Corruption charge levelled against Gusmao

Tom Allard Herald Correspondent in Jakarta
June 27, 2009
Mr Gusmao . . . blamed Fretilin for corruption.

Mr Gusmao . . . blamed Fretilin for corruption. Photo: Jason South

EAST TIMOR'S Prime Minister, Xanana Gusmao, is facing calls for his resignation amid allegations he personally approved a lucrative contract that benefited his daughter.

It is the latest in a series of corruption scandals to hit the country and, if the allegations are proven, could pose serious problems for Mr Gusmao, who has staked his reputation on cleaning up East Timor's bureaucracy and its tender system.

A spokeswoman for the Australian Department of Foreign Affairs and Trade said the Government took allegations of corruption seriously and was working closely with the East Timorese Government to increase accountability.

"The Australian aid program to East Timor is very carefully monitored and the aid program is subject to systematic internal and external audit to prevent and detect fraud," the spokeswoman said.

A protracted dispute over the corruption charge risks creating civil disorder in East Timor if supporters of the Fretilin opposition take to the streets to protest.

According to documents obtained by Fretilin, Mr Gusmao awarded a $US3.5 million ($4.4 million) contract for rice imports to Prima Foods, a company Fretilin says is partly owned by his daughter, Zenilda.

The contract was awarded under a $US45 million Government program to import basic foodstuffs.

"This is indicating very strongly that it's a collusion, nepotism and corruption," a Fretilin spokesman, Arsenio Bano, told the ABC. "How can a prime minister sign a multimillion-dollar contract with a company that his daughter is also a shareholder?"

Mr Gusmao should step aside, Mr Bano said.

The Prime Minister's office did not return calls yesterday but the President, Jose Ramos-Horta, declined to back his political ally, saying he would not intervene in the matter.

Mr Gusmao's Government has faced a steady stream of corruption allegations.

It awarded a $US400 million contract to a Chinese Government-owned company to build two power plants without calling for open tenders. Under the deal, East Timor will import expensive and highly polluting heavy oil, even though it is rich in natural gas.

The husband of the Justice Minister, Lucia Lobato, was reportedly awarded a lucrative contract to rebuild a prison and supply uniforms for guards. Ms Lobato, who is responsible for the prison system, is suing the journalist who broke the story.

There have also been allegations of dubious contracts awarded to build patrol boats and provide luxury cars to parliamentarians without an open tender.

Since taking office, Mr Gusmao has blamed Fretilin cadres installed in the bureaucracy for being behind rampant corruption. Last year he launched an anti-corruption drive, saying: "We need to take bold action and strong measures. This is not the time for small, incremental change."

Source: The Sydney Morning Herald

  • Timornewsline - http://www.timornewsline.com/


    Govt to versify BPA to another bank: Pires

    Timor Post , 26 June 2009- Summary by Alberico Junior
    Minister for Planning and Finance, Emilia Pires said The Timorese Authority Payment Bank (BPA) was now in diversification to the Petroleum Funds totally 20% that would be managed by the International Payment Bank (BPI).
  • Proposed anti-corruption is unconstitutional: Fretilin

    Timor Post , 26 June 2009- Summary by Alberico Junior
    Fretilin said the Government’s proposed anti-corruption law was unconstitutional, yet the Parliamentary Majority alliance (AMP) wanted to amend it, as the commission would be set up for combating corruption.
  • Only educated people could lead F-FDTL: Lere Anan Timur

    Timor Post , 26 June 2009- Summary by Alberico Junior
    The Timorese Defense Force Chief of Staffs, Colonel Lere Anan Timur said only civilized and educated people could better lead the country’s defense force onward.
  • Govt’s report does not reflect reality

    Timor Post , 26 June 2009- Summary by Alberico Junior
    A Timorese local NGO known as LUTAHAMUTUK said the Government recent report on the country’s state budget of 2008 did not reflect reality, because it had not followed actual execution of implementation.
  • Constitution weakens task of PDHJ

    Suara Timor Loro Sa’e , 26 June 2009- Summary by Alberico Junior
    Timorese Human Right and Justice Ombudsmen (PDHJ) Sebastião Ximenes said the PDHJ had not conducted its task optimally, because they were challenged by the constitution.
  • ISF and UN Police to strengthen security in the border

