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THIRD WORLD NETWORK BIOSAFETY INFORMATION SERVICE 27 January 2005 Dear Friends and colleagues, RE: MONSANTO IN BRIBERY CHARGES Monsanto, the giant agrochemical company, has been charged for violating the US Foreign Corrupt Practices Act. According to a criminal complaint by the Department of Justice and the US Securities and Exchange Commission (see Item 1), an employee of the consulting firm which represented Monsanto paid $50,000 to a senior Indonesian environmental official in 2002, in an unsuccessful bid to amend or repeal the requirement for the environmental impact statement for new crop varieties. The complaint also stated that over $700,000 in bribes were paid to at least 140 current and former Indonesian government officials and their family members between 1997 and 2002, financed through its improper accounting of its pesticides sales in Indonesia. According to Nature magazine (Item 2), Monsanto is to pay $1.5m in penalties to the US government over bribes paid to Indonesian authorities in a bid to bypass controls on the screening of new genetically modified cotton crops. Meanwhile, NGOs have called upon the Indonesian Corruption Eradication Commission (KPK) to look into the bribery cases citing the information provided by the US Department of Justice and the Securities and Exchange Commission. Representatives from a leading NGO, KONPHALINDO, have met with the KPK on this matter. With best wishes, Lim Li
Lin and Chee Yoke Heong REF: Doc.TWN/Biosafety/2005/I Item 1 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA UNITED STATES SECURITIES AND EXCHANGE COMMISSION, 450 Fifth Street, N.W. Washington, DC 20549 Plaintiff, Civ. Act. No. __-____ v. MONSANTO COMPANY, 800 North Lindbergh Boulevard St. Louis, MO 63167 Defendant. COMPLAINT Plaintiff United States Securities and Exchange Commission (the "Commission") alleges for its Complaint against Defendant Monsanto Company ("Monsanto") as follows: SUMMARY 1. In 2002, a senior Monsanto manager (the "Senior Monsanto Manager"), who was responsible for certain activities in the Asia Pacific region, authorized and directed an Indonesian consulting firm to make an illegal payment totaling $50,000 to a senior Indonesian Ministry of Environment official ("the Senior Environment Official"). This bribe was made to influence the Senior Environment Official to repeal an unfavorable decree that was likely to have an adverse effect on Monsanto's business. Although the payment was made, the unfavorable decree was not repealed. 2. In addition, from 1997 to 2002, Monsanto inaccurately recorded, or failed to record, in its books and records approximately $700,000 of illegal or questionable payments made to various Indonesian government officials. The approximate $700,000 was derived from a bogus product registration scheme undertaken by the Indonesian affiliates. In certain instances, entries were made in the books and records of the Indonesian affiliates that concealed the source, use and true nature of these payments, violating Monsanto's accounting policies, controls, and procedures 3. By reason of the conduct described herein, Defendant Monsanto violated Sections 13(b)(2)(A), 13(b)(2)(B), 13(b)(5), and 30A(a) of the Securities Exchange Act of 1934 [15 U.S.C. §§ 78m(b)(2)(A), 78m(b)(2)(B), 78m(b)(5) and 78dd-1] ("Exchange Act") and Rule 13b2-1 [17 C.F.R. § 240.13b2-1] thereunder. JURISDICTION 4. This Court has jurisdiction over this action pursuant to Exchange Act Sections 21(d)(3), 27, and 32 [15 U.S.C. §§ 78u(d)(3), 78aa, 78ff]. In connection with the conduct described herein, the Defendant Monsanto, directly or indirectly, made us of the means and instrumentalities of interstate commerce, or the mails in furtherance of the acts, practices, and courses of business alleged in this Complaint. 5. Certain of the acts, practices, and courses of business alleged in this Complaint occurred within this judicial district, and, therefore, venue is proper pursuant to Section 27 of the Exchange Act. DEFENDANT 6. Defendant Monsanto is a Delaware corporation based in St. Louis, Missouri and a global producer of technology-based solutions and agricultural products for growers and downstream customers in agricultural markets in the United States and abroad. Monsanto's common stock is registered with the Commission pursuant to Exchange Act Section 12(b) and is listed on the New York Stock Exchange. FACTS 7. In addition to its pesticide business, Monsanto develops and produces various genetically-modified organisms ("GMOs"). GMOs are promoted as being better than conventional crops because they resist disease and pestilence, and produce higher yields. Monsanto wanted to increase acceptance of GMO crops in Indonesia. To do so, in 1998 Monsanto retained a Jakarta-based investment consulting firm ("Consulting Firm") that represented U.S. companies in Indonesia. 