Behind the BP Tangguh Project Propaganda
By JATAM, Mining Advocacy Network, October 2003

Bintuni Bay, West Papua, is one of Asia's largest untapped natural gas fields. BP hopes its Tangguh Liquefied Natural Gas (LNG) project in Bintuni Bay will bolster its place in the Asian-Pacific energy market and make it Indonesia's largest single foreign investor. Indonesia like several other parts of the developing world is full of energy resources that have attracted mining, oil and gas multinational corporations. These powerful multinationals have been strongly criticized for ignoring the needs of local communities, triggering unrest and resulting in numerous environmental and social impacts where they operate.

BP Indonesia is operator of Tangguh and holds a 37.16% stake. Other ownership comes from a consortium of companies including the Indonesian state oil company, Pertamina. Other key shareholders are China's CNOOC Ltd with 12.5% and Britain's BG Group Plc with 10.73%. An entity comprising Japan's Mitsubishi Corporation and INPEX Corporation hold 16.3%.

According to BP top executives in September 2003, BP is certain to go ahead with the $3 billion development of the giant Tangguh gas field in Indonesia, and expects to add a Japanese buyer to its list of customers soon. BP Tangguh is focused on the Japanese market after sealing deals with buyers in China and South Korea for just less than four million tons of liquefied natural gas a year, a volume which would make the project commercially viable. In 2002, CNOOC and BP signed a 25-year contract to supply 2.6 million tons of Tangguh LNG annually starting in 2007. BP has also signed preliminary supply deals with South Korean buyers for 1.15 million tons a year. Besides South Korea and Japan, other potential big buyers for the Tangguh LNG are Taiwan, the Philippines, Thailand and India. BP has said Tangguh holds 14.4 trillion cubic feet (TCF) of proved and certified natural gas reserves while probable and possible reserves total 24-25 TCF. A large chunk of the project's financing
is expected to come from the Japan Bank for International Cooperation (JBIC).

The Tangguh gas fields were discovered during the brutal Suharto regime, when foreign investors could expect preferential treatment and decisions about resource use were enforced by the military. Like many other investors, ARCO, the company developing Tangguh before their merger with BP in 1999, was promised access to customary lands of indigenous communities without requiring prior consent from these communities.

Militarization

BP has stated that it wants to create a military-free zone around the Tangguh project and has boasted their two years of consulting thousands of villagers. However, BP is still facing demands from the local communities that have yet to be addressed and dissatisfaction is growing. Also criticism over BP's projects in other countries has undermined the company's attempts to promote itself as one of the more enlightened oil multinationals.

BP's stated major concern at Tangguh is the influx of people from inside and outside Papua at the time of construction that could result in social envy and conflict. There is the strong possibility that migrants from outside Papua will dominate commerce as seen elsewhere in the province. The construction of the plant has been delayed because of trouble finding buyers for the gas. At the moment, the construction is planned to begin by mid-2004. Just over 100 local people are employed in security, transport and cleaning at the base camp. BP may end up raising false hopes. For example, the desire among local people for a massive project with dozens of money-generating spin-offs is uncertain and will come into direct conflict with the need to limit its environmental impact in this extremely important and fragile mangrove ecosystem.

Just an hour by plane across Papua's mountains lies the notorious US-based Freeport-McMoRan Copper and Gold Inc. operations, the world's largest copper and gold mine. The mine has been strongly criticized for its environmental record, for not hiring enough Papuans and for using soldiers to protect the mine that have terrorized and killed thousands of indigenous villagers. There is a deep fear in communities facing mining, oil and gas activities in Indonesia that their homelands will turn into another 'Freeport.' The local people around the Tangguh project fear that more human rights violations will ensue at the hands of the notorious Indonesian military (TNI) and mobile brigade police (BRIMOB). There is already BRIMOB presence in the area at a nearby logging concession site operated by the Jayanti Timber Group.

BP is attempting to set up community-based security and plans to train local villagers as security. However, BP's ability to do this is limited. The corrupt and brutal military sees corporate investment as an opportunity to extort money in the guise of protection of the operations that are of economic importance to the country. The military has been known to encourage and create conflicts, attribute violence to the independence movement OPM (Free Papua Organization) then use this manufactured instability to extort protection money from companies with interests in the affected area. BP has made it clear it does not want a security contract with the Indonesian military but the military clearly wants a contract with BP. If the project is an object of national economic interest, which BP is, under Indonesian law means it must be protected by the military and thus the military will likely assert its presence in the area.

