The Unfinished Lake House

The Minister of Agriculture during the Habibie era may become a suspect for receiving a house and land as a gift.

THE middle-aged woman was visibly reluctant to leave the house in the Tegal Lega administrative district of Bogor in West Java. Although Siti Sianah, the wife of Soleh Solahuddin, the Minister of Agriculture during the administration of former President Habibie, did finally emerge she was tight-lipped. “No interviews right now. Later,” she said on Friday last week.

What she should have spoken about was the matter of her husband who the AGO has named as a potential suspect in case of alleged bribery by Monsanto—a multinational company that is the largest developer of transgenic seed in the world, which also has operations in Indonesia. “The preliminary evidence is quite strong,” said Deputy AGO for Special Crimes, Kemas Yahya Rahman, on Tuesday last week.

Reports about the alleged bribery began to spread some three years ago. In early January 2005, the assistant prosecutor at the Crimes Division, Christopher A. Wray, submitted a dossier to the Columbia District Court in the US. The dossier stated that Monsanto had violated the Foreign Corrupt Practices Act because it had made an illegal payment of US$50,000 to a senior government official at the Indonesian Environment Department.

As a result of the case, the US capital market supervisory body fined Monsanto US$500,000. The company was also obliged to appoint an independent consultant for three years to improve the company’s system of compliance. The US Justice Department issued the company with an even heavier fine of US$1 million.

Like the capital market supervisory body, the US Justice Department also obliged Monsanto to improve the company’s system of compliance. If within a period of three years improvements to the system are deemed satisfactory, only then will Monsanto officials be free from threat of criminal legal charges.

In order to facilitate its transgenic cotton development operations in Indonesia, the company with its head office in the city of St. Louis, Missouri, spent some US$50 million. In addition to this, between 1997 and 2005 Monsanto reportedly paid out as much as US$700,000 to around 140 Indonesian government officials. In one case this took the form of a house and land that was given to the wife of a former senior official at the Department of Agriculture, valued at around US$360,000.

Prior to this distasteful news leaking, an Indonesian environmental non-government organization (NGO) had caught a whiff of something rotten. Tejo W. Jatmiko, who is currently the Executive Director of the National Consortium for Forest Conservation and Indonesian Nature (Konpalhindo), says that the suspicions grew out of the inconsistent positions being taken by Indonesian government officials over transgenic cotton trials in Indonesia.

Based on Law No. 23/1997 on Environmental Management, said Tejo, all trials of new products are obliged to have an environmental impact analysis. But this regulation was bypassed by a joint decree by four ministers dated May 17, 1999, which declared that transgenic cotton does not pose a threat to the environment. One of those who signed the decree was Agriculture Minister Soleh Solahuddin.

The environmental NGOs’ protests did not apparently diminish support for the development of transgenic cotton in Indonesia. Some two years later, Agriculture Minister Bungaran Saragih issued a decree allowing Monsanto to plant a limited amount of transgenic cotton in three regencies in South Sulawesi.

A coalition of environmental NGOs including Konpalhindo, the Indonesian Center for Environmental Law, and the Indonesian Consumers Foundation then challenged the policy at the State Administrative Court. The suit failed and was unsuccessful in higher courts up to the level of a Supreme Court appeal in 2005.

Tejo, who is now the Campaign Coordinator of the Indonesian Joint Secretariat Berseru, claims to have heard from someone in the Department of Agriculture about the existence of a shipment invoice valued at Rp250 million for the socialization of transgenic cotton. “Although we did not look into it closely because we were still concentrating on the legal challenge,” said Tejo.

The coalition of NGOs then contacted the Corruption Eradication Commission (KPK). All of the documents related to the case were handed over as supporting evidence. At the time, the KPK stated that the case would be studied first. The reason for this was that there was concern that the KPK would be unable to handle the case because its mandate is based on the 1999 Law on the Eradication of Corruption. “If that happens, the case could be submitted to the Attorney General,” said Tejo, quoting from a KPK official.

One by one, Monsanto’s representatives and officials whose names were mentioned in the bribery case were questioned by the KPK. They included for example former Agricultural Ministers Soleh Solahuddin, Bungaran Saragih and Anton Apriyantono, as well as the former State Minister for the Environment, Nabiel Makarim. As it turns out, the results of the KPK’s investigation were eventually submitted to the AGO in August 2007. According to KPK spokesperson Johan Budi S.P., the reason for this was, “Because it occurred (tempus delicti) prior to the enactment of Law No. 31/1999.”

Three months later, the AGO started the investigation. Soleh Solahuddin and Siti Sianah have already been questioned twice. PT Monagro Kimia CEO Gyanendra Shukla has also been summoned by the AGO. PT Monagro is a subsidiary company of Monsanto in Indonesia.

During the questioning of Gyanendra, among other things investigators presented him with a statement about three checks, one valued at Rp615 million and two others at around Rp200 million. The checks, which were issued between November 1998 and January 1999, came from Monagro and PT Branita Sandhini—a partner company that worked with Monagro in the procurement of transgenic cotton seeds.

Gyanendra’s lawyer, Palmer Situmorang, declined to elaborate on what exactly the investigators asked his client. “We were indeed asked to confirm some data. We also did some checking,” said Palmer.

A number of Tempo sources said that Monagro had spent money on “marketing costs” in order to facilitate its business endeavors in Indonesia. One of these was to purchase a 1,585-square-meter house and land in the Bogor Raya Lake housing estate valued at Rp1.2 billion.

The AGO’s Director of Investigations, Mohammad Salim, says that they are serious about investigating the case. “Not just that issue (the house and land), but other things too,” said Salim. Investigators have been given two more weeks to complete the dossier before proceeding to the police investigation stage and the determination of suspects.

The land and house referred to in the investigation is located in the Bogor Raya Lake housing estate. When Tempo went to the site on Friday last week, the house was still unfinished. The 4-5-meter-high masonry wall surrounding the house was already overgrown with moss. The exterior had been covered with corrugated iron, some of which was already rusting.

Only a part of the house’s foundations have been completed. There is no roof and some of the walls have already collapsed. “The house was built around five years ago but was never finished,” said Afdal, a local security guard. Afdal, who has worked as a security guard for more than 15 years, said he knows that the house is owned by Solahuddin.

When Tempo went to meet Solahuddin at his home in the Bogor Agricultural Institute housing complex in the Baranangsiang area of Tegal Lega, Bogor, he was not prepared to give any information. Nor was his wife. “Sorry, we can’t be interviewed yet because we are still negotiating with our lawyer. Another time, OK,” she said.

Abdul Manan, Deffan Purnama, Rini Kustiani

Tempo Magazine, No. 20/VIII/January15 – 21, 2008

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