    Suara Timor Loro Sa’e , 26 June 2009- Summary by Alberico Junior
    Timorese Government has planned to coordinate with the International Stabilization Force (ISF) and the UN Police to involve them in the border to better provide security in that area, says State Secretary for security, Francisco Guterres.
  • Carrascalão calls for Oe-cusse people to pay attention to corruption

    Radio Televisaun Timor Leste , 26 June 2009- Summary by Alberico Junior
    Deputy Prime Minister for Management and Administration, Mario Viegas Carrascalão has called for Oe-cusse people to pay attention to corruption in that region and report him about any indication of corruption.
  • Nepotism allegation of employing international advisor is too political: Pires

    Radio Televisaun Timor Leste , 26 June 2009- Summary by Alberico Junior
    Minister for Planning and Finance, Emilia Pires said allegation case of nepotism in the recruitment of legal advisors at her ministry was a political maneuver.

25 June 2009 Upstream staff - Norwegian outfit Flex LNG is set to pick up gas assets in the Timor Sea under an option agreement to buy control of Jersey-based Minza Oil & Gas which holds 100% interest in licence JPDA 06-101(A).

The floating liquefied natural gas specialist said in a statement that the acreage, which includes the Chuditch-1 gas discovery that was drilled in 1998, could hold enough gas to support a FLNG project.

Licence JPDA 06-101(A) lies in the Joint Development Area between Timor-Leste and Australia in the Timor Sea.

Flex LNG said it will select one or more partners with suitable upstream experience to develop the acreage.

Company chief executive Philip Fjeld said the deal gave Flex LNG an attractive project close to the major Asian LNG demand centres.

"This project furthermore complements FLEX LNG's project portfolio and we will immediately start a selection process in order to secure a strong partner or partners to further develop the acreage towards a floating LNG project," he added.

Flex LNG, which was established in 2006 with the objective of commercialising the world's first floating liquefaction units (LNG producers), currently has four ships incorporating liquefaction units being built in South Korea.

http://easttimorlegal.blogspot.com

ABC News  http://www.abc.net.au/

Gusmao corruption scandal not my business: Ramos-Horta


Mr Ramos-Horta says it is not his business to intervene.

Mr Ramos-Horta says it is not his business to intervene. (Reuters: Dadang Tri, file photo)

East Timor's President Jose Ramos Horta has distanced himself from a scandal involving the country's Prime Minister.

Prime Minister Xanana Gusmao signed-off on a multi-million dollar Government contract to a company in which his daughter was a major shareholder.

The ABC can confirm Zenilda Gusmao is listed as a Prima Food shareholder in East Timor's 2008 business registry.

Last year, Prima Food won a Government contract to supply rice worth $US3.5 million ($4.3 million).

President Jose Ramos-Horta says it is not his business to intervene.

"In our political system, the President does not have executive authority. I cannot everyday interfere in the running of the country," he said.

"If that's what I want to do, I might as well run for Prime Minister. That is the responsibility of the Prime Minister."

The Prime Minister Xanana Gusmao is unavailable for comment.

ABC News http://www.abc.net.au

Gusmao faces corruption claims

By Steve Holland, Stephanie March for Radio Australia


The father of East Timorese independence, Xanana Gusmao, is at the centre of a new corruption scandal.

Prime Minister Gusmao signed-off on a multi-million dollar government contract to a company in which his daughter was a major shareholder.

An investigation by ABC's Radio Australia has found Prima Food last year won a government contract to supply rice worth $US3.5 million ($4.3 million).

Zenilda Gusmao, the prime minister's daughter, is listed as a Prima Food shareholder in East Timor's 2008 business registry.

Radio Australia has also confirmed that the wife of another senior minister has profited from government tenders.

The country's procurement law bans "agents of the administration", politicians and bureaucrats from awarding government contracts to businesses associated with close family members.

The deputy leader of the opposition Fretilin party, Arsenio Bano, alleges it is a blatant example of corruption in the Prime Minister's Office and called for the Prime Minister's resignation.