8. The Consulting Firm employed a United States national ("the Consulting Firm Employee") and assigned him to lead Monsanto's account. The Consulting Firm Employee worked closely with the management team of the Indonesian affiliates and the Senior Monsanto Manager who was responsible for certain activities in the Asia Pacific region. The Senior Monsanto Manager is a citizen of, and was based in, the United States. 9. On behalf of Monsanto, the Senior Monsanto Manager, management of the Indonesian affiliates, and the Consulting Firm Employee lobbied for Indonesian legislation and ministerial decrees favorable to GMO crops. Thereafter, in February of 2001, Monsanto obtained limited approval from Indonesia's Ministry of Agriculture, for farmers in South Sulawesi, Indonesia to grow Monsanto's Bollgard Cotton, a GMO crop. 10. Later in 2001, the Ministry of Environment issued a decree amending Indonesia's longstanding law requiring an environmental impact assessment ("AMDAL") as a condition for approval for certain projects. The AMDAL decree required, for the first time, certain agricultural products, such as Monsanto's Bollgard Cotton, to undergo an environmental impact assessment prior to cultivation within Indonesia. The decree was likely to have an adverse effect on Monsanto's business interests in Indonesia. Thus, through its Indonesian affiliates and the Consulting Firm, Monsanto lobbied for repeal of the decree. A. Payment to the Senior Environment Official In Violation of the Foreign Corrupt Practices Act ("FCPA") 11. Due to a change in administration, in August of 2001, new Ministry of Environment officials were appointed. Monsanto focused its lobbying efforts on the repeal of the AMDAL decree and met on multiple occasions with the Senior Environment Official. Near the end of 2001, when it became clear that the lobbying efforts were having no effect on the Senior Environment Official, the Senior Monsanto Manager told the Consulting Firm Employee to "incentivize" the Senior Environment Official with a cash payment of $50,000. 12. The Consulting Firm Employee discussed the payment with the Senior Environment Official and, while the Senior Environment Official did not promise to repeal the AMDAL amendment, the Senior Environment Official indicated to the Consulting Firm Employee that he would try to cause the amendment to be repealed. 13. In order to fund and to conceal the $50,000 payment, the Senior Monsanto Manager devised a scheme involving false invoices from the Consulting Firm that were submitted to Monsanto. The Senior Monsanto Manager sent several e-mails, processed on a server located in the United States, to the Consulting Firm Employee and spoke to him in person regarding the scheme. During the planning of the payment to the Senior Environment Official, the Senior Monsanto Manager told the Consulting Firm Employee not to discuss the payment with any other employee of Monsanto. 14. As part of the scheme, the Senior Monsanto Manager instructed the Consulting Firm Employee to make the false invoices total $66,000, so that the amount paid by Monsanto would include the amount necessary to cover the tax consequences of the Consulting Firm reporting Monsanto's payment as consulting fee income. The Senior Monsanto Manager instructed the Consulting Firm Employee to draft several invoices, detailing hours that the Consulting Firm Employee spent traveling on two trips to the United States; in December of 2001 he accompanied the Minister of Environment to St. Louis, in January 2002 he was to accompany the Minister of Agriculture to St. Louis. The false invoices were submitted to Monsanto in the United States on December 20, 2001, several weeks before the second trip occurred. 15. Despite Monsanto's retainer arrangement with the Consulting Firm, the invoices included detailed charges for hours allegedly expended by the Consulting Firm Employee. The invoices were different from the Consulting Firm's previous invoices because the amount charged was based on the hours allegedly spent on the trips whereas normally the Consulting Firm only billed the standard retainer amount plus any expenses. The improper invoices also included charges for hours of other Consulting Firm employees who did not travel to the United States. The breakdown accompanying the invoices made it appear as though other Consulting Firm employees also traveled to the United States. Despite the obvious irregularities in the invoices, the Senior Monsanto Manager approved the false invoices and convinced other Monsanto managers to approve the false invoices for payment. 16. In order for the Consulting Firm Employee to withdraw $50,000 from the Consulting Firm's Indonesian bank account, he needed the approval of the president of the Consulting Firm. During the time that the Consulting Firm Employee was having discussions with the Senior Monsanto Manager and the Senior Environment Official, he spoke to the Consulting Firm's president, informed the president of the plan to bribe the Senior Environment Official, and gave the president periodic updates. The Consulting Firm's president then authorized the Firm's accounting department to release $50,000 in U.S. currency to the Consulting Firm Employee. 