Jean Strecker was a powerfully built man, looking younger than his sixty odd years, head of the second largest civil engineering and construction company in France, Travaux Publiques Strasbourgeois.
TSP employed over thirty thousand people. Their head office was located in the suburbs of Paris, and their construction sites could be seen all over France and in many countries overseas.
Strecker liked to tell people, that if the ratons were excluded, they counted only about three thousand real employees. The ratons he contemptuously referred to were the mainly North African immigrant workers on their construction sites.
During his long career, Strecker had spent more than ten years running one of the company’s subsidiaries in Venezuela. It was there, that he had adopted, probably unconsciously, the style of a certain type of South American.
He sported a narrow Zorro type moustache and wore dark broad shouldered suits with trousers tapering to narrow bottoms, and rather pointed black shoes. Because of this appearance and his forceful manner, he was nicknamed behind his back El Bandido by certain of the Indonesians.
Strecker as the CEO of a large powerful company had a steam roller attitude, making it clear that TPS, the leader of Brodzski’s consortium, was graciously bestowing on Indonesians the benefit of their superior technology and vast experience.
He could not, or would not, try to appreciate, or understand the position of the Indonesians on the question of their participation in the project equity. Strecker’s attitude was summed up by the idea that all considered, a hundred or so million dollars of equity, for a country the size of Indonesia was a mere trifle.
Ennis felt disappointment and surprise at Strecker’s attitude. He acted like a conquistador in a newly vanquished territory, but unfortunately. Ennis was not the only one who had remarked and was dismayed by Strecker’s arrogant manner.
Ennis had no particularly partisan feelings towards the Indonesians when it came to business. He wanted the success of the project, as much as anybody else, and probably more so. It was evident that the other consortium members had invested in the project for the same reason as TPS, who would have the most to gain, which was why Strecker’s attitude was particularly difficult to understand.
TSP was accustomed to dictating their own terms and conditions in their traditional markets in the French speaking countries of West Africa, or in South America, perhaps Strecker had not realised, that the situation was different in Indonesia.
It seemed to Ennis that if anybody was going to ruin up the arrangements that had taken so much effort to put together, it would be Strecker. He was inflexible, and appeared to expect a lucrative contract signed and sealed by the President of the Republic of Indonesia, endorsed by the French government to be handed to him on a silver tray.
Ennis had difficulty in appreciating why Strecker did not appear to understand the subtleties of the negotiations. Perhaps because he had always worked on government contracts in France, for highways or public works, or on overseas projects sponsored by the French government, backed by aid or soft loans to their ex-colonies or political friends.
Contracts had been attributed to TPS in France by local government authorities, where prices were arranged in advance, with substantial commissions, which often financed-illegally-interested local political parties with almost standard percentages built into the generous prices.
Since the formation of the consortium, TPS had gradually awoken to the potential of the South East Asian market. They had established an expatriate representative in Jakarta, Jan Pieter Michaelsen who was a Belgium Flammand, to develop other business relations in the booming construction market.
Ennis had met him on many occasions, on consortium business and had learnt that after an optimistic start by Michaelsen, TSP was having difficulties. This was mainly due to Strecker’s unwillingness to comply with local business practices, but partly because of Michaelsen’s lack of experience. His qualifications had been unfortunately limited to the management of TPS customer service in France. Strecker had felt that he was a good company man, but the fact that he had no experience in managing international business relations did not seem to count.
Michaelsen explained to Strecker that their lack of success was due to the Indonesians who evidently did not understand the enlightened business methods of TPS. Ennis had the impression, that this had been an excuse for his lack of an early breakthrough, but some days later after discussions between the consortium led by Strecker with the Indonesians, he had began to understand the difficulties.
Axelmann pointed out the problem to Michaelsen but unfortunately it was not in his interest to tell his boss where he was going wrong, he was a company man.
Strecker sat upright on the edge of a leather couch, in front of a low coffee table facing Wihartjo, in the Ministers official reception chamber. Strecker was holding his cigarette, in his rather effeminate manner, by the extreme ends of his finger tips, however, there nothing effeminate in his hands, they were very large for a man, who had never had the need to do the least manual work during the past thirty years or more of his life.
Strecker had studied at the Ecole Polytechnic, the same as Brodzski. As Heinz Reinbold frequently liked to snigger ‘same school’ aping Brodzski.
Polytechnicians were reputed for their Cartesian approach. Unfortunately, they often presented logical solutions to illogical problems. Their motto was A la patrie, la science et la gloire, very nice Ennis thought to himself when he listened to Brodzski’s or Strecker’s theories-but for Napoleon’s era.
Ennis, like many other people in France, sometimes felt that such elites plagued the country. Not for the same reasons. His feelings resulted from his Anglo-Saxon upbringing. The only thing Cartesian in French society, for Ennis, was the certitude that nothing in their behaviour or in their institutions appeared, at least to the casual foreigner, to follow any clear logic.
France was, he knew, not unlike any other industrialised society. In political and economic affairs, decisions and their consequences were mostly illogical and unforeseeable; otherwise, the world would quite simply have been an easier place to live in.
Ennis had been criticised for a sometimes-simplistic business approach. He had always tried to coax people around to his way of thinking. If that did not succeed, then he tried if possible to accommodate their ideas. Whichever the result, his idea was to get agreement gradually, painlessly, slowly drawing them into a consensus. He did not feel that there was anything unethical in that method, no force or coercion was applied.
If for various reasons, the results were not as positive as expected, he figured that decisions could always gracefully reversed with a little flexibility. Maybe, it would cost some money, but after all, people had made their choice of their own free will, though perhaps on occasions with a friendly little coaxing.
When on occasions he was confronted with people who were totally opposed to his ideas, or he sensed antipathy, he immediately avoided them, knowing that they could never reach a working agreement. He knew that the world was full of other more reasonable people, with whom he could always find a satisfactory arrangement.
That sort of consensus was used in Indonesia society, a kind of friendly persuasion, where forceful attitudes were very embarrassing and avoided at all costs.
After all the time spent and efforts to bring the partners together, he mused to himself, here was Strecker seated in front of Wihartjo obliviously creating a majestic fiasco, reversing months and months of careful efforts to build an feeling of mutual trust and confidence between the two sides.
Wihartjo looked on, with the enigmatic mask of a Javanese mystic, watching a child laboriously and forcefully explaining his desires. Strecker described, in execrable English, his plan for the raising of the equity on the Indonesian side, as he waved his filter tipped cigarette with one hand, and scribbled figures on a note pad with his gold plated pen held in the other.
It was very simple; the Indonesians should put in 120 million dolla
rs in equity; provide financing for all the local work of civil engineering. This included the construction of a vast concrete raft, to support the mill, an island in the middle of the rice paddies, on the edge of the Barito River. For which a further sum, estimated at about 150 million dollars, would be needed for the main civil engineering.
Ennis felt his blood pressure rising as he observed the dammed Bandido Strecker, who did not appear to understand that everybody, including Wihartjo, were simply trying in their different ways, to create an extraordinary industrial complex in the heart of the rainforest of Borneo. The objective being to exploit its riches for the benefit not only for its investors, but all those who would find jobs and a better life, not forgetting the contribution it would make to the economic development of Indonesia.
The Indonesians wanted financing, which was all too evident from the very start, they could raise part of the funds needed for the investment, but the new company, and its owners would have to raise another part. The remainder, they planned to get from outside sources, the Asian Development Bank or the International Finance Corporation. If, the Indonesians could put together 270 million, or about twenty five percent of the total investment as Strecker wanted, then they could go it alone, dispensing with the consortium.
Wihartjo, after a long pause, said so to Strecker, and for a Javanese, quite bluntly. He then politely suggested both sides examine in more detail the financial aspects of the project, so that he could put forward more concrete proposals to the government.
It had already been tacitly agreed, that the Indonesians had to build the equity from bankable assets such as pulp wood resources, timber concessions and land. These would be evaluated from the standing stock of timber, the land required to build the mill and the long-term contracts they could negotiate for the pulp sales.
For the first time, Ennis saw Sutrawan mop his brow; he seemed to switch off, as Indonesians do when their problems became too difficult.
The day was lost and the only thing left for them to do was to gracefully retire, waiting for the storm to pass, returning some days later with a new face saving idea. But no, Strecker laboured on in his broken English, insisting on calling the Barito the Rio Barito.
He thinks he is still in God dammed Venezuela, Ennis fumed as Strecker ploughed on; very oblivious to the grim impression he was creating.
