Marianne Kearney, Jakarta – Riau, Indonesia's most oil-rich province in central Sumatra, has demanded that it become a semi-autonomous federal state despite Jakarta's proposal last week to return a significant proportion of oil profits to the province.

Dr Trabani Rab, the head of the Riau Cultural Institute, said the Riau people would still demand federation.

"The government is not serious about giving money to the provinces. Maybe they make the rules about profit-sharing but they're not serious about following the rules," said Dr Rab, referring to the revenue-sharing Bill last Friday which would return 15 per cent of oil profits to the provinces.

He was speaking after Monday's court case, where the Riau Cultural Institute is suing Indonesian President B. J. Habibie for failing to keep a promise he made in the middle of last year to return 10 per cent of oil profits made in the province. Dr Rab caused a stir last month when he declared Riau was a sovereign province.

The province has one of Indonesia's richest oil fields, producing more than 60 per cent of the nation's oil. Until now, however, it has only received 1 to 2 per cent of the profits from the Jakarta central government.

Mr Eko Wahu, from a Riau student group, threatened to take direct action unless Jakarta paid Riau province 10 per cent of the oil revenues. "We're counting on the honesty of the central government, otherwise we will destroy Pertamina in Dumai," he said.

He was referring to a student plan to occupy the harbour, blocking all oil exports unless they received a more honest evaluation of Riau's projected production from the Finance Minister. Pertamina, a state-owned Indonesian company, has been accused of corruption.

Mr Wahu accused the government of trying to trick the people of Riau into thinking they would receive huge revenues by overvaluing the oil to be produced in the next two years.

He said the Finance Minister and Pertamina have doubled the value of Riau's oil profits in a parliamentary report, estimating that the fields will make US$4.6 billion. But according to Caltex, annual profits were projected at US$2.2 billion annually, he said.

Riau student groups have demonstrated an increasing frustration with the slow response from the central government to their demands.

On Tuesday last week, 5,000 students demonstrated outside Caltex offices, some venting their anger on Caltex's housing complex by setting cars alight and stoning offices.

Three months ago the students staged a demonstration in the harbour, blocking all exports for four hours.

Caltex representative Renville Almatier said Caltex could not comment on whether the students' demands for a larger share of oil revenue was fair. "It is up to the government to decide that," he said.

Student groups are currently circulating questionnaires asking thousands of residents whether they wanted Riau to become a federated state, gain independence or join another country such as Singapore or Malaysia.

If there is a groundswell of support for independence or federation, student groups say they will demand a referendum to determine the province's future.

Dr Rab has also launched a criminal case against Pertamina, the Minister for Mines and Energy, and the Minister of Finance for corruption. The case would be used as a "gateway to opening up corruption in Pertamina", he said.

In the case, which will resume next week, he said either Pertamina or the Minister of Finance with the Minister of Mines and Energy had lied about profits and oil prices since the 70s in order to deprive the local government of funds.

Late last year, Corruption Watch, an independent organisation investigating company and government corruption, found that Pertamina had lost US$300 million since 1984 in its deals with one oil marketing company whose major shareholder is former Indonesian President Suharto's son, Tommy Suharto.

Corruption Watch found that the government failed to take action against Pertamina officials and 160 business partners that were involved in corrupt or nepotic business deals.

Dr Rab questioned why Riau province should be asked to contribute to Indonesia's huge foreign debt when the Jakarta government was so corrupt and only allocated about US$100 million of the state budget to the provinces.

Riau, like other resource-rich provinces such as Aceh, Irian Jaya and Kalimantan, has, for years, been frustrated with the central government's almost total control of its economy and government.

The new legislation, which allows for local elections, a return of 15 per cent of oil revenues, 30 per cent of gas revenues and 80 per cent of forestry and fishing revenues, is intended to ease these tensions but it will not come into force for another two years.

Dr Rab said the ordinary people in Riau were tired of waiting for the economic independence they deserved.

Riau's riches: it doesn't get to the people

Riau province has for years been frustrated with the central government's almost total control of its economy and government.

Jakarta has tried to quell the disquiet with a new legislation which allows for local elections, returns 15 per cent of oil revenues, 30 per cent of gas revenues and 80 per cent of forestry and fishing revenues. The snag is that this legislation will not come into force for another two years. The ordinary people are tired of waiting for economic independence.

• A quarter of Riau's 4.2 million residents live on less than the average annual income of 300,000 Rupiah.
• They see Jakarta using their province's earnings to pay off the country's huge foreign debt.
• The central government budgets only US$100 million for the provinces from the state budget.
• Oil giants Caltex and Pertamina have polluted the province and hurt the fishing industry.