17. On or about February 5, 2002, the Consulting Firm Employee visited the Senior Environment Official at his home. The Consulting Firm Employee briefly spoke with the Senior Environment Official, informed the Senior Environment Official that he had the money, and then gave an envelope containing $50,000 in one hundred dollar bills to the Senior Environment Official. After the meeting, the Consulting Firm Employee separately reported back to both the Senior Monsanto Manager and the Consulting Firm's president and informed each that he had given the money to the Senior Environment Official. In early March, the Consulting Firm received payment on the false invoices submitted to Monsanto to fund and conceal the bribe. However, despite the cash payment, the Senior Environment Official never repealed the AMDAL requirement for Monsanto's products. B. Other Payments Violative of the FCPA 18. Monsanto first became aware of possible financial irregularities within its Indonesian affiliates in March of 2001. Monsanto began an internal investigation, which continued at the direction of the Board of Directors. As a result of the investigation, Monsanto notified the Commission of books and records and compliance irregularities involving Monsanto's Indonesian affiliates. While Monsanto's investigation uncovered numerous questionable payments, which Monsanto disclosed to the Commission, it did not uncover the payment to the Senior Environment Official described above. 19. The Indonesian affiliates established more than twenty nominee companies in Indonesia without the knowledge of Monsanto. Several of these nominees were purportedly established to hold pesticide product registrations on Monsanto's behalf in exchange for a fee. During the review period, the Indonesian affiliates paid false product registration fees totaling approximately $787,202 to at least two nominee companies established by the Indonesian affiliates. The false registration fees, which were based on a percentage of sales of certain products, were paid to the two nominee companies despite the fact that other companies held the product registrations on Monsanto's behalf. The legitimate holders of the product registrations did not charge Monsanto any such fees. 20. The Indonesian affiliates used the nominees to inflate sales of Monsanto's pesticide products between the Indonesian affiliates and the nominees. This was done through a scheme of over-invoicing, in most cases, and by "ghost" sales, in other cases. The management team for Monsanto's Indonesian affiliates then siphoned monies from these unauthorized and improperly documented sales to, in part, finance payments to Indonesian government officials. 21. From 1997 to 2002, Monsanto's Indonesian affiliates made at least $700,000 of 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 the wife of a senior Ministry of Agriculture official. The total amount of improper payments made in 1998 and 1999 for the house and land was the rupiah equivalent of $373,990. Other examples of improper payments include, among others, payments to a senior official of Budget Allocation at the National Planning and Development Board, totaling $86,690, and payments to other Ministry of Agriculture officials, totaling $8,100. Other payments for travel and gifts (such as cellular phones and golf memberships) were also made by the Indonesian affiliates on behalf of various Indonesian government officials. 22. In addition, questionable payments were made concerning a cotton gin in South Sulawesi, Indonesia. In connection with the Sulawesi project, one of Monsanto's Indonesian affiliates, PTBS, entered into a ginning contract with an affiliate of the Consulting Firm. Under the ginning contract, PTBS paid the affiliate of the Consulting Firm to gin the cotton grown in South Sulawesi using cotton gins "rented" from the Indonesian Government. The Indonesian affiliates also paid fees of $129,500 to two different Indonesian consulting firms to gain control of the gin. At the same time, PTBS paid $1,000 per month to the Indonesian Plantation Agency, which owned the gin that milled the cotton. Lastly, PTBS had instituted a program wherein PTBS paid local South Sulawesi Department of Agriculture officials a certain percentage of each kilogram of cotton fruit produced. Payments of approximately $29,500 were made to various officials under this payment scheme. C. Books and Records Violations 23. Monsanto's Indonesian affiliates failed to properly account for the illicit payments. Instead, members of the Indonesian management team used a complex scheme of bogus pesticide product registration