Exxon Mobil's temporary closure of its LNG operations due to the security situation in Aceh, Indonesia's western-most province also seeking independence from Indonesia has also made it more difficult for BP to show their partners that Indonesia is secure enough for investment. For hardliners in the Indonesian government, security could be a further excuse for cracking down on political dissent in West Papua. The closure of Exxon Mobil prompted more military operations in Aceh and with this came further abuses of civil and human rights against the Acehnese. The same is expected to occur in West Papua to avoid any disruption at Tangguh in order to assure potential buyers that supplies will be secured. West Papua's security situation was further questioned with the assassination of Theys Eluay, a leading figure in the Papua independence movement, on November 10, 2001 by unknown assailants. Theys Eluay's murder sparked angry protests by thousands of his supporters who blame
the Indonesian military for his death. Many observers fear further violence could rock this region in the future.

Some community leaders have accused the military of trying to provoke trouble in the neighbouring Wasior district, where ten people died in 2001 in clashes with police. After the killings, 'Operation Comb and Destroy' was put into practice. This resulted in arrests, beatings and torture of local people, including women and children, as police used violence in an attempt to extract information about the killings. In late June 2001, one woman was shot dead. Around 5000 people have fled their villages in search of safer places. Between 300 - 600 BRIMOB, regular police, and troops have been flown into the region bringing numbers to an estimated 2,000. Villagers remaining in Wondoboi, where the June shootings happened, were prevented from tending their gardens, gathering sago, hunting or fishing. Clearly, BP is moving ahead with plans to operate in this area during a time of tension, conflict and human rights abuses.

Indonesia's military has enjoyed a revival under current President Megawati Sukarnoputri after falling from grace after the overthrow of Suharto in 1998. The military has long sought income to cover its operational needs. An ambush killing of two American schoolteachers and an Indonesian one year ago near the Freeport mine put international spotlight on the area and the military who guard the site. The military denies that troops were involved and place the blame on separatist rebels. However, some Papuan rights groups claim the military could have staged the ambush to extract higher payments for security. Company documents show Freeport's payments for "government-provided security" were US$10 million for 2001 and 2002.

Mangroves

Bintuni Bay is home to a 300,000-hectare mangrove ecosystem. The rapid transformation of the Bintuni Bay involves forever changing the largest remaining mangrove reserve in Southeast Asia, and the world's second largest mangrove ecosystem, home to seven tribal groups and numerous nearby local communities as well as exceptional marine biodiversity characteristic of the Arafura Sea (part of Indo-Australian waters). Bintuni Bay supports an important shrimp export industry while the coastal areas in the Bintuni Bay support 3000 households. The mangrove ecosystem at Bintuni Bay is already under pressure from a woodchip export industry. Interest in the protection of the area led to a proposed Bintuni Bay Nature Reserve, which would protect approximately 267,000 hectares of the ecosystem, 60,000 hectares of which is in the bay. Mangroves in Indonesia are being depleted at an alarming rate; mangroves once lined coastal areas of Java and Sulawesi but are now becoming a rare sight. B
intuni Bay is also slated to become another lost mangrove ecosystem when the transformation from mangrove ecosystem to construction and operation site of the Tangguh LNG project including extraction and processing facilities is completed.

A BP study predicts the following environmental impacts: noise and light pollution; gas emissions including sulphur dioxide, nitrogen dioxide, carbon dioxide and hydrogen sulphide; liquid and solid waste from gas drilling, LNG processing, vehicles and shipping; solid waste including mercury contaminated activated carbon; sanitary waste; port activities may interfere with local fishing and shrimping and transportation between villages; the airport may attract "unauthorised settlement" placing a higher burden on local ecosystem; and bilge water from LNG tankers may introduce exotic species that could alter the ecology of the Bay (Report available at:
 http://www.bp.com/location_rep/indonesia/index.asp).

Human rights and environmental groups throughout Indonesia and abroad have become increasingly critical towards the Tangguh project. Besides destroying a vast tract of important protected natural reserve, objections and protests are also based on a series of exploitation activities and site clearing, which did not have such a rosy outcome as the company had promised like that written in their periodical bulletins.

For instance, the refinery train sites in Tanah Merah were appropriated at the cost of a fraction of one dollar per square meter. The company has been very aggressive in its 'community relations' agenda, and according to members of the local communities, public consultations at times were merely geared towards gaining community consent. BP Tangguh's 2002 Environmental Impact Assessment experienced controversy when the community highlighted unresolved issues including the destruction of sago forests by the project, the relocation of the LNG plant from Weriagar to Tanah Merah, the possible deaths of 48 children from seismic exploration activities, and land compensation issues.

