British aid to Indonesia under fire

Press Release from the office of Ann Clwyd, MP.
7 September 1995

Evidence which suggests illegal use of British aid funds and of a linkage between aid and arms sales to Indonesia, is published today in an extensive study of Britain/Indonesia's bilateral aid programme, carried out by Labour MP Ann Clwyd.

Information from the report, which suggests the possible misuse of overseas aid money, has been sent by Ann Clwyd, MP for the Cynon Valley, to the National Audit Office. She has asked the Auditor General to conduct an investigation as a matter of urgency.

"I have provided the National Audit Office with information and I can provide further evidence they may need for the investigation," said Ann Clwyd.

The original investigation into the Pergau Dam was started as a result of a letter sent by Ann Clwyd to the National Audit Office when she was Shadow Secretary of State for Overseas Development.

Ann Clwyd has asked the Auditor General to pay particular attention to the following aided projects in Indonesia and East Timor:

• Shortwave Transmitter Project, installed with an ATP soft loan of almost 27 million. It is doubtful that this project was properly appraised. The lead contractor was GEC-Marconi Communications Limited, part of GEC's electronics systems division.
• Training for the para-military Indonesian National Police was paid for with Overseas Aid money. ODA's own guidelines restrict aid to non-military security organisations. (At least one Indonesian para-military officer who received this training has been shown to be responsible subsequently for severe human rights abuses in Indonesia and East Timor, according to a sworn statement from an East Timorese.)
• Projects funded by Overseas Aid money in East Timor may have been unlawfully sanctioned by the then Foreign Secretary, through a misuse of powers in the Overseas Development and Cooperation Act 1980.
• The Transmigration Planning Project is officially a scheme to reduce overpopulation in Java and Bali. It received a 2.5 million grant from the British Aid budget. The essence of this programme is to colonise areas far from Indonesia's population, such as East Timor, by Javanese peasants, who are fiercely loyal to the regime.

The report shows that there is an intriguing link between controversial aid contracts, former Tory ministers and unaccountable quangos.

It exposes the myth of Britain's concern for human rights by revealing that just six days after the infamous Santa Cruz massacre in November 1991 in East Timor, where up to 270 people died, the government signed a memorandum of understanding relating to defence contracts with the government of Indonesia.

Evidence is provided that aid expenditure on certain Indonesian projects fails in terms of the ODA's own test of economy, efficiency, effectiveness and developmental soundness. The role of the British electronics giant GEC and former Trade Minister (and recently appointed GEC director) Richard Needham is also put under the microscope.

Ann Clwyd completed the inquiry after tabling hundreds of Parliamentary questions in the face of consistent government secrecy.

"I have tabled very specific questions," said Ann Clwyd, "but as so often in the past, the Foreign Office has refused to answer the questions on the grounds of 'disproportionate cost'. I find this incredible that millions of pounts have been poured in to supporting a regime which has just been named as the world's most corrupt, and yet government ministers refuse to spend 450 to give honest answers to straight questions.

I urge the Auditor to investigate the findings which I have drawn to his attention and to bring to account those responsible for the apparent misuse of British aid."