AMBASSADOR STRESSES AID, INVESTMENT IN PAPUA

UNCLAS SECTION 01 OF 03 JAKARTA 000291

SIPDIS

SENSITIVE
SIPDIS

SECSTATE FOR H - PLS PASS REP. FALEOMAVAEGA

E.O. 12958: N/A
TAGS: PGOV PHUM EINV EAID EMIN SOCI CASC ID
SUBJECT: AMBASSADOR STRESSES AID, INVESTMENT IN PAPUA

REF: 06 JAKARTA 11662 (NEW PAPUAN GOVERNOR)

JAKARTA 00000291 001.2 OF 003



1. (U) Introduction and Summary. On a January 21 - 24 visit
to Papua Province, Ambassador B. Lynn Pascoe stressed the
importance to Papua's development of both foreign aid and
foreign investment. He said that the U.S. was examining ways
to increase assistance to Papua, especially in the form of
public-private partnerships. He also reiterated our
longstanding position that the U.S. recognizes that Papua is
part of the Republic of Indonesia, and does not support
separatism in Papua or elsewhere in the country. Accompanied
by the USAID Mission Director and Economic Counselor, the
Ambassador toured the Freeport gold and copper mine and
visited community development projects that the company has
undertaken. USAID is exploring the potential for a
public-private partnership with Freeport in education and
capacity-building for local government in the Timika area.
In the provincial capital Jayapura, Ambassador held a town
meeting with U.S. citizens, met with Vice Governor Alex
Hesegem, visited a Community Health Center where USAID is
supporting Papua's struggle against HIV/AIDS, met with the
leaders of the Papuan People's Assembly, and held a dinner
with religious and civil society leaders. The visit received
heavy and favorable coverage in both the local and national
media. End summary.

Freeport Seeks USAID Support On Community Development
-------------- --------------


2. (SBU) The Ambassador, USAID Director and Economic
Counselor visited the Freeport MacMoran mining operation in
the Timika/Puncak Jaya areas of Papua on January 21 - 22.
After a helicopter tour of the Grasberg gold and copper mine,
which is at an elevation of 13,000 feet, the party returned
to Freeport's base and processing operations in the lowlands
near Timika.


3. (SBU) Freeport officials briefed the party on the
company's community development efforts. Freeport
contributes USD 25 million annually for direct programs in
local business development, public health, human capital
development and infrastructure. In addition, one percent of
Freeport's annual revenue goes into the Freeport Partnership
Fund, managed by local partner organization LPMAK, for
health, education, and economic development projects. The
Ambassador visited a hospital and a vocational training
center that receive finding through this mechanism.


4. (SBU) Freeport has approached USAID with a proposal to
form, together with the government of Mimika Regency and
LPMAK, a partnership to build capacity of local government to
provide services. The Center for Local Government
Innovation, a USAID-funded partner, has already determined
that the Mimika regency government's ability to provide basic
services is seriously deficient in almost all areas,
particularly education.

AmCits Welcome Ambassador at Town Hall
--------------


5. (SBU) On January 23, the Ambassador's party continued to
Jayapura, the provincial capital. The Ambassador met with a
group of about 150 American citizens at the Hillcrest
International School, which supports mainly missionary
families, many affiliated with Mission Aviation Fellowship.
Following a presentation on U.S. relations with Indonesia and
policies towards Papua, he discussed terrorism in Indonesia,
development assistance to Papua, and the Timika case, among
other topics. Some parents expressed their concern about an
intermittently-used TNI firing range near the school.

Vice Governor Emphasizes Shared Priorities
--------------


6. (SBU) In the absence of Governor Suebu, Vice Governor Alex
Hesegem outlined to the Ambassador the challenges to
development in Papua. The province's overall backwardness
and poverty was compounded by the dispersal of the population
over a large area, with many people still living in remote
villages. Nevertheless, Hesegem said, his administration was
making a concerted effort to improve infrastructure, health
care, and basic education. The Vice Governor also outlined
plans for administrative reform. Papua's budget needed to be
spent in a more transparent and effective manner so that it

JAKARTA 00000291 002.2 OF 003


would have a more appreciable impact on people's lives,
Hesegem said. Hesegem specified development of eco-tourism
and forestry enforcement as two areas in which he would
welcome U.S. assistance and training for Papuans.


7. (SBU) The Ambassador, recalling his meeting in September
with Governor Suebu (reftel),commended these priorities,
noting that they tracked well with our overall aid strategy
in Indonesia. USAID personnel were sent to participate in
Governor Suebu's international donors' conference last
September. The Ambassador outlined our major assistance
programs in the areas of health, education, and local
governance and said that we hoped to expand these into Papua.
Our overall approach, he said, was to help the Papuans help
themselves. We did not seek to impose our priorities on
Papua, but rather to assist the provincial government in
implementing the agenda it had already identified. A USAID
team will return to the area in 6 - 8 weeks to conduct an
assessment of the potential for forming a public-private
partnership with Freeport in the areas of education and local
government.


