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Pertamina denies link to Papua officer with 1 million liters

Jakarta Globe - June 7, 2013

Banjir Ambarita, Jayapura, Papua – State-owned energy company Pertamina says it does not know how a low-ranking police officer in Papua who is accused of fuel smuggling and illegal logging could have ended up with 1 million liters of subsidized fuel.

Muhammad Irfan, Pertamina's general manager for Papua and Maluku, said on Thursday that his office cut business ties with police officer Adj. First Insp. Labora Sitorus last year.

"We don't know from where he got [the fuel] from that was seized by police, because Pertamina stopped supplying [his company] in March 2012," Irfan said.

He said that a few months later, in October 2012, Pertamina dropped Labora's company Seno Adhi Wijaya as an authorized fuel distributor on account of poor performance. Whereas Pertamina wanted a target of 300 kiloliters per month a month, Seno Adhi Wijaya wanted that to be their annual target.

Labora, who was arrested last month, said the fuel seized from a boat and warehouse registered in his name was unsold stock from Pertamina. But a crewman on board the boat where 400,000 liters of fuel was found denied that. He said the fuel was obtained when the crew was ordered by Labora to siphon it from tankers out at sea.

The arrest and contraband grabbed headlines last month following information from the police that a report from the Financial Transaction Reports and Analysis Center (PPATK), the government's anti-money laundering agency, showed Rp 1.5 trillion ($154 million) in financial transactions passing through Labora's bank accounts between 2007 and 2012.

The officer has been charged with fuel smuggling and illegal logging, although he insisted that both businesses were legitimate and the money was his family's.

In addition to the 1 million liters of fuel, police also seized 115 containers of timber at Surabaya's Tanjung Perak Port, reportedly destined for export to China. The containers held 2,264 cubic meters of merbau, a rare and highly prized tropical hardwood that is illegal for export as rough-sawn timber.

Police say Labora obtained the wood through another company, Rotua, which bought it from local communities allowed to fell the trees in limited quantities for their own use.

While much of the attention in the case so far has been focused on Labora, sources in the police force say most of the money was being passed up the chain of command to senior officers, in exchange for being allowed to operate unhindered for years.

A source told the Jakarta Globe that officers called Labora "the cash machine" because he would fork out sums of up to Rp 300 million at a time.