fees and over-invoicing to finance off-book slush funds. These off-book accounts were the source for reimbursements to employees of the Indonesian affiliates for numerous improper payments made to Indonesian officials. These improper payments were inaccurately recorded by both the Indonesian affiliates and Monsanto as payments for bona fide services or bona fide product sales. The improper payments were then reflected in Monsanto's consolidated financial statements as payments for bona fide services or bona fide product sales. D. Internal Controls Violations 24. During the review period, Monsanto lacked internal controls sufficient to detect or prevent the illicit payment schemes operated by the Indonesian affiliates. In fact, from 1996 to 2001 Monsanto did not conduct any internal audits of its Indonesian affiliates, nor were statutory audits conducted, which were required of PTBS under Indonesian law. Instead, Monsanto assumed the financial statement information it received from its Indonesian affiliates was accurate. Despite the statements being unaudited, Monsanto management did not require the Indonesian affiliates to substantiate the information in the financial statements. The absence of effective internal controls enabled the Indonesian management team to conceal their illicit payment schemes. FIRST CLAIM Violation of Section 30A(a) of the Exchange Act [15 U.S.C. §78dd-1] 25. Paragraphs 1 through 24 are realleged and incorporated by reference. 26. As described above, Monsanto knowingly and corruptly authorized the making and made a payment of $50,000 to a foreign official for the purposes of influencing an act or decision of such foreign government official in his official capacity in order to assist Monsanto in obtaining or retaining business in violation of the anti-bribery provision of the FCPA in Section 30A(a) of the Exchange Act [15 U.S.C. § 78dd-1]. SECOND CLAIM Violations of Section 13(b)(2)(A) of the Exchange Act [15 U.S.C. § 78m(b)(2)(A)] 27. Paragraphs 1 through 26 are realleged and incorporated by reference. 28. As a result of the above-described conduct, with respect to improper payments to foreign officials and others, Monsanto failed to make and keep books and records which, in reasonable detail, accurately and fairly reflected Monsanto's transactions and dispositions of its assets. 29. By reason of the foregoing, Monsanto violated the books-and-records provisions of the Exchange Act, Section 13(b)(2)(A) [15 U.S.C. § 78m(b)(2)(A)]. THIRD CLAIM Violations of Section 13(b)(2)(B) of the Exchange Act [15 U.S.C. § 78m(b)(2)(B)] 30. Paragraphs 1 through 29 are realleged and incorporated by reference. 31. As a result of the above-described conduct, with respect to improper payments to a foreign official and others, Monsanto failed to devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances that: (i) transactions were executed in accordance with management's general or specific authorization; and (ii) transactions were recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles or any other criteria applicable to such statements, and to maintain accountability for its assets. 32. By reason of the foregoing, Monsanto violated the internal control provisions of the Exchange Act, Section 13(b)(2)(B) [15 U.S.C. § 78m(b)(2)(B)]. FOURTH CLAIM Violations of Section 13(b)(5) of the Exchange Act [15 U.S.C. § 78m(b)(5)] 33. Paragraphs 1 through 32 are realleged and incorporated by reference. 34. As described above, with respect to improper payments to a foreign official and others, Monsanto knowingly circumvented or knowingly failed to implement a system of internal accounting controls or knowingly falsified any book, record, or account described in Exchange Act Section 13(b)(2)(A) [15 U.S.C. § 78m(b)(2)(A)]. 35. By reason of the foregoing, Monsanto violated Exchange Act Section 13(b)(5) [15 U.S.C. § 78m(b)(5)]. FIFTH CLAIM Violations of Exchange Act Rule 13b2-1 [17 C.F.R. § 240.13b2-1] 36. Paragraphs 1 through 35 are realleged and incorporated by reference. 37. As described above, Monsanto with respect to improper payments to a foreign official and others, Monsanto, directly or indirectly, falsified or caused to be falsified, any book, record or account subject to Exchange Act Section 13(b)(2)(A) [15 U.S.C. § 78m(b)(2)(A)]. 