How the US Protected ExxonMobil From Becoming Ensnared in Brutal Indonesian Conflict

Women soldiers of the Free Aceh Movement.

Photo Credit: Ministry of Defense of the Republic of Indonesia/Wikimedia Commons.

The greatest strategic challenge facing ExxonMobil Corp., the largest oil company in the world not owned by a state, is access to new oil reserves. Resource nationalism – the inclination of many Middle Eastern and other post-colonial governments to control their own oil – has locked the corporation out of many oil opportunities. This has led ExxonMobil to riskier political frontiers in Africa and Asia, countries where the government is too weak or corrupt to produce its own oil. Also, in these states, oil and gas production exacerbates internal conflicts and incites guerrilla armies because controlling an oil or gas field can be a ticket to sudden wealth.

When Exxon and Mobil merged in 2000, Exxon inherited a number of Mobil properties in conflict zones – in Nigeria, Equatorial Guinea, and Indonesia. The latter property – a highly profitable natural gas field on Indonesia’s Sumatra peninsula – drew ExxonMobil’s executives immediately into the bloody war for independence being waged by the Free Aceh Movement, known by the initials G.A.M. ExxonMobil paid Indonesian military forces to battle G.A.M. around the perimeter of its fields; human rights investigators accused the Indonesian forces of engaging in widespread torture and abuses. G.A.M. rocketed and attacked ExxonMobil and its employees, seeing the corporation as complicit with the Indonesian military.

As part of the research for “Private Empire,” I filed Freedom of Information Act requests with the U.S. State Department seeking embassy cables and other documents about how the Bush administration managed ExxonMobil’s position in the Aceh conflict. The cables revealed a startling series of episodes in which the administration worked with ExxonMobil in Indonesia to extract the corporation from the conflict and reduce the violence that was destabilizing Indonesia’s fledgling democratic order. In one episode previously unreported, the Bush administration threatened to designate G.A.M. as a terrorist organization if it did not stop attacking ExxonMobil’s property and personnel. The excerpt below, from a chapter titled “Do You Really Want Us as An Enemy?” describes what happened. –Steve Coll

During the first week of April 2001, United States Ambassador to Indonesia Robert Gelbard flew to Banda Aceh, the seaside provincial capital, a flat and humid expanse of low-slung, water-streaked concrete buildings shaded by palm trees. A Swiss peacemaking organization, then known as the Henry Dunant Centre, maintained a local forum for on-again, off-again talks between Indonesian and G.A.M. representatives. Gelbard scheduled separate meetings with leaders on each side of the conflict. He raised the subject of human rights with Indonesia’s government delegation: G.A.M. certainly committed abuses, Gelbard told them, but the international community holds democratically elected governments to higher standards than guerrilla groups.

ExxonMobil had no covert agenda in closing its Aceh operations, Gelbard said. The corporation had been entirely justified in its concerns about security; the United States supported ExxonMobil’s decision but had not instigated it.

The ambassador became more forceful when the G.A.M. delegation arrived. “G.A.M. is clearly responsible for the attacks on ExxonMobil,” Gelbard announced. “Some G.A.M. leaders are now even boasting about shutting down ExxonMobil.” He said that Hasan di Tiro, G.A.M.’s leader in exile, had promised in private meetings that he would issue a public statement that ExxonMobil was not a target of the guerrilla campaign; he had never done so. G.A.M.’s attacks on the oil company now were a “major mistake,” Gelbard declared.