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Indonesia:

April 2002

To: Dr. Peter Watson
President and Chief Executive Officer
Overseas Private Investment Corporation
( OPIC )

We regret to be informed that the Overseas Private Investment Corporation (OPIC) is financing the PT Unocal West Seno I and II projects using US taxpayer dollars. PT Unocal is a company that has committed "Human Rights Violatio" against the Marangkayu community. For several years, we, the community, have been suffering as a result of the operations of PT Unocal in the Kutai district of East Kalimantan, Indonesia.

After reading a letter from OPIC dated February 11, 2002 directed to JATAM in Jakarta, we, the community were heavily disappointed with the contents of this letter. We, the community, who have been continuously experiencing negative impacts as a result of the oil dredging being carried out by Unocal found several discrepancies in this letter:

1. The "due diligence" process that OPIC stated as occurring from January 11-18, 2002, failed to directly meet with the community that up until now have become victims of PT Unocal. Therefore, it is clear that OPIC failed to describe actual conditions.

2. The statement regarding the results of the "due diligence trip" that PT Unocal has conducted joint efforts to communicate constructively with villages near the Santan Terminal is an outright lie. To meet with us, the community, PT Unocal has never made themselves easily available nor during such meetings with PT Unocal, the company has never allowed an opportunity for constructive communication between us, therefore we regard OPIC's conclusions to be without merit.

3. The existence of the KMM (Marangkayu Community Committee) is only a strategy of PT Unocal to escape responsibility of their human rights violations. KMM represents the interests of PT Unocal. The idea to form such a committee came from PT Unocal, the East Kalimantan local House of Representatives, the East Kalimantan local police chief and the military commander at a meeting on October 12, 2000 at the East Kalimantan local House of Representatives. To gain justification, they recruited individuals from the community and an international NGO funded by PT Unocal. Community representatives were not involved. The work of KMM has been regarded by the community as manipulative and not in accordance with targets. KMM's existence has also caused more disadvantages for the community because this group has caused horizontal conflict. For these reasons, the community rejects the existence of KMM and demands the disbanding of KMM. OPIC only communicated with KMM and has not considered the existence of the community-based organization LMPLH (Lembaga Masyarakat Peduli Lingkungan Hidup/Institution of Environmental-Concerned Community).

4. OPIC has not referred to the seizure of the community lands by PT Unocal by force that have been ongoing since 1970.

5. OPIC pointed out the community development efforts of PT Unocal in their letter, however PT Unocal only began conducting such efforts after a shooting incident occurred during a demonstration on October 8, 2000, also known as "Dark Sunday." The community were protesting the actions of PT Unocal and the government and PT Unocal responded by calling the police force, who came in and shot community members. Because of this, we, the community, refer to PT Unocal"s community development as "Bleeding Community Development."

Furthermore, based on OPIC"s conclusions regarding community development, we would like to state the following on the implementation of community development in the field : ( The education fund program is often enjoyed only by the children of PT Unocal employees; ( Drinking water has only been made available to two neighborhoods (1/4 of the village area) and therefore the statement that drinking water has been provided to two villages is a lie; ( Support for shrimp ponds is insignificant since the shrimp are dead.

6. The OPIC team only talked to people from PT Unocal and NGOs supporting PT Unocal (Care International, KAPITAL, Pesut and Cori) that have up until now been funded by PT Unocal. These groups have attempted to create divisions in our community.

7. Efforts by PT Unocal to improve wastewater management over the last two years have been insignificant. Pollution is still occurring, this includes among others :

( Rice fields around the site still reap less harvest ever since the area became polluted with waste from PT Unocal. ( Shrimp ponds are increasingly being destroyed. PT Unocal efforts to provide assistance for the shrimp farming have not been adequate and brought no results. The pollution is continuing and has caused critical massive deaths of shrimps that have been increasing over the last two years. The shrimp farmers are now only harvesting water. ( PT Unocal"s waste discharge area has been extended and this has increased pollution to the area significantly with the waste dispersal area increasingly becoming wider. Before the extension, the shrimp pond farmers still could harvest Bintik shrimp and crab, but after the extension of the waste pipe, Bintik shrimp and crab have also died.

8. PT Unocal has broken the law with respect to their new West Seno projects. Based on stipulations of the Environmental Act No. 23/1997 and Oil and Gas Act No. 22/2001, when there is a new project it is must first be socialized to the public so that local communities are aware of the new project in their area. Following this, an environmental impact analysis (AMDAL) must be socialized to the community. We, the community, have never received any information on the plans of the new PT Unocal project and the impacts for the community. And there was never any public consultation done of the environmental impact analysis with the community. The actions of PT Unocal clearly have "broken the law."

Because of this, we, the Marangkayu community, joining together with the Lembaga Masyarakat Peduli Lingkungan Hidup (LMPLH), a community-based organization supporting and made up of communities victimized by the operations of PT Unocal, hereby state our position:

1. We demand that the OPIC team return to the field and talk directly with the community affected by PT Unocal in the Marangkayu area; 2. We demand that OPIC stop financial support for the PT Unocal"s new oil and gas project until all problems with the community affected by PT Unocal are resolved; 3. We demand that OPIC pressure PT Unocal to immediately resolve all impacts of exploitation on the Marangkayu community; 4. We appeal to the US public and NGOs to protest and persuade the American government and OPIC to stop financial support of PT Unocal until issues are resolved for the community impacted by PT Unocal.

Marangkayu, 04 April 2002 Impacted Community of PT. UNOCAL

To respond to this community statement or for more information, please contact M Ramli at JATAM East Kalimantan, mramli@jatam.org, jatam@samarinda.org

cc :

1. President Republic of Indonesia, Megawati Soekarnoputri
E-mail: presiden@ri.go.id
2. Head of the Indonesian General Assembly (Ketua MPR), Jakarta
Email: humas-dpr@dpr.go.id
3. Secretary General Indonesian House of Representatives (SekJen DPR)
Fax: 62 (0) 21-573 4804/571 5725
3. Head of Commission VIII House of Representatives, Irwan Prayitno
Fax: 62 (0)21 575 5800
Email: irwanprayitno@hotmail.com
4. National Human Rights Commission (KOMNAS HAM), Jakarta
Fax: 62 (0)21 392 5227
5. Women"s National Human Rights Commission, (KOMNAS PEREMPUAN RI),
Jakarta
Fax: 62 (0)21 390 3922
6. Indonesian Minister of Energy and Mineral Resources, Purnomo
Yusgiantoro
Fax: 62 (0)21 384 6596
7. Governor East Kalimantan
Fax: 62 (0) 541 42111
Email: Humas@kaltim.go.id
8. Local House of Representatives Level 1, East Kalimantan
9. Kutai Kertanegara District Head, East Kalimantan
10. Kutai Kertanegara Local House of Representatives , East Kalimantan
11. JATAM National, Jakarta
Email: jatam@jatam.org
12. Walhi
Email: walhi@walhi.or.id
13. Press
14. Harvey Himberg, Deputy Vice President Office of Investment Policy
and Director, Environmental Affairs OPIC
Email: HHIMB@opic.gov
15. Nancy Pelosi, US Member of Congress
Fax: 202-225-8259