Indonesia's Corruption Eradication Commission to investigate Monsanto (10/1/2005)

KPK to investigate Monsanto bribery case
Muninggar Sri Saraswati, The Jakarta Post, Jakarta
10 January, 2005

JAKARTA: The Corruption Eradication Commission (KPK) said it was ready to investigate a bribery case involving U.S.-based Monsanto Co., one of the world's leading developers of genetically modified crops.

Erry Riyana Hardjapamekas, the KPK deputy chairman, said on Saturday that the commission is scheduled to meet lawyers representing Monsanto soon.

"They have promised to cooperate," he said, referring to a meeting between KPK and Monsanto's lawyers last year.

According to Erry, his commission had sent official letters to the United States Securities and Exchange Commission as well as the Department of Justice, via the U.S. Embassy in Indonesia, but there had not yet been a response.

The commission will focus on the bribery case, which allegedly involved a significant number of senior officials with the Office of the State Minister for Environment and the agriculture ministry here, he added.

Monsanto, which was charged with violating the U.S. Foreign Corrupt Practices Act, has agreed to pay a US$1 million penalty to settle charges of bribing Indonesian government officials.

According to the website of the U.S. Securities and Exchange Commission, the bribery case started in 1998 when Monsanto wanted Indonesia to accept genetically-modified (GM) crops.

It hired a Jakarta-based investment consulting firm to lobby for legislation and ministerial decrees favorable to the development of GM crops here.

"In February of 2001, Monsanto obtained limited approval from Indonesia's Ministry of Agriculture, for farmers in South Sulawesi, Indonesia, to grow its Bollgard Cotton, a GM crop," the website said.

But later in the year, the environment ministry issued a decree requiring environmental impact assessment prior to the cultivation of the Monsanto's Bollgard Cotton in this country.

As the decree was likely to have an adverse effect on Monsanto's business interests in Indonesia, Monsanto lobbied the environment ministry to withdraw the decree. People from Monsanto met with a senior environment ministry official on several occasions.

Sometime in February 2002, an employee of the consulting firm which represented Monsanto visited the senior official at his home and gave him an envelope containing $50,000 in $100 bills.

Despite the cash payment, the senior official never repealed the AMDAL requirement for Monsanto's products.

The website also disclosed that from 1997 to 2002, Monsanto made at least $700,000 in illicit payments to at least 140 current and former Indonesian government officials and their family members.

The largest single set of payments was for the purchase of land and the design and construction of a house in the name of a wife of a senior Ministry of Agriculture official, which cost Monsanto $373,990.

Other improper payments included, among others, payments to a senior official of Budget Allocations at the National Planning and Development Agency (Bappenas), totaling $86,690, and payments to other Ministry of Agriculture officials, totaling $8,100.

Officials of the South Sulawesi office of the agriculture ministry also received approximately $29,500 from Monsanto.

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