[Kabar-Irian] Irian News - 2/22/06 (Part 3 of 3)
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- Papua needs rp10 bln to construct Asmat Harbor
- Probe into Freeport suspects completed
- Freeport guards shot by arrows in Indonesia's Papua
- Protesters block road leading to US-owned gold mine in Papua
- Govt seeking more info on incident in Freeport mining area
- Opposition To Military Corp Security Svc
- Govt's plan to legalize TNI security business criticized
- Freeport in Indonesia: Filling in the holes
*****************************
Antara
Feb 22 18:54
Papua needs rp10 bln to construct Asmat Harbor
Jayapura, Papua (Antara News) - Papua province’s transportation service
needs funds amounting to Rp10 billion (around US$1 million) to construct
Agats harbor in Asmat District, southern Papua.
The local administration had earlier proposed a budget of Rp10 billion for
the development of Asmat harbor but it was not accepted, Asmat Harbor
Administration Chief Marthen Kaiba told ANTARA here on Wednesday.
Because the district administration’s budget proposal was not accepted,
the district’s 2006 budget did not include an allocation for the Asmat
harbor project, he said in disappointment.
If Asmat harbor were constructed, passenger ships such as MV Tatamailau,
MV Umsini, MV Ngapulu and MV Labobar which belong to state-owned shipping
company PT Pelni, would be able to berth at the port, he said.
He explained that he had discussed the project with Asmat District Head
Yuventius Biakay. And the proposal to build the harbor had also been
conveyed to officials of the transportation ministry in Jakarta. But it
seemed that the officials had not listen to the request, he said.
Kaiba said construction of the 70 meter-long and 8 meter- wide harbor
would cost around Rp10 billion and it could be done in several stages. One
of the things that need to be built in the first stage of the project was
a road costing around Rp2.75 billion, he added.
Although the Government had not allocated a budget for the harbor
construction, the local administration would go ahead with the plan as the
Director General of Sea Transportation had agreed to seek a foreign loan
amounting to Rp2 billion for the initial stage of the harbor development.
The Asmat people needed a proper harbor to maintain contact with the
outside world, including to get more frequent visits of foreign tourists
to Asmat, which is very rich in traditions and has very interesting
handicrafts, especially unique statues, he said.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
The Jakarta Post.com
National News
February 18, 2006
Probe into Freeport suspects completed
The Jakarta Post, Jakarta
Police have finished their investigations into eight men accused of
shooting dead an Indonesian and two American teachers in Papua province
and have handed their files to prosecutors for examination.
"The evidence is divided into three files," National Police spokesmen
Brig. Gen. Anton Bachrul Alam said Friday.
He said the police's file on Antonius Wamang, the alleged mastermind of
the attack, was separated from the other suspects.
Police are charging Wamang with premeditated murder, which carries the
maximum death penalty.
The seven other suspects, three in one file and four in another, could
each face 15 years' jail if found guilty of aiding and abetting the
murder.
Physical evidence handed to prosecutors includes 97 5.56 caliber shell
casings, eight 7.62 caliber shell casings, one M-16 magazine, two Land
Cruisers and three trailer trucks.
During the investigation, the police questioned 22 witnesses, including
several foreigners who survived the attack.
The killings took place on Aug. 31, 2002, when a group of men attacked a
convoy of cars near the Grasberg mine owned by PT Freeport Indonesia in
Timika, Papua.
Two U.S. nationals, Freeport teachers Rickey Lynn Spier and Leon Edwin
Burgon, and one Indonesian, Bambang Riswanto, were killed in the attack.
Eleven other people, including children, were injured.
On Jan. 11 this year, police arrested 12 men allegedly involved in the
attack, later releasing four of them for lack of evidence.
Shortly after the attack, police had said there were indications
Indonesian Military soldiers were involved.
