British ministers under fire over financial deals with Indonesia

AGENCE FRANCE PRESSE - September 15, 1999

LONDON, Sept 15 (AFP) - British ministers were under fire Wednesday after it emerged that millions of pounds of public money had been used to help Indonesia buy jets and secure industrial contracts, newspapers reported.

The Times newspaper said 130 million pounds (195 million dollars) of public funds was used to help the Indonesian military -- accused of orchestrating a campaign of violence against supporters of independence in East Timor -- buy Hawk fighter planes from Britain.

The revelation will further embarrass Foreign Secretary Robin Cook whose "ethical" foreign policy was challenged by human rights activists after a British-made plane was used to intimidate East Timorese ahead of a referendum on the future of the territory.

Britain's Export Credit Guarantee Department (ECGD) underwrote payments to British Aerospace after the Indonesian economy ran into trouble last year. The money was used to help Jakarta reschedule payments on contracts for Hawks, The Times said.

Britain suspended export licences for the sale of arms, including nine Hawk jets, to Indonesia at the weekend, in the wake of the bloodshed in East Timor.

Meanwhile, the Guardian daily said Britain's National Audit Office was considering an investigation after it emerged that Trade Secretary Stephen Byers had overruled civil servants and given the go ahead for financial help to Indonesia.

The daily said according to official documents, Byers ignored warnings from senior civil servants who refused to back the help because they deemed Indonesia too risky for the investment of taxpayers' money.

Byers authorised the payment, however, "in view of the importance we attach to our relations with Indonesia," the Guardian reported.

Byers ordered the ECGD to underwrite a 1.1-million-dollar loan for a British engineering company, Va Tech Reyrolle Projects, to help the company win business building new power transmission lines in Indonesia.

The Guardian said Byers' decision was taken on July 19 against a background of a virtual moratorium on financial support for Indonesia amid alarm that Britain was already exposed should the country default on heavy loans.

Britain's dealings with Indonesia have been the subject of scrutiny since early September when pro-Jakarta militia went on the rampage, killing and driving out supporters of independence for the territory.

The violence follows a UN-organised ballot on the future of East Timor, a former Portuguese colony invaded by Indonesia in 1975, in which East Timorese voted overwhelmingly in favour of independence.

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