There are nine indigenous groups in the Berau/Bintuni area that depend on local natural resources like shrimp, fish and sago for their income. The political and legal situation in West Papua does not permit local communities the right to veto projects on their land. The sago trees, which provide a staple food for local people were destroyed during seismic surveys in 1996 and 1997. This destruction of the local people's food source is a clear violation of the human right to feed oneself.

BP has manipulated the community's right to information on the impacts of LNG production. The Ecologist reported that all the information available to local villagers in the project area has come either from BP, NGOs paid by BP, or Indonesian government officials, "anyone else who tries to discuss the issue with local people is liable to be arrested." The remoteness of the site is similar to the situation at the Freeport mine, making it easier for the authorities to control information. This is probably why the tragic death of 48 young children in Weriagar village in 1996 was never widely reported at the time. According to The Ecologist, the babies died shortly after ARCO (BP bought ARCO in 1999), started drilling for gas in the river, the villagers' only source of water. The villagers wanted to report the deaths to the regional government, "but when troops arrived to protect the site, it was made clear to them that it would be in their interests not to make a fuss." The re
sidents claimed that test wells drilled by ARCO in 1997 poisoned a river and led to the deaths of 48 babies in the nearby village of Weriagar. BP insists the cause of death was an outbreak of measles and was unrelated to the drilling. BP then set up a trust fund to allow a neutral body from the district's main town to investigate the claims and arbitrate the dispute. At a 'conflict resolution' meeting in 2002 between NGOs, local community representatives, government officials, and BP, an agreement was made to conduct an independent investigation into the deaths. According to one recent report, this process appears to have reached an impasse since the NGO charged with the investigation has no funds and the villagers are unwilling to allow the victims' bodies to be exhumed for forensic analysis.

On April 15, 2002, the Environmental Impact Assessment (EIA) went through a public provincial hearing and evaluation. Overall, the hearing revealed that there was much lacking in the EIA including the community's lack of adequate information about the impacts that will result with the Tangguh project and the lack of access of the community to the EIA and supporting documents like the terms of reference, environmental management plan, environmental monitoring plan, among other documents. Based on these aspects, it was made clear during the hearing that the assessment should not gain approval from the Ministry of Environment. Only one document related to the EIA was found in a village in the Aranday Regency while other villages did not receive this document. According to Indonesia's new regulations regarding EIAs, the community has the right to information regarding a project that will be developed in their area prior to the creation of the EIA. The Manokwari NGO Alliance o
n Tangguh Advocacy noted discrepancies in BP's statements regarding community participation. BP has stated that 52 communities from three districts (Manokwari, Fak-Fak and Sorong) were involved in the evaluation of the EIA's terms of reference. However, the NGO Alliance noted that at a public hearing and evaluation of the EIA's terms of reference, only nine villages were involved.

Beyond the local and indigenous peoples' boundaries at Bintuni Bay, a critical issue for the Papuan people will be the likely spatial and social transformation of the northern coastal lands and waters of Papua including the neighbouring "property blocks" of the oil companies. If the Tangguh project were proceeding as the company and government wished, land grabs on a massive scale, suppression of dissenting voices against the project, as well as indiscriminate cutting of the remaining mangrove belts, may well be the three problems of most serious consequences to the local people.

In many ways, the women will be hurt the most by the transformation of their environment. The women in these communities do the crab fishing and thus depend on the mangrove environment. The crab fishing provides not only family income but also the main dietary source of protein. The alteration of the seascape and the surrounding landscape including the predicted rise of surface water temperature in the bay and the slower cycle of drainage due to the installed mesh of pipelines will have significant impacts on the reproductive capacity of key animal species in the area. Upon learning the extent to which the bay area would be changed, a local female leader commented bitterly that "from now on, I will give extra comfort and care to my grandchildren, for in the future they will live in a barren homeland, and I will not be around to ease their pain."

Repression, tension and conflict

The existence of BP via the Tangguh project has caused opposition in the area. Not long after BP announced its plans for Tangguh, the June 2001 Wasior killings was a message of repression to the local communities. The British Ambassador to Indonesia Richard Gozney visited Tangguh. Surprisingly, Ambassador Gozney stated his approval of military operations in the area. Gozney's approval for military establishments in the Tangguh area revealed that the British government viewed the success of the Tangguh project as impossible without the existence of the military forces. A number of high military officials and Indonesian national police have often visited the Tangguh project since the set up of the project in the area.