"It's absolutely a strong indication of corruption, he has violated Timor Law, and before it goes to the courts the prime minister should resign," Mr Bano said.

Mr Gusmao was unavailable for comment.

The Prime Minister's daughter, Zenilda Gusmao, declined to comment.

However, a spokeswoman for the government confirmed to Radio Australia that Zenilda Gusmao was a shareholder of Prima Food.

In a statement, the spokeswoman said: "The government has always been transparent on these contracts and went to enormous lengths to establish a fair and equitable environment for the private sector".

Mr Bano says he has approached the government on a regular basis since December last year, seeking information about companies linked to people related to ministers, but the government refused to supply the information.

"Even when we ask for a simple request, such as a request about how much rice is being transported into Timor ... they ignore Parliament," he said.

More government links

Zenilda Gusmao is not the only businesswoman in East Timor with a close relative in government.

Kathleen Goncalves, wife of East Timor's Minister of Economic Development, Joao Goncalves, is connected to at least three companies that have been awarded multi-million dollar government contracts approved by the Prime Minister.

Those three companies connected to Kathleen Goncalves: United Foods Lda, Belun Feto Lda (both listed under Kathleen Goncalves' Chinese name, Fon Ha Tchong) and Tres Amigos were last year awarded more than $US11 million worth of government contracts.

Mrs Goncalves declined an invitation to be interviewed, but in a statement a spokeswoman for the East Timorese government defended her involvement.

"She (Kathleen Goncalves) has been in business in Timor since 1999 importing rice and was an authorised vendor for previous governments [sic], including the Fretilin Government and the Gusmao Government," the statement said.

Joao Goncalves says he did not know the names of his wife's companies or which ones had secured multi-million dollar government contracts.

The companies connected to Kathleen Goncalves, along with Prima Food, are listed on a government list of 16 businesses that last year secured government rice contracts worth $US56 million.

That money came from the country's Economic Stabilisation Fund and was distributed as part of food security measures aimed at ensuring the population had sufficient rice supplies.

Mr Gusmao played a key role in his country's 25-year struggle for independence from Indonesia.

He became East Timor's first president in 2002 and was elected Prime Minister in 2007.

  • Timornewsline- http://www.timornewsline.com/


    Heavy oil power project to commence

    Timor Post , 25 June 2009- Summary by Alberico Junior
    State Secretary for Electricity, Urbanization and water Supply, Januario Pereira said the Government would start implementing heavy oil power project in the country.
  • Halting case of 1974 – 1999 breaches constitution

    Timor Post , 25 June 2009- Summary by Alberico Junior
    The Judicial System Monitoring program (JMP) has declared that President Jose Ramos Horta’s plan to halt serious crime committed in the 1974 -1999 is against the Timorese Constitution.
  • PNTL implements discipline based on law

    Timor Post , 25 June 2009- Summary by Alberico Junior
    Timorese Deputy Police Commander, Sub Commissary Afonso de Jesus said the Timorese National Police was slowly implementing discipline based on the police force’s internal law.
  • Should not be depending only on PNTL: De Jesus

    Timor Post , 25 June 2009- Summary by Alberico Junior
    Timorese Deputy Police Commander, Sub Commissary Afonso de Jesus said in restoring stability in the country, people should not only depend on the Timorese National Police (PNTL), yet contribution from component of the country was necessary.
  • GTZ opens market in Kovalima district

    Timor Post , 25 June 2009- Summary by Alberico Junior
    Administrator for Tilomar sub district, João Amaral expressed thanks to the German GTZ for its funding support to build a traditional market in the village Lalawa.
  • Akatiri does not know Fretilin’s ideology: CPD-RDTL coordinator

    Suara Timor Loro Sa’e , 25 June 2009- Summary by Alberico Junior
    Coordinator General for the CPD-RDTL [a Timorese Resistance Organization], Atonio Aitahan Matak said Fretilin Secretary General did no know ideology of the Fretilin.
  • MP should not talk recklessly: Pinto

    Suara Timor Loro Sa’e , 25 June 2009- Summary by Alberico Junior
    State secretary for Defense, Julio Thomas Pinto has called on the Parliamentary members not talking recklessly without having factual information.
  • Fretilin to emend law of setting ANP

    Timor Post , 25 June 2009- Summary by Alberico Junior
    Following the decision made by the Court of Appeal that the decree law of setting up the country’s national authority petroleum is constitutional and does not breach the constitution, yet Fretilin says they would emend the law if they would be in power again.

