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To the Indonesian Government

On civilian militias and state security forces:

    · Take immediate action to investigate and prosecute those involved in incidents of violence involving the pulp and paper industry and local communities, as documented in this report.
    · Discontinue the practice of creating and training private militias and armed groups. Investigate and punish privately organized militia and vigilantes who violate human rights.
    · Clarify guidelines for police role in company operations, using the U.S. State Dept/U.K. Foreign Affairs Voluntary Guidelines on Security and Human Rights as a framework (a copy of the guidelines is attached as Appendix A).
    · Complete a transparent audit of military businesses, and prepare a feasible plan for how military funding can be brought on-budget within the next five years;
    · Improve civilian oversight of police. Such initiatives might include establishing civilian review boards to monitor police actions and multi-stakeholder civilian safety boards that involve civilian administrators, police, and community members chaired by a trained facilitator to address security and crime problems. An independent "Rural Security Desk" could be staffed with NGO and community monitors for communication of information regarding violations by police, company security, and private militia groups to the appropriate authorities, including civilian administrations and police.

On land tenure and forestry reform:

    · Take firm steps to fulfill commitments made to the International Monetary Fund (IMF) and the Consultative Group on Indonesia (CGI, a multilateral and bilateral donors advisory forum convened by the World Bank) to address tenure disputes on State Forest land. Such steps would include the reclassification of State Forest illegally established on indigenous territory, support for implementation of legislation providing for communal titling for indigenous groups, and a transparent titling process with a built-in appeals process through an independent land claims board/ombudsman.
    · Support the adoption of the natural resource management bill stipulated under the People's Consultative Assembly Decree TAP MPR No IX/2001. The bill requires government authorities to secure permission from local people before granting exploitation permits and guarantees the rights of local tribes to manage their ancestral lands.
    · Actively support establishment of third party monitoring of illegal logging.
    · Ratify the International Labor Organization's Convention No. 169 concerning Indigenous and Tribal Peoples in Independent Countries (a copy of which is attached as Appendix B) and adopt legislation to enshrine its provisions in domestic law.

To Asia Pulp & Paper/Sinar Mas Group Forestry (APP/SMG)

On company security:

    · Take immediate action to investigate those alleged to be involved in human rights abuses. Where appropriate, discipline or dismiss employees found to be responsible for human rights abuse. Urge the appropriate authorities to investigate violations by police and private security personnel acting at company behest.
    · Establish and enforce performance standards for company security and engagement with state security forces, and undertake a pro-active risk assessment of social conflict and human rights conditions as part of future security arrangements for both present and future expansions, using the U.S./U.K. Voluntary Principles as foundation.

On land claims and community relations:

    · Immediately undertake rigorous, transparent, and independent audits of land claims and social impacts of all operations. Remove conflicts of interest by ensuring that auditors have no personal or professional association with the corporations in question, the corporations do not interfere with the audit work plan, access to operations to be audited, or the audit report. Those interviewed should be independently chosen by the auditor, not APP/SMG staff, and village visits and interviews should be undertaken independently without APP/SMG staff present. Social impact auditors should have human rights expertise, and part of the output of the audit should be recommendations on how to ensure that human rights violations will not occur in the future in association with APP/SMG operations or suppliers.
    · Establish a regular forum for dialog with communities and NGOs.
    · In the case of existing company land holdings, establish representative community involvement in development project decision-making and the delivery of benefits. Use payments to individuals (or so-called "family settlements") solely to resolve disputed individual claims to land; such payments should not be used as a substitute for investigation of crimes or as a means of satisfying company obligations to provide community development assistance. Take immediate steps to address compensation disputes for seized land. Establish independent, transparent ombudsman and clear mechanism for complaints and dispute mediation.
    · In the case of planned future expansions, ensure that all wood suppliers are not complicit in human rights abuses and meet international legal standards regarding property rights. Pro-actively address land tenure and participation, establish human rights oversight on joint ventures.
    · Join the U.N. Global Compact on corporate responsibility (see Appendix B) and establish clear mechanisms for implementation and monitoring of its principles.

To Multilateral and Bilateral Donors

    · Take strong leadership to press for reforms to protect human rights: at the twelfth Consultative Group on Indonesia meeting on January 22, 2003, send a clear message that immediate steps must be taken to ensure forest industries are not complicit in human rights abuses, including:

        1. comprehensive audits of military and police business, and meaningful efforts to bring military and police spending on-budget,
        2. an independent timber monitoring body with authority to influence the revocation of operating permits,
        3. an independent registration board/ombudsman for titling of indigenous communal land claims.
        4. an end to government support and training of civilian militias, both formal and informal, and prosecution of those guilty of human rights abuse.

    · In order to assist the Indonesian government in meeting these commitments, donors should consider funding independent timber monitoring initiatives and indigenous land registration boards/ombudsmen, as well as contributing to capacity building measures for these institutions.
    · Reforms should be cross-sectoral so as not to be counter-productive: for example, donors should send unequivocal signals to the Ministries of Finance, Trade, and Forestry that restructuring of indebted forest industries should be conditioned on reducing production capacity to balance with the currently available, legal wood supply.

To Private Financial Institutions

    · Undertake rigorous due diligence to ensure that companies in which investments are made do not violate international human rights law. If abuses are alleged in the corporations in which institutions have invested, private financial institutions should use urge the companies to take action on these cases.

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