On May 13, 2002, the Saengga community in Babo Regency, Manokwari District, held a demonstration at the BP-Indonesia Base Camp in Saengga Village. This demonstration was an act to show the community's discontent with the inconsistency of the Manokwari local government in the realization of the agreements made in a workshop held in Saengga from April 24 to 27, 2002. Several important agreements were made concerning land prices, status and use in Saengga and were to be further discussed in Manokwari but no follow-up actions were taken thus sparking the protest by the Saengga community.

Civil society and military forces are not the only opposing forces in the area, there is also tension between those in the local community who oppose the project and newcomers to the area who will work at the Tangguh project and approve of the project. The immigrant work force, which is quite a number to Babo has caused competition between the local work force and the outside work force in getting employment at the project. For example, resentment has resulted in the community where PETROSEA, a company that requires a trained work force in construction engineering and mining, has left out local people in their work force who do not have the required skills.

BP Propaganda Smokescreen

On the Environment

In 2000, BP went so far as to change its corporate symbol from a shield to a sunburst, and for a time, promoted the slogan "Beyond Petroleum." BP has recently promoted itself as the world's largest producer of solar energy. BP simply achieved this target by spending $45 million to buy the Solarex solar energy corporation. This amount is a small fraction of the $26.5 billion it spent to buy ARCO and the $110 billion it spent to buy Amoco in order to increase BP's production capacity for oil. BP spent $100 million on legal/advisor fees for buying ARCO, an amount more than double its solar investment. According to Greenpeace (1999), for every $10,000 BP Amoco spent on oil exploration and development in 1998, $16 was spent on solar energy. Furthermore, BP's solar subsidiary accounts for only 0.1% of BP's revenues.

BP has stated that Beyond Petroleum means "being a global leader in producing the cleanest burning fossil fuel: Natural Gas." Natural gas does emit somewhat less carbon dioxide than oil for the same energy produced. But when fugitive emissions, or leaks, are taken into account, the difference, if any, is very small. As a CorpWatch special report pointed out, "for the climate, natural gas is at best an incremental improvement over oil, and at worst a distraction from the real challenge of moving our societies away from fossil fuels."

During the UN World Summit on Sustainable Development (WSSD) held in Johannesburg, South Africa, in August 2002, a coalition of green groups distributed their version of Oscar awards to companies guilty of 'greenwash' - using an environmental cloak to disguise their continued poor practice. BP received the 'Best Greenwash Actor' award for a re-branding campaign that has included the adoption of a sunburst/flower-like logo and the slogan 'Beyond Petroleum.' According to one group of BP shareholders, BP spent more on their new eco-friendly logo in 2000 than on renewable energy. BP CEO Lord Browne insisted that BP is an industry that "will be dominated by oil and gas for the next 30 to 50 years."

Greenpeace has launched SANE BP, Shareholders Against New Exploration, a group of BP/Amoco shareholders who are demanding that the company shift their investments away from oil exploration and into renewable energy such as solar and wind. Alaskan natives attended the BP-Amoco shareholders meeting in London in 1999, where they confronted company executives about the devastating impacts of global warming on their environment and traditional lifestyles. Despite the fact that the Arctic is currently warming at a rate three to five times faster than the global average, damaging wildlife and causing alarming rates of glacial melting, BP wants to continue with its Arctic oil exploration plans.

Besides the spreading of propaganda, BP is also recruiting non-governmental organizations (NGOs) as allies. Their focus has been on becoming friends with internationally and nationally recognized NGOs in order to build a false profile of environmental and social accountability in the areas where they operate. BP is currently part of the Energy and Biodiversity Initiative (EBI) initiated in 2001, that according to the Conservation International website, attempts to integrate biodiversity conservation into oil and gas development.

The EBI, convened by the Center for Environmental Leadership in Business, is bringing together four major energy companies and five of the largest conservation organizations to share experiences and build on intellectual capital to create value and influence key audiences. The following organizations have committed senior representatives as well as financial and in-kind resources to the Initiative: BP, Chevron Texaco, Shell International, Statoil, Conservation International, Fauna and Flora International, Smithsonian Institution, The Nature Conservancy, and The World Conservation Union (IUCN). There are four working groups, co-led by representatives from the participating 'energy companies' and conservation organizations. BP, and Fauna and Flora International are co-leading the Metrics Working Group that has resulted in performance indicators for measuring the positive and negative impact of oil and gas development on biodiversity. Meanwhile, BP and Conservation Internati
onal have collaborated on the BP Tangguh Project. The positive contribution to biodiversity protection, if any, with this initiative is unclear. However, it is clear that the oil and gas companies have greatly enhanced their image with this collaboration with international conservation groups. Areas of significant biodiversity that also contain oil and gas reserves have no doubt been jeopardized with this initiative.