AP Interview: E. Timor president hopes undersea pipeline will go to his country

Frank Jordans

June 24th, 2009


E. Timor president hopes for decision on pipeline

GENEVA — East Timor’s president said Wednesday venture partners in a vast underwater oil and gas field would be better served if they choose to lay a deep sea pipeline to his country instead of Australia.


President Jose Ramos-Horta said he hopes agreement on where to pump oil and gas from the Greater Sunrise field will be reached by the end of the year.

“We are closer to the market, which is China and Japan and so on, and our tax regime is far simpler and generous than Australia’s,” he told The Associated Press in an interview.

“I believe it should come to Timor Leste in the interest of the investors and the interest of the two countries,” Ramos-Horta said, using his country’s official name.

Greater Sunrise is estimated to contain about 300 million barrels of light oil and 8.3 trillion cubic feet of natural gas worth around $90 billion. It lies closer to East Timor’s shores but with a deep trench known as the Timor Trough in the way.

“Technology today allows for deep water pipelines,” Ramos-Horta said. “Technology-wise there is no problem. Cost-wise in bringing the pipeline to Timor-Leste or Australia, it’s still to be decided.”

Australia and its largest oil company, Woodside Petroleum Ltd., have argued it would be cheaper and safer to build a pipeline to Darwin in northern Australia.

Australian officials couldn’t immediately be reached for comment late Wednesday.

But Woodside has said in the past that the venture partners would consider the results of an independent study commissioned by East Timor.

Excess oil and gas from Greater Sunrise and other fields in the region would be sold to generate revenue for East Timor, Ramos-Horta said.

The Southeast Asian country, which only gained independence from Indonesia in 2002, already earns some $100 million from oil and gas exports each month, and has built up foreign currency reserves of almost $5 billion while having almost no debt, he said.

Some of that money could be invested into other forms of energy production such as solar and wind power as part of an ambitious plan to become energy independent and contribute to efforts to reduce climate change.

Speaking on the sidelines of an event on climate change organized by Kofi Annan’s Global Humanitarian Forum, Ramos-Horta said it was up to countries like East Timor to take matters into their own hands rather than wait for rich polluters to help.

“Do not have any illusions that the rich are going to help you mitigate the impact of climate change,” he said.

East Timor: Putting self-determination into practice

Mericio Juvinal dos Reis at the World at a Crossroads conference. Photo by Alex Bainbridge.

June 19, 2009 -- Mericio Juvinal dos Reis, or Akara as he is commonly known, is the executive director of Luta Hamutuk, a non-government organisation based in Dili, East Timor. Akara was a featured guest at the World at a Crossroads conference, hosted by Green Left Weekly, held in Sydney in April 2009. Vannessa Hearman spoke with Akara about East TImor’s ongoing struggle for genuine self-determination and development.

* * *

East Timor won its independence formally in 2002, after a long and bloody struggle against Indonesian occupation from 1975 to 1999. In 1999, a United Nations-sponsored referendum was held, in which the Timorese people voted to be independent from Indonesia.

Luta Hamutuk was set up in 2005 by a group of young activists, including Akara. Akara had been involved in pro-independence activities as a student in Indonesia. He was a member of the Timorese Socialist Party but left in 2003.

Akara told GLW: “Luta Hamutuk is an advocacy and monitoring organisation. We focus some of our activities on the Petroleum Fund, which is a fund the Timorese government set up in order to set aside proceeds from the Timor Sea oil and gas resources.”

Oil and gas revenue

East Timor is highly dependent on revenue from the Timor Sea oil and gas reserves.

“We do public education campaigns about the natural resources that East Timor has, why it is important that the proceeds are safeguarded for future generations”, Akara said. He said East Timor had “to ensure we have economic self-sufficiency and not be dependent on foreign debt to build our country.”

