 December 2006).  

21
 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 Movement’s 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.

22
 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 lake’s 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 plant’s water intake by straighten and
deepen the lake’s 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 author’s 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 President’s 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. M-
010/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 body’s steering
committee, and TB Silalahi, who sits on the body’s 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 parliament’s 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

23
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 ICW’s 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).

24
How much reconstruction aid is enjoyed by the gampong people in
Aceh?
APART from being corrupted by BRR NAD-Nias’s 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$

25
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 project’s 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

26
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 author’s 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 pro-
democracy 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 GAM’s 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

27
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, pro-
democracy 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 people’s 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

28
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 Aceh’s 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 Nusantara’s 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 media’s eyes, is the large economic
interests behind those seismic exploration activities. It is most likely, that Arifin
Panigoro’s Medco Group are the one financing PT PGS Nusantara’s exploration
activities, since those offshore oil and gas potentials are part of the Langsa Block, which
has been allocated by the Indonesian Government to Medco’s 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
Aceh’s 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 Aceh’s east coast. But more is in store in the very near future.
With Medco’s 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.

29
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
Indonesia’s 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 Indonesia’s 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 Bank’s 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.

30
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Curriculum Vitae of the Researcher

Name: George Junus Aditjondro

Place & Date of Birth: Pekalongan, Central Java, Indonesia, 27 May 1946.
Current Mail Address: Gang Bakung No. 18, Deresan CT X, Gejayan Street,
Yogyakarta, Indonesia
E-mail: pesutkahayan@yahoo.com
Hand (cell) phone nos: (+062) (852) 4121 8490;
(+62) (813) 9254 1118.

Citizenship: Indonesian
Gender: Male
Current Location: Yogyakarta, Indonesia
Present Position: Guest Lecturer at Religious and Cultural Studies
of the Post Graduate Programme at the
Sanata Darma University in Yogyakarta,
Indonesia;
Consultant and Trainer in Research Methodology
Workshops for non-government organizations in North
Sumatra and the Department of Religion R & D Institution
in South Sulawesi.

Education background:

20 January 1993: Philosophical Doctor (Ph.D.), Cornell University, Ithaca, N.Y.; thesis
on public policy education concerning the social and environmental impact of the
Kedungombo multipurpose dam in C. Java.

1991: Master of Science, Cornell University, Ithaca, N.Y.; thesis on organizational

learning of executives and staff persons of the Irian Jaya/Papua Community Development
Foundation (Yayasan Pengembangan Masyarakat Desa Irian Jaya; YPMD-Irja).

Languages: Indonesia (first language)

English (fluent)
Dutch (fluent)

Work Experience:

1. Since Semester I 2007, teaches Marxism and Social Movements at courses of the
Pancasila Study Center of the Gadjah Mada University in Yogyakarta, Indonesia.

2. August – December 2006, conducted research on the democratic space in Timor

Leste (East Timor) and Indonesia, for the Southeast Asia Committee for
Advocacy (SEACA) in Manila.

33
 3. Since Semester II 2005, involved in teaching Marxism, New Social Movements,
and Research Methodology in the Postgraduate Program of the Sanata Dharma
University in Yogyakarta, Indonesia.

4. Since November 2002: Research & Publication Consultant of Yayasan Tanah

Merdeka in Palu, Central Sulawesi, Indonesia.

5. 1994-2002: Lecturer at the Murdoch University in Perth, Western Australia

(Australia), and the University of Newcastle, NSW, (Australia).

6. 1989-1993: Lecturer at the Postgraduate Program in Development Studies at the

Satya Wacana Christian University in Salatiga, Central Java, Indonesia,

7. 1981-1989: Community development worker with INDHHRA (Sekretariat Bina

Desa) in Jakarta; The Indonesian Environmental Forum (WALHI) in Jakarta and
Jayapura, and Yayasan Pengembangan Masyarakat Desa Irian Jaya (YPMD-
Papua, Irian Jaya) in Jayapura, West Papua.

8. 1971-1979: Journalist with the TEMPO weekly in Jakarta.

Works published:
Hundreds of books, chapters, introductions, prologues and epilogues on East Timor, West
Papua, Aceh, North Sumatera, Maluku, Sulawesi, Kalimantan; environmental affairs,
especially the environmental impact of mining and huge infrastructure projects; new
social movements; and presidential corruption in Indonesia since Soeharto, published in
Indonesia and overseas.

Most recent book: Korupsi Kepresidenan: Reproduksi Oligarki Berkaki Tiga: Istana,
Tangsi dan Partai Penguasa [Presidential Corruption in Indonesia: Reproduction of the
Three-Legged Oligarchy, the Palace, the Barracks, and the Ruling Party], Yogyakarta:
LKiS, 500 pp, launched on 24 May 2006.

34