On Investing in Communities

In a BP publication, it was noted that 70% of BP's total community investments are concentrated on North America and Europe. BP not only admitted this but also stated that they operate in countries with "fragile social structures and limited experience in the market economy." Meanwhile, BP made profits of approximately $14 billion in 2000 but its social investment spending totalled $80 million. BP has also boasted that more and more governments like China, the UK and Trinidad have sought out international companies like BP to request their help in internal concerns. Indeed, this is a favourable situation for BP but a dangerous and likely disastrous situation for local communities and governments where BP operates. Unfortunately, countries facing economic crisis are forced to seek foreign investors like BP that feel it is their business to override national policies on several key issues. BP interests have superseded internal matters in the past in countries such as Colo
mbia and the U.S., while local community interests and rights have been forsaken and governments have been placed further in compromised positions. BP has already been known to spend loads of money on lobbying for policies that favour BP business like the US energy policy especially in terms of exploiting Alaska.

Since June 2003, BP Indonesia has implemented Community Development activities in nine villages that will experience direct impacts from the construction of the Tangguh LNG refinery. One of the current programs is the distribution of scholarships and capital assistance for the agricultural and fishing industries. The villages that have received the initial funds are Saengga, Tanah Merah, Irarutu III, Tofoi, Weriagar, Mogutira, and Taroy.

The BP Community Development Team have held meetings with the community in Irarutu III Village in Babo to talk about plans for the provision of annual assistance funds in the amount of 100 million Rupiah for as long as BP operates in the area. At the moment, preparations for the management of funds including forming a fund management team in the village are ongoing. The focus of development remains unknown. However, it is expected these funds will be directed towards shifting the community's concern over the ocean to other activities. In Saengga Village, community development funds are managed by the Saengga Community Development Committee are directed towards managing telephone kiosks and not towards activities that will support them like their marine environment once did.

Other than community development related propaganda, BP has also boasted its Environmental Impact Assessment (EIA), hailing it as an integrated assessment and a good example for all LNG operations in Indonesia. BP has involved all parties from community leaders, local leaders, the government, NGOs, and experts in the environmental, biology and social fields. However, the local communities still do not possess adequate information on all the impacts of the Tangguh project, especially the negative impacts. Key environmental documents have also been withheld from the community. This does not fulfill local environmental regulations (Keputusan Kepala Bapedal No. 8/2002) that stipulate the involvement of local communities in the drafting of the EIA (AMDAL) and the disclosure of information by the company.

The marketing of the LNG product that is still uncertain has implications on several planned activities including the resettlement plan of the Tanah Merah community. BP's use of various methods to "increase the consultation process with various parties" is seen as a strategy to divert community attention from the uncertainty of the market conditions. The local communities remain poorly informed of such market uncertainty that affects them and their future.

BP's Global Track Record

BP has failed in their relations with several governments like Iran, Iraq and Nigeria, in the past where BP has been nationalized out of existence, where it was regarded as an arm of the British government. BP has attempted to hide its ties with the British government but the ties are still strikingly close that rivals call it "Blair Petroleum."

BP's 1,100 mile Baku-Tiblisi-Ceyhan pipeline from the Caspian sea to the Mediterranean has sparked outrage from a coalition of over 60 environmental organisations and human rights groups that warn the project will re-ignite regional conflicts and will destroy roads, homes, fields and damage many people's livelihoods. Only a minority of those affected will be eligible for compensation.

According to a report commissioned by the Colombian government and compiled by a high-level commission including the President's human rights advisor, the Attorney General and Ombudsmen, BP collaborated with local soldiers involved in kidnappings, torture, and murder. The unpublished document alleges that the oil company compiled intelligence including photos and video tapes of local people protesting oil activities, and passed the information on to the Colombian military which then arrested or kidnapped demonstrators as "subversives."

An intelligence report linked to the Sunday Times documents how BP used bribes and a supply of military arms to systematically undermine the government of Azerbaijan. The subsequent coup, which took place in 1993, caused the death of 40 people along with violence and repression of the Azeri citizens. A year later BP and Amoco signed a deal worth US$8 billion dollars, awarding them drilling rights in the country.

Despite, the propaganda and recruited allies, BP's global oil, gas and petrochemical empire continues to grow, garnering profits at the expense of human rights, indigenous peoples' rights, and environmental sustainability.

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