8. (SBU) The USAID Mission Director agreed that we shared
many priorities and noted that USAID was seeking to expand
its work on HIV/AIDS, malaria, and tuberculosis. We were
also active in expanding local governance capacity and
education programs in Papua. The Ambassador added that we
were looking at ways we could work with major foreign
investors in Papua, including BP and Freeport, in
implementing these programs.

MRP Says Special Autonomy A Work In Progress
--------------


9. (SBU) The Ambassador also met with the leaders of the
Papuan People's Assembly (Majeles Rakyat Papua, MRP),a body
created by the 2001 Special Autonomy Law and charged with
protecting the rights of indigenous Papuans. Chairman Agus
Alue complained that the central government had been
inconsistent in its implementation of Special Autonomy for
Papua, pointing out that although the national legislation
had been passed five years ago, the provincial MRP had only
been set up last year. Alue explained that most of the
regulations required to ensure effective and transparent
implementation of Special Autonomy had never been formulated.
The MRP, he said, was now working with the Papuan Provincial
Parliament on drafting these regulations together with a time
frame for their implementation. One aim of these
regulations, he said, would be to "control the flow of
capital and people into Papua," reflecting the MRP's concerns
about the influx of non-Papuans in the province. He urged
the U.S. to press Jakarta to make a good-faith effort to
implement Special Autonomy in full. MRP Vice Chairman Hanna
Hikoyabi argued that although Jakarta did not want the issue
of Papua to become "internationalized," the international
community has played a determining role in Papua's destiny
ever since the U.S. had mediated the New York Agreement
between Indonesia and the Netherlands in 1962 and the U.N.'s
subsequent recognition of the Act of Free Choice. She said
that Papuans were tired of being the objects of outside
parties' maneuverings and that they now feared extinction as
non-indigenous people "flooded into the province."


10. (SBU) The Ambassador assured the MRP that Washington was
interested in Papuans' welfare and concerns, and outlined
USAID's programs. Responding to criticism from some MRP
members about Freeport, Ambassador said that the company
employs and trains thousands of Papuans, and that rather than
attack the company, Papuans should seek ways to engage the
company as a partner in development. Examples abound proving
that foreign investment was a key component of growth and
development, and Papuans should welcome it.

Community Health Center: Partnership Against HIV
-------------- ---


11. (SBU) The Ambassador, accompanied by Vice Governor
Hesegem, visited the North Jayapura Community Health Center
(PusKesMas),which is one of six clinics participating in a
USAID-supported pilot program incorporating HIV/AIDS testing,
treatment, and education into existing community health care
programs. USAID, working through Family Health International
(FHI),is providing USD 9.5 million in technical and
financial support for FY 07, of which USD 3.7 million is

JAKARTA 00000291 003.2 OF 003


dedicated to programs in Papua.


12. (SBU) After a tour of the clinic, the Ambassador received
briefings from FHI staff on the scope of the HIV/AIDS
epidemic in Papua and ongoing efforts to combat it. FHI
staff explained that although there have been about 2,700
documented cases of HIV infection in Papua over the past 14
years, the Provincial AIDS Commission estimates that actual
number is currently about 11,000. The problem is much more
severe in Papua than elsewhere in Indonesia. The infection
rate per 100,000 is dramatically higher in Papua than
nationally (51.42 versus 3.61). In Papua, the challenge of
fighting HIV/AIDS is compounded by lack of skilled human
resources, dispersed and isolated settlements, poor
infrastructure, and low levels of health and education
generally.


13. (SBU) To address the problem, Papua's provincial
authorities, working closely with international experts and
donors including USAID, are incorporating HIV/AIDS testing
and counseling into the existing network of community health
care centers such as the one we visited in North Jayapura.
The newly elected Governor has strongly supported this
initiative, according to FHI and clinic staff. The
Ambassador also saw ample evidence of a public education
campaign, supported by international partners who are working
with churches and adat (tribal) organizations, to help
accurate information reach all levels of society. In
comments to the press, Ambassador Pascoe emphasized his
strong commitment to enhancing U.S. support for these health
programs.

Major Press Coverage
--------------


14. (U) The visit -- the first by an American Ambassador in
five years -- received ample coverage in both local and
national media. It was front page news in the Papuan press,
and the story was also picked up by major national outlets
such as Media Indonesia and the Antara news. Coverage
focused on U.S. assistance to Papua, particularly with regard
to HIV/AIDS and education. The media also reported the
Ambassador's restatement of our recognition of Papua's
incorportation into Indonesia and our hope that the central
government would improve its implementation of the Special
Autonomy Law. The key theme for the visit was U.S. support
for the welfare of the Papuan people, including by pushing
Jakarta to do more.
PASCOE