Akara explained: “We also campaign about how the government should use natural resources, that the government should be accountable, manage this wealth to fulfil the needs of the people and that the government must really fight for people's interests.

“Development should be based on what people want and need. That was what we fought for in the independence struggle and what the slogan of our struggle, ukun rasik an (determining our own future) was all about.”

Luta Hamutuk has urged the government to invest in human resources, recognising that after decades of war and occupation, the country's chief barrier has been the lack of education and skills. This has been used to justify the plethora of foreign technical advisors provided by donors to the Timorese government.

“Investment in infrastructure is also important”, Akara said. “Public transport, bridges, roads have to be improved. Education and health are also important priorities.”

Akara said that the former Fretilin government was conscious of not wasting Petroleum Fund money. Fretilin enjoyed a parliamentary majority from 2001-2007. However, a crisis that involved a rebellion of sections of the military resulted in the resignation of Fretilin prime minister Mari Alkatiri. Elections were held in 2007 and Fretilin’s parliamentary majority was slashed to only 29%, or 21, seats in parliament.

“It is very important that the Fund is used responsibly, so that we don’t exhaust the money. The present government [headed by Prime Minister Xanana Gusmao] is spending a lot of money but without a clear plan.

“We need real investment in the social and economic sectors, not just distributing money right left and centre simply to buy their way out of problems.”

Dependency

Akara said: “We are very concerned that the government is sowing the seeds for dependency. Instead of developing the economy and society and thereby transforming the lives of people, they are creating a society of people who think that problems are resolved by throwing money around.

“This runs contrary to our principle of ukun rasik an. We are also concerned that the government is declaring tax exemptions, for example on all imports. It is true that the taxation system needs to be reorganised, but not by declaring tax exemptions on foreign companies imports a lot of goods.

“How is the country going to have diversified revenue base, beyond the Petroleum Fund, if it does not develop an adequate taxation system?

“By not putting in place a clear and transparent taxation system, the people also do not develop awareness about their obligations to the state, how state functions are to be funded. They are also denied their rights as citizens to enjoy the fruits from that revenue collected as taxation.

“This is a dangerous situation for this government to create for future governments and Timor’s development.”

 Akara said the government was also interested in getting more out of the Petroleum Fund than was permissible under the law. Under the fund’s rules, the government can only withdraw 3% for the national budget annually.

“In our view, 3% is quite large for national development. This represents a figure of about US$400 million. This is sufficient for national development. More than this exceeds the government’s execution capacity.

“In the past, no more than $200-300 million was able to be spent. So where would this money go? It is just a political stunt. The parliament is very weak, whatever the government says, parliament agrees to.”

Through his work with Luta Hamutuk, Akara has contact with Fretilin members in parliament and at the grassroots in the villages.

He said: “At the parliamentary level, Fretilin MPs are quite critical of the government. But it is not strong enough in parliament. Fretilin does not organise or mobilise outside parliament. There is no extra parliamentary action. This is its chief weakness.

“It is supposedly a mass progressive party, but it does not organise outside of parliament. It’s natural that people then question the strength and principles of Fretilin.

“At the base, Fretilin is still strong, but this is hard to see because of Fretilin’s lack of organisation of its mass base.”

Akara said that there was significant discontent with the government. “The mass of people are ready to protest and many hope that Fretilin could initiate street protests.

“They realise there is a myriad of issues, the wastage of the budget, non-transparent management; corruption, collusion and nepotism are very strong right now.

“Why are Xanana’s cronies and family being awarded many projects, even though their companies haven’t had a lot of experience in areas like road building? People know about these kinds of incidents, but there is no one to organise or lead such protest movements.”

In response, Luta Hamutuk holds public debates and workshops about politics, government and the economy. Akara said that since its inception, the government has banned street protests.

“This started with the state of emergency in 2006 and has continued. But we march when the space allows. We commemorate May Day, or protest against the US detention of the Cuban Five. We hold open forums to express criticisms, we call it the Freedom of Expression Podium. We use this podium to have international guests speak, to play films on Cuba, Che Guevara, anti-globalisation, environmental issues.