However, a investigation later by the police and the American FBI found no
evidence implicating troops in the attack.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Freeport guards shot by arrows in Indonesia's Papua
21 Feb 2006 13:22:10 GMT
Jakarta, Feb 21 (Reuters)
Illegal miners equipped with bows and arrows wounded two security guards
at a mine run by a unit of U.S. company Freeport-McMoRan Copper & Gold
Inc. in Indonesia's remote Papua province on Tuesday, police said. The
guards along with soldiers, policemen and other government officials tried
to force around 100 illegal miners out of the Grasberg copper and gold
mine before the situation spun out of control, Papua police spokesman
Kartono Wangsadisastra said.
"Those people then became angry and threw things at the officials. Two
Freeport security guards were hit by arrows, but there are no other
injuries," Wangsadisastra said.
"The illegal miners have also blocked a road and police officers are
negotiating with them to clear the way. However, they want to meet the
boss of Freeport."
Grasberg, one of the world's largest mines, is heavily guarded by
Indonesian military and police.
Illegal miners often enter mines across the sprawling archipelagic nation,
which is rich in mineral resources such as copper, gold and tin.
In 2002, local Papuans opened fire at teachers from a school run by the
mining company when they were driving through the mining location, killing
two Americans and an Indonesian.
Ties between Indonesia and the United States were strained by that incident.
Relations have improved after Washington restored military ties in
November with the most populous Muslim nation as a reward for helping the
U.S.-led war on terrorism.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
The Jakarta Post.com
Latest News
2/22/2006 10:14:09 AM
Protesters block road leading to US-owned gold mine in Papua
Jakarta (AP)
Hundreds of illegal miners were blocking the road leading to a U.S.-owned
gold mine in Papua province on Wednesday, a day after they clashed with
security forces and mine guards, apolice spokesman said.
The protesters set up wood and stone barricades on the road leading to the
mine, which is run by a local unit of New Orleans-based Freeport-McMoRan
Copper & Gold Inc, said Kartono Wangsadisastra.
It was unclear whether production at the massive gold mine was affected by
the dispute.
Calls to Freeport spokespeople in Jakarta were not immediately answered.
The protesters earn their living retrieving gold from waste rock dumped by
the mine, Kartono said.
"When we try to disperse then, they say we are not thieves because we are
only sifting through rubbish," he said.On Tuesday, the miners fired arrows
at police and mine security guards who tried to break up the protest. Two
security guards received minor injuries, Kartono said.
The mine in the remote province has long had an uneasy relationship with
local people, most of whom are desperately poor. Papua is also home to a
separatist rebellion, complicating Freeport's security still further.
Security practices at the site have came under renewed scrutiny since a
2002 attack on a convoy of teachers working at the mine killed two U.S.
citizens. Local and foreign rights groups claim soldiers took part in the
attack, allegedly toextort more security payments money from Freeport.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Antara
Feb 22 20:57
Govt seeking more info on incident in Freeport mining area
Jakarta (Antara News) - The government will seek more detailed information
on the incident in Tembaga Pura, Papua province that led to the suspension
of PT Freeport’s mining operations, Energy and Mineral Resource Minister
Purnomo Yusgiantoro said.
"We have received a report that PT Freeport has stopped its production
starting this morning. We are still monitoring the situation. Now we want
to get clear information from the field," Purnomo said after attending a
meeting between President Susilo Bambang Yudhoyono and visiting Vietnamese
Prime Minister Phan Van Khai here Wednesday.
According to the report, Purnomo said, local people had barricaded Mile
72-74, a route to PT Freeport’s gold mines following a clash between
illegal gold miners and the company’s security personnel.
"We do not know yet who barricaded the road and therefore Freeport
suspended its operations," the minister said.
Purnomo said there were illegal miners in almost all mining areas in the
country and they usually collected mining products that had been discarded
by the mining companies operating in the areas.
On tripartite cooperation between state oil company PT Pertamina,
PetroVietnam and Malaysia’s Petronas, Purnomo said, the process of initial
exploration had been conducted in three locations in three countries.
"In Vietnam (the exploration) will be carried out in Block 10-11, in
Malaysia in Sabah, in Indonesia in Randugintung on the border between
Central Java and East Java," he said.
However, Purnomo could not give details on oil volume that could be
explored in the three locations.
"The exploration is running on hope that the three can get good results.