38. By reason of the foregoing, Monsanto violated Exchange Act Rule 13b2-1 [17 C.F.R. § 240-13b2-1]. PRAYER FOR RELIEF WHEREFORE, the Commission respectfully requests that this Court enter a final judgment against Monsanto that: 1. Orders Monsanto to pay a civil money penalty in the amount of $500,000 pursuant to Exchange Act Sections 21(d)(3) [15 U.S.C. § 78u(d)(3)] and 32(c) [15 U.S.C. § 78ff(c)(1)(B)]; and 2. Grants such other and further relief as is just and proper. Dated: January ___, 2005 Respectfully submitted, _________________________________________ Arthur S. Lowry (DC Bar #421266) Margaret S. McGuire Attorneys for Plaintiff United States Securities and Exchange Commission 450 Fifth Street, N.W. Washington, DC 20549-0911 Phone: (202) 942-4868 (Lowry) Fax: (202) 942-9581 (Lowry) Of Counsel: Paul R. Berger Richard W. Grime Attorneys for Plaintiff United States Securities and Exchange Commission 450 Fifth Street, N.W. Washington, DC 20549-0911 Item 2 Monsanto fined $1.5m over Indonesia bribes By Jonathan Birchall in New York, Nature Published: January 6 2005 Monsanto, the agrochemical company, is to pay $1.5m in penalties to the US government over a bribe paid in Indonesia in a bid to bypass controls on the screening of new genetically modified cotton crops. According to a criminal complaint by the Department of Justice on Thursday under US anti-bribery laws, the company paid $50,000 to an unamed senior Indonesian environmental official in 2002, in an unsuccesful bid to amend or repeal the requirement for the environmental impact statement for new crop varieties. The cash payment was delivered by a consultant working for the company's Indonesian affiliate, but was approved by a senior Monsanto official based in the US, and disguised as consultants fees. The company also admitted that it had paid over $700,000 in bribes to various officials in Indonesia between 1997 and 2002, financed through improper accounting of its pesticide sales in Indonesia. As part of the agreement with the DoJ and the Securities and Exchange Commission, Monsanto has also pledged to appoint independent consultants to review its business practices over a three year period, when the criminal charges against it would be dropped permanently by the DoJ. Christopher Wray, assistant US attorney general, said in a statement that the agreement required Monsanto's full cooperation and acceptance of responsibility for the wrong-doing. "Companies cannot bribe their way into favorable treatment by foreign officials," he said. Monsanto's general counsel Charles Burson said that "Monsanto accepts full responsibility for these improper activities, and we sincerely regret that people working on behalf of Monsanto engaged in such behavior". Monsanto said it had first become aware of financial irregularities in its Indonesian affiliates in 2001, and had begin an an internal investigation, which continued at the direction of its board of directors. The company also said it had voluntarily notified US government officials of the results of this investigation, and had fully cooperated with the investigations by the DoJ and the Securities and Exchange Commission. The attempt to circumvent environmental controls on genetically-modified crops in a developing country is a significant embarrasment for Monsanto, which is engaged in an ongoing campaign to win public support in the European Union for its genetically modified crops. Item 3 The seeds
of a bribery scandal in Indonesia JAKARTA - Though a battle between big business and environmental concerns in Indonesia has led to a monetary loss for publicly listed US agrochemical giant Monsanto for breaking US anti-corruption laws, there has been no loss of liberty for any of the company's US nationals involved in the corruption. The Foreign Corrupt Practices Act prohibits bribing foreign officials and can lead to a maximum fine of $2 million per violation and up to five years' imprisonment. St Louis-based
Monsanto has been forced to pay $1.5 million in fines after owning up
to spending more than $700,000 on bribes in a country where it has been
losing money for the past few years, and one which has long been ranked
one of the most corrupt in the world. The Department of Justice and the
Securities & Exchange Commission (SEC) charged Monsanto with violating
the Foreign Corrupt Practices Act by bribing an Indonesian government
official The investigation
was sparked by Monsanto itself. The bribes were financed, at least in
part, through unauthorized, improperly documented and inflated sales of
Monsanto's pesticide products in Indonesia, the company admitted. Unlike
previous toothless anti-graft bodies, Indonesia's Anti Corruption Commission
(KPK) has the power to prosecute - a power that was previously in the
hands of the Attorney-General's office and the police. In May, the KPK According to the US authorities, Monsanto made some $700,000 in illicit payments to at least 140 current and former Indonesian government officials and their family members, from 1997 to 2002. The biggest outlay, $373,990, was to buy land and build a house in the name of a wife of a senior Ministry of Agriculture official. Soleh Solahudin, who was agriculture minister from 1998 to 1999 and visited the company's US headquarters at its invitation, confirmed after a meeting with the KPK that both Monsanto and its local subsidiary, PT Monagro Kimia, had lobbied him to allow the cultivation of GM crops in Indonesia. In September 2000, amid pressure from the public and non-government organizations, a planned agreement between the government and Monsanto to develop 20,000 hectares (49,400 acres) of GM cotton plants in South Sulawesi was postponed by Coordinating Minister for the Economy, Rizal Ramli, hours before it was due to be signed. Sonny Keraf, Minister of Environment at the time, told reporters the next day that he would send a warning letter to PT Monagro Kimia to stop production as earlier government regulations 51/1994 and 27/1999, still in force, stated that the distribution of certain agricultural products, including Monsanto cotton, needed an environmental impact assessment (AMDAL). Five months
later, to the surprise and chagrin of environmentalists, and despite the
controversy over the products, Minister of Agriculture Bungaran Saragih
signed a decree that gave approval for the limited sale of transgenic
cotton Bt DP 5690B in an experimental project at plantations in Sulawesi,
as "quality crop varieties" under the Monsanto brand name of According
to SEC documents, Monsanto had retained Jakarta-based consulting
company, PT Harvest International Indonesia, to assist it with obtaining
the various government approvals and licenses necessary to sell its products
there. Lobbying, per se, is perfectly legal and was common practice by
multinationals during the Suharto era. A Monsanto manager and the "lobbyist"
got Indonesia to approve "Monsanto's Bollgard Cotton, a GM crop,"
in South Saragih denied last week that Monsanto had offered bribes in exchange for this approval. After being grilled by the KPK, he admitted to reporters that representatives from Monsanto, PT Monagro Kimia and Harvest International Indonesia had indeed lobbied him to get permits for cultivation of GM crops, but neither he nor any ministry officials received any bribes in return. He challenged the US government to publish the name of officials who had been bribed by Monsanto. Officials at the South Sulawesi office of the agriculture ministry also received approximately $29,500 from Monsanto, US regulators claimed. Saragih also argues that accusations of corruption over his approval are illogical because the limited release condition meant Monsanto would lose money as it only permitted GM crops in South Sulawesi. Monsanto had originally applied for permission to grow GM cotton throughout Indonesia, where, according to the Ministry of Agriculture, there are 100,000 hectares of potential land for growing cotton. Local cotton output meets less than 1% of total annual demand of around 1.5 million tons or the equivalent of 500,000 tons of cotton fiber. It has a yield of only 401 kilograms per hectare while the Monsanto cotton was said to have a yield of two to three tons per hectare. In June
2001, a massive coalition of 72 NGOs launched a suit against Saragih's
decree. They lost the first and second round of the legal battle and then
appealed, unsuccessfully, to the Supreme Court in March 2002. The coalition's
lawyers said the decree had been issued by the minister as a way of legitimizing
past violations by the seed distributors, PT Monagro Kimia. It was reported that only days after the decree was announced, a consignment of 40 tons of the GM cotton seeds arrived in South Sulawesi from South Africa and was driven under armed guard from the airport in Makassar in trucks marked "rice delivery". Just as
the lawyers were arguing their case in court in Jakarta, Monsanto's GM
cotton, which PT Monagro Kimia had said was resistant to the pest Helicoverpa
armigera, was being attacked by the very same pest. One report claimed
that hundreds of hectares of GM cotton fields in Bulukumba district had
been destroyed by the pests by late June but the remaining crops were
harvested. Some of the cotton was exported and some distributed in local But later
that year, after a change of government, the Ministry of Environment issued
a decree that specifically stated the requirement for an AMDAL for such
projects. Monsanto sought repeal of the new law, and when lobbying didn't
work, it resorted to bribery, the SEC says. "When it became clear
that the lobbying efforts were having no effect on the Senior Sometime
in February 2002, an employee of the consulting firm visited the senior
official at his home and gave him an envelope containing $50,000 in $100
bills. The official took the money but said he couldn't promise he could
get the law repealed, the SEC claimed. "This decree was likely to
have an adverse effect on Monsanto's business interests in Indonesia,"
the SEC Harvest's
president-director, US national Harvey Goldstein, has denied that his
company had a hand in any bribery. "No, never...Harvest has never
been involved in corruption whatsoever," he told reporters after
meeting members of the commission. Environment Minister Nabiel Makarim,
who had issued the decree, admitted earlier this month that Monsanto lobbied
him to facilitate its business in Indonesia though he denied any wrongdoing.