“Because the area is small, and we prefer not to deal with police harassment, we wouldn’t have more than 100-150 people gathered at any one time.”

Grassroots assistance

Luta Hamutuk activists also assist people from across the country in lodging grievances with the government, for instance over problems with roads, health clinics or schools. They demand meetings with state representatives, and draw up petitions and statements

“Our network in rural areas comprises eight districts.” There are 13 districts all up, including Dili. We have organisers in each subdistrict and a committee monitoring things like the implementation of government projects and the allocation of the national budget in each regional area.”

Through this work, Akara said, the organisation has been brought into contact with Fretilin militants. “The people who sit on these committees are local leaders, subdistrict heads etc. Most of these people are Fretilin. “So we work closely with Fretilin, at least those at the grassroots level, through these committees.”

Luta Hamutuk’s work is not always welcomed by those they criticise. “Sometimes we get threats from bureaucrats, companies, who say they’ll take us to court, or they give us warnings. We don’t care, we see ourselves as fighting alongside the people.”

Akara also questioned the presence of the Australian military in East Timor. “What are they supposed to be doing? They just sleep, eat, run on the beach, they bring all their heavy weaponry. What for? Where is the war? There is no longer any displaced people’s camp. So what are they safeguarding?”

Akaka said their role is to safeguard Australia’s interests. He said Xanana’s government welcomes the continuing presence of this military, because “it still feels unable to trust the police, the army and its own people, so it’s like having another army in reserve to defend the government”.

[This article first appeared in Green Left Weekly, issue #799, June 24, 2009.]


Relief as last refugee camp closes

METINARO, Timor Leste : Refugees and a priest have expressed relief that the last camp for refugees who fled political violence in the country three years ago is now closing.

On June 17, the government began to close the Metinaro camp on the outskirts of Dili after political tension in April 2006 drove more than 100,000 people from their homes.

Metinaro is the last of 65 camps in Dili. The refugees here have agreed to return to their villages after each family received US$4,500 from the government to help them rebuild their homes.

The return of many of Timor Leste's displaced people had been delayed by land disputes and renewed fears of violence.

President Jose Ramos-Horta has apologized to refugees and said the 2006 crisis was the fault of the country's political leaders. He said it was only fair the refugees be compensated for what they had lost.

The parish priest of Dili's Cathedral Maria Imaculada da Conceicao, Father Angelo Sansinha, said the decision to close the camp demonstrates the government's commitment to solving the country's refugee problems.

"The government has shown moral responsibility to its people," he said. "Within three years, the government has managed to close 65 refugee camps in Dili, it is a big step toward the development of the country."

He said he hopes the returning refugees would be able to live in harmony with their neighbors and that past differences can be set aside in order to build a better future together.

Communal violence erupted in Timor Leste in April 2006 in the wake of the dismissal of more than one third of Timor Leste's army. The dismissed soldiers, from the western part of the country, had alleged discrimination. The easterners, it is claimed, were the backbone of the resistance against Indonesian rule during the 1980s and 1990s.

The tensions degenerated into clashes between groups claiming to represent Easterners and Westerners. Those displaced people took refuge in the camps, many of which were set up in Catholic churches and centers.

Casmiro dos Santos is one refugee who has been waiting to return home. He fled with his family from the Surikmas area of Dili to Metinaro because his house was burned down. "We have been suffering ... now we can see our neighbors again," he said.

Pedro Soares, 39, one of dos Santos' neighbors, said he was happy to see him home again. Soares said he hopes the country's leaders will work toward a brighter future for the nation.

Terezinha da Costa, 32, and her family also spent three years in Metinaro, where she says she encountered many problems. Now she says she is experiencing a new found sense of freedom.

"I was always afraid of going home because I wasn't sure if my neighbors would accept us or not, but now I'm more than happy because I was wrong. They've welcomed us all back," she told UCA News.

Timor Leste has a population of about 1 million, more than 90 percent of whom are Catholics. Although the former Portuguese colony has significant offshore oil and gas reserves, it faces major security, humanitarian and economic challenges, including an unemployment rate of 50 percent.

Courtesy : UCAN