Little progress in Indonesia army reform - rights groups

JAKARTA, Feb 16 (Reuters) Indonesia has made little progress in its effort to end the military's business activities, which are seen as fuelling rights abuses, human rights groups said today.

Indonesia's military had a powerful role in the strongman regime of former president Suharto, during which it was frequently accused of violating the rights of protesters and of non-combatants in conflict zones.

It was accepted policy under Suharto, pressured out of office in 1998, for the military to engage in commercial businesses to help supplement what it received from the country's budget. Changing that has been one of the goals of post-Suharto reform.

But a government team set up to review military businesses had done virtually nothing since it was formed in 2005 and a promised presidential decree to implement a 2004 law banning the military from engaging in business ventures has yet to be passed, said New York-based Human Rights Watch.

''Up until now there's still no real progress in the effort to stop the military's self-financing,'' Charmain Mohamed, a Human Rights Watch researcher, told a news conference in Jakarta.

''The problem of military business is the biggest obstacle to military reform in Indonesia, because until the civilian government fully controls the financial aspect of the military, they will not be able to control them in other areas, including on accountability for serious human rights violations,'' she said.

The 2004 military law requires the government to take over all military businesses by 2009 but officials have yet to set the parameters for how it will restructure military businesses, the rights group said.

''The absence of implementing regulations has delayed action, created confusion, and left open opportunities for the military to manage its businesses as it sees fit, including by selling some companies and disposing of assets without adequate oversight,'' it said in a statement.

Usman Hamid, chairman of the Indonesian human rights group Kontras, said lack of transparency and accountability in military financing meant it was impossible to know the real value of the military's finances.

He said that military businesses have fuelled human rights violations and failed to improve the welfare of low-ranking soldiers with meagre salaries.

''Research shows that military businesses contribute to lack of professionalism, an increase in military violence and hamper efforts to put the military under civilian rule,'' he told the same news conference.

Human Rights Watch, in a report released in June last year, said the Indonesian military raises money outside the government budget through a sprawling network of legal and illegal businesses, many not controlled by the military's central command.

The defence ministry has said ending the business ventures was not an easy thing to do as the military still faces major budget problems. It says the country's defence requires a minimum annual budget equivalent to .8 billion but the government can only provide half of that.

REUTERS PDM PM1629