"There was Makarim admitted that he had a close relationship with Goldstein, but claims that he has no knowledge of Monsanto paying bribes to employees of the environment ministry. Goldstein agrees that he knew both Saragih and Makarim personally, which is hardly surprising, given the nature of his consultancy business. The rise and fall of Monsanto's biologically engineered products in a market that generates less than 1% of the company's global annual revenue came to an end in 2003 when the company closed down its biotech cotton sales operations, confining its remaining business in Indonesia to sales of the "Roundup" brand of herbicide and conventional corn seeds. Farmers
who had bought the experimental seeds on credit ended up indebted to Monsanto.
Friends of the Earth International quoted a Sulawesi farmer, Santi, as
saying, "The company didn't give the farmers any choice, they never
intended to improve our well-being, they just put us in a debt circle,
took away our independence and made us their slave forever. They try to Asia's
key biotech research agency, ISAAA, says GM corn, peanut, soybean, potato
and rice are still under development in Indonesia and limited field testing
has been done on herbicide-resistant corn, cotton and soybean as well
as insect-resistant corn, cotton and potato. In March 2004, the coalition
of environmentalists urged the Supreme Court to rule against the Long after
he left government, Keraf staunchly supported the environmental angle,
particularly in recent controversial cases involving foreign investors,
like the government's decision last year to grant 15 mining companies
access to 11.4 million hectares of protected forest areas and the He said recently that safety of transgenic crops and their effect on the environment was still a major concern and it would be advisable for agreements on the cultivation of the crops to be postponed. Indonesia had signed the Cartagena Protocol on biosafety, so the government had to stick with the precautionary principles over transgenic matters, he argued. He contended that the issue of transgenic crops in Sulawesi was merely "trade politics". The NGOs want the government to do more to protect farmers and consumers from the risks of genetically modified crops. Their efforts are taking a long time to bear fruit. The House of Representatives began the process to ratify the Cartagena Protocol on Biosafety in July 2004 but it was left in the pending tray, as electioneering got well under way. The protocol came into force in September 2003 and commits parties to ensuring that "the development, handling, transport, use, transfer and release of any living modified organisms are undertaken in a manner that prevents or reduces the risks to biological diversity, taking also into account risks to human health". Environmentalists
hope that after ratifying the protocol, Jakarta will consult the public
to draft regulations on GMOs and strengthen the agencies involved in regulating
GMO research and use. But all eyes in Jakarta are now on the graft probe
rather than the industrialization of agriculture. President Susilo Bambang
Yudhyono has pledged to tackle head-on the In June last year, the attorney-general's office, using figures from known cases investigated by the authorities, claimed Indonesia had lost $2.35 billion in the previous two years to corruption. None of those cases are thought to have involved foreign enterprises. The commission has written to the US Department of Justice and the SEC, seeking more information. Representatives from PT Monagro Kimia as well as former Harvest Vice President Michael Villareal are expected to face questioning soon, along with several government officials. Deputy KPK chairman Erry Riyana Hardjapamekas warned: "We consider the case serious as it must serve as a warning to other publicly listed companies not to bribe state officials." Bill Guerin, a Jakarta correspondent for Asia Times Online since 2000, has worked in Indonesia for 19 years in journalism and editorial positions. He has been published by the BBC on East Timor and specializes in business/economic and political analysis.
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