Strecker’s English was so bad and seeing the puzzled looks on their faces, he was finally forced to turn to Ennis for translation, speaking to him in French. It gave Ennis the opportunity to intimate that they should take time out to think over Strecker’s suggestions, as they were getting a little bogged down. It seemed to come as a surprise to Strecker, who looked around questioningly; finally, it slowly penetrated, when he saw the blank expressions.
Riady had that bemused look on his face, which when translated into English said, help!
As they left, Riady took Ennis to one side and he needed to get an explanation for the steamroller tactics of Strecker.
‘You know John, I really can’t understand these TPS people, they really don’t seem to know what they are doing!’
‘Yeah.’
‘It’s lucky that Wihartjo is our friend.’
Ennis waved his hand in dismissal, replying to Riady to forget it for the moment. There was no need to seek confrontation, they would have plenty of time to think over the problem and come up with a solution during the following days. They had planned a last inspection of the mill site as well as its alternatives over the following few days with a view to finalising their choice.
Riady returned with Ennis to his hotel suite. He had insisted it was important that Ennis understand certain essential facts on how the concessions operated to avoid upsetting the interests of certain parties in Kalimantan. He was seriously worried after observing Strecker’s lack of sensitivity and blundering tactics.
Riady described how Indonesian army units operated as semi-mercenaries in the pay of concessionaires, obeying orders in the interest of their officers. It was easy; the army possessed all the means necessary, communications, transport, arms, training and alibis.
As mercenaries in the employment of their senior officers, their job was to police and protect the loggers. It was difficult to say exactly from whom, it was certainly true that there were occasional incidents; troubles with the local forest peoples or even isolated camps robbed by bands of Dayak pirates.
The army acted as a private police force in the absence of conventional state authority. There were little or no permanent police units in those remote areas and the provincial governors, wisely, ignored the activity of the army. The police in the towns such as Bandjarmasin or Sampit possessed very few patrol boats and no planes or helicopters.
When it became obvious that the forestry industry complex would introduce foreigners into a large region, the loggers who exploited the army’s concessions became worried. They loggers operated their concessions as private fiefdoms, controlling almost every aspect of daily life, not only economically but also administratively. They controlled transport, supplies, telecommunications, and even the movement of peoples.
The few villagers that continued their ancestral life and customs, lived outside of the system, but, as soon as they became dependant on non-traditional activities, they were drawn under the control of the loggers.
Colonel Sudianto was against Barito, it infringed on his territory. His division had controlled several concessions in Central Kalimantan for over thirty years. Ever since he had been named Regional Commander, he supervised the concession area under his control efficiently and profitably, as his own private domain.
He had spread his influence across Central Kalimantan, selling his services as a mercenary to almost every other active concessionaire; even the local forestry department officials were in his pay. They were all deeply suspicious of all outsiders, especially of those who did not understand their rules.
The men in the government administration from Jakarta passively accepted the army’s rule, it was part of an age-old system, they always sought consensus, avoiding confrontation, and it would have been politically unwise to go against the military. The army as official concession holders, worked closely with the forestry department, observing most of the rules and regulations. The forestry department left them alone, ignoring the under-declared or illegal export of whole logs and other irregularities.
Since the governments ban on the export of whole logs, the Forestry Department controlled the cargoes and movement of ships between the loading points on the rivers and the transport to sawmills in different parts of the country.
The ships were loaded, but after they weighed anchor, there was no way to control trans-boarding of cargoes on the high sea or prevent ships stopping in Singapore or the nearby Malaysian states, to unload all or part of their cargoes. The seas between the islands were Nusantara, ours, but neither the government nor the customs authorities had the desire or means to control every ship in their waters.
Harvesting of pulpwood did not interest the army, the prices were too low, no margins, too much hard work, and too many controls and inspections by difficult customers, industrialists whose culture the army did not understand. In any case, they realised, they were not equipped to undertake that type of logging.
Colonel Sudianto and his commanding officers arrived at the conclusion that they had no need of a pulp mill that harvested wood in their territory. If there were to be a mill, it would have to operate on raw materials from plantations, which was no problem for the army. They could even participate in the development of the plantations, but logging large quantities of pulpwood, over their territory was a threat and unacceptable to them.
In Bintang Agung’s mill in Sumatra, the army controlled the wood supply, by contract for forest clearing operations under the government’s transmigration projects. It was clear-cutting, which as the name indicated denuded the land of all trees large and small. It slotted nicely into the commercial wood operations, coming
after the extraction of the valuable commercial timber. Barito, on the other hand, planned very selective logging, extracting only dacrydium and agathis, operating in all concession areas, with the emphasis on tight price control and efficiency.
Sudianto had decided that they would resist the Barito development. Their strategy of defence would be based on delaying tactics, five years at least. He had been told that the mill would take three years to build. There was three years supply of wood in existing plantations on Pulau Laut, an island within easy reach of the planned mill, which left five or six additional growing years for new plantations to reach productive maturity.
There would be no head-on confrontation; they would work quietly through Regional Command and through Staff Headquarters in Jakarta. Strong arm or scare tactics would be sparingly used, only if the need arose to show the Belandas their error. They did not wish to attract unnecessary attention to themselves from the foreigners and their interfering press.
Colonel Sudianto was confident; he knew very well that the best strategy would be through delaying tactics, his territory and world was an ideal terrain for fighting a war of attrition and delay. The Belandas were always too impatient and would be defeated by the attrition, time and cost. Nevertheless, the moment had come to give a warning to the Belandas and their friends.
His men were carefully placed to watch the foreigners closely, following their every movement. Muliyadi of the Ministry, in Jakarta, reported on each new development on Sutrawan’s side, whilst his own men reported on the movements of the foreigners.
Sudianto had watched and studied carefully over the months the progress of Barito. He had an open mind; he was not against development and progress, his sole objective was to protect his own and the army’s interests. As the forestry survey had advanced, his men had even provided assistance as part of his intelligence gathering process.
After his men had analysed the preliminary forestry report, the first warning signals had started flashing. His foresters demonstrated to him that it was impossible to deliver wood to the mill using selective cutting methods at twenty dollars a cubic metre.
When at last, a copy of the consortium’s feasibility report arrived, he called a crisis meeting. It confirmed his worse fears; the Director General of Forests, Rudini had gone as far as promising, that the reserve funds, that had been set aside by and belonged to the concessionaires, be invested as capital to build the mill.
Sudianto was totally against the use of those funds for a foreign project over which he would have no control. The army preferred smaller investments, in their own selected projects, saw mills, plywood mills and wood panel plants.
His men knew nothing about pulp and paper making; there would be too many Belandas involved. He accepted the Chinese and could even tolerate the Japanese, they were not so different and they were reasonable men, not as selfish or arrogant as the Belandas, and their objectives converged with his own. He did not trust the Belandas, but above all, he realised that he and his men knew little or nothing about the technicalities and complexities of operating a vast pulp mill.
He would help them to make their plantations, but not supply the wood from his forest concessions or invest in their mill. He instructed his men to obtain copies of all new reports and data made by the Belandas consortium and their friends.
Early the following day Ennis left for Kemarin Airport with the consortium team, where they were to take a domestic flight for Bandjarmasin. The airport lay within the sprawling urban area that formed the endless suburbs of Jakarta.
The flight was scheduled at six thirty; check in time was one and a half hours before take off. It was important not to arrive late at check-in, the computer booking system was rudimentary, it was supplemented by a manual list which resulted in a first come, first served system.
Any official with pull, or wealthy traveller with a fifty thousand Rupiah note, could be guaranteed of a seat. Those who checked in early ran less risk of being bumped off their flight; it was the unlucky tail enders who often found to their dismay that they had been bounced off the overbooked flight.
In order to be at the check in early, they needed to leave the hotel at about four in the morning. In those circumstances, Ennis and his hard drinking friends did not bother going to bed. They spent the night at the Tanamor club, drinking. That evening he felt a good solid drink was justified, he could see that there was going to be no easy consensus between the consortium members, either foreign or Indonesian and the Ministry.
As they drank, they watched the other customers lunging from time to time through the smoke and noise towards the doubtful looking exotic flowers that frequented the club, seated at the bar, which was awash in beer. It took little persuading to get them onto the dance floor, where they gyrated in a lecherous ritual, preliminary to negotiations on the arrangements for the remainder of the night.
Ennis’ own experience told him one or two of the girls started to appear attractive after a couple of drinks. As for the others it would require a lot more beer.
THE OFFICE
Borneo Pulp Page 18