This is still initial exploration thus we don’t know yet the oil
reserves," Purnomo said.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Update 1-Freeport says Papua mining operations still suspended
Thursday 23 February 2006, 8:29pm EST
Jakarta, Feb 23 (Reuters)
Activities at a huge mine owned by a unit of Freeport-McMoRan Copper &
Gold Inc. (FCX.N: Quote, Profile, Research) in Indonesia's remote Papua
province remained suspended on Thursday, as protests continued in the
vicinity, a spokesman for Freeport's Indonesian unit said.
The spokesman for PT Freeport Indonesia, Siddharta Moersjid, said some 200
protesters were still in the area.
The continued suspension of mining came as local Metro TV showed pictures
of a group of protesters, who appeared to be Papuans, smashing windows
overnight in the lobby of a Jakarta building housing Freeport's offices in
the capital.
Moersjid said the protesters had also set fire to a travel agency on the
ground floor of the building. No protesters reached Freeport's offices on
the 5th and 7th floor, he said. Police said the vandalism occurred at
around 3.30 a.m. on Thursday, but they had few other details.
The Freeport Papua operation has been a frequent source of controversy in
Indonesia on issues ranging from its treatment of the environment to the
legality of payments to Indonesian security forces who help guard
operations.
Mining was initially suspended on Wednesday, a day after illegal miners
clashed with security officers, soldiers and police.
During the Tuesday clash, local miners equipped with bows and arrows
wounded two security guards at the Grasberg operation, one of the world's
largest gold and copper mines.
Police have said the angry locals wanted to meet top executives of
Freeport Indonesia, Indonesia's largest taxpayer, before they retreat.
Freeport has said it was too early to say how much production would be
lost from its suspension of operations at its giant Grasberg mine.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
The Australian
Protesting Papuans blockade gold mine
Sian Powell
February 23, 2006
Work at the world's largest gold and copper mine was suspended yesterday
after a band of 300 Papuans brandishing machetes and bows and arrows
blocked the road to the site in Indonesia's remote province of Papua.
The blockade followed a ruckus on Tuesday when security guards from
Freeport's Grasberg mine chased locals away from their illicit gold-mining
operations.
Two security guards were shot with arrows, according to the local police
chief Adjutant Commissioner Dedi Junaidi, with one seriously injured,
suffering damage to his lung.
The protesters yesterday demanded a meeting with Freeport's largest US
shareholders; a meeting with Papua's governor or the regent; and
permission to pan for gold around the mine, Commissioner Junaidi said.
He said the protesters had blocked the road with trucks and bulldozers
they had taken from the mine, after threatening the employees with
machetes.
"There's no rioting now, they are just sitting in the street waiting for
their demands to be met," he said.
The protesters earn a living recovering gold from waste rock dumped by the
mine and they cannot understand why they are not permitted to use this
"rubbish" as they want, a company spokesman said.
Grasberg mine, which is run by a local unit of New Orleans-based
Freeport-McMoRan Copper & Gold Inc, has long had problems with the local
people living in the area, who regard the land as theirs.
Desperately poor, the locals resent the massive earnings enjoyed by
Freeport, and its reliance on the Indonesian armed forces for security.
An official inquiry was launched in Indonesia earlier this year into the
mine's security practices following revelations Freeport-McMoRan paid
nearly $US20 million to Indonesian military and police officials posted
around the massive mine between 1998 and 2004.
Indonesian politicians have also begun to investigate claims that Freeport
has polluted the surroundings with toxic tailings.
The mine's relations with Jakarta were dealt a blow in 2002, when
assailants opened fire at teachers from a school run by the mining company
when they were driving through the mining location, killing two Americans
and an Indonesian.
The Indonesian military was suspected of playing a role in the attack, but
a rebel from Papua's independence movement, OPM, has since been indicted
for the murders.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Dow Jones Newswires
February 20, 2006
DJ Indonesia Press: Opposition To Military Corp Security Svc
(Comtex Business Via Thomson Dialog NewsEdge)JAKARTA, Feb 20, 2006 (Dow
Jones Commodities News Select via Comtex) --A coalition of
non-governmental organizations opposes a Ministry of Defense plan to issue
guidelines regulating the Indonesian military's commercial security
service contracts with private firms, the Jakarta Post reported Tuesday.
"Issuing guidelines will mean legalizing the military's income from
corporations...(so) security authorities will end up working for
corporations rather than carrying out their primary task of defending the
state," the report said, citing Commission for Missing Persons and Victims
of Violence spokesman Haris Azhar.
The report said that commercial security service contracts between
military units and private firms violate laws governing national defense.
Indonesia's Defense Minister Juwono Sudarsono said earlier this month that
the guidelines would be issued in tandem with the results of a probe of
the legality of U.S. mining giant Freeport-McMoRan Copper & Gold Inc.'s
(FCX) payments to security forces on Papua.
-By Dow Jones Newswires, Jakarta Bureau; 62-21 39831277;
djn.jakarta@dowjones.com
-Edited by Michael Kitchen
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
The Jakarta Post.com
National News
February 21, 2006
Govt's plan to legalize TNI security business criticized
Ridwan Max Sijabat, The Jakarta Post, Jakarta
Activist groups united on Monday to oppose the government's plan to
"legalize" the military's security business, in which private companies
pay soldiers to protect their industries in conflict areas.
Defense Minister Juwono Sudarsono recently said the government was
preparing a set of guidelines to regulate the relationship between the
Indonesian Military and corporations in security affairs.
Juwono's announcement comes after reports last month that U.S. mining
subsidiary PT Freeport Indonesia made direct payments to soldiers to
secure its copper and gold mine in Timika, Papua.
An alliance of NGOs said such guidelines would be against the Law on State
Defense and the Law on the Indonesian Military (TNI), both which ban the
military from receiving funds outside of the state budget.
The alliance includes Propatria -- a group of defense and military
analysts -- Indonesia Corruption Watch, the Commission for Missing Persons
and Victims of Violence (Kontras) and other human rights groups --
Imparsial, Human Rights Watch and Infid -- along with the Forum for the
Environment (Walhi).
"Issuing guidelines will mean legalizing the military's income from
corporations, making it less professional. It will also mean ... security
authorities will end up working for corporations rather than carrying out
their primary task of defending the state and protecting the people,"
Kontras spokesman Haris Azhar said.
Chalid Muhammad of Walhi said the guidelines could also help legalize
human rights abuses and environmental destruction at mining sites,
particularly those in conflict-ridden areas.
"If the government issues the guidelines, human rights abuses and
environment destruction will continue and security personnel in the field
will prioritize work in corporate security for money," he said.
Harry Supartono, the coordinator of Propatria, said the NGOs would meet
the House of Representatives Commission I on defense to seek political
support for their opposition to the guidelines.
He hailed a House working committee for its decision to investigate
Freeport's transparency in its management of the environment, taxes and
revenues. However, the probe should be expanded to investigate Freeport's
security dealings, he said.
State Minister for the Environment Rachmat Witoelar last week sent a team
to Timika to probe allegations of environmental damage at Freeport's
mining site.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Asia Times Online
February 21, 2006
Freeport in Indonesia: Filling in the holes
By John McBeth
Jakarta - Burdened by a legacy of environmental destruction and what was
widely seen as an unhealthy relationship with president Suharto's New
Order regime, Louisiana-based Freeport McMoRan Copper & Gold has long been
depicted as the poster child for all that is wrong with mining in
Indonesia. But does the US mining giant still deserve that reputation, or
are the company's many critics simply living in the past?
For all the ugly holes they dig, multinational resource companies have
changed a lot in the past 15 years. Reined in by environmental groups,
tougher foreign-government regulations and often their own concerned
shareholders, many are now being held to higher standards of corporate
governance than ever before.
In Freeport's case, that's more than most. In the past 10-15 years it has
tried hard to make amends for past mistakes, introducing comprehensive
community development and livelihood programs, improving health services
and employment opportunities and working on innovative ways to help the
environment bounce back from mining activities.
Yet the same activists and media commentators who rely on copper as with
everyone else for their computers, telephones and electricity never seem
to tire of raking the firm over the coals - often for infractions incurred
decades ago.
Take the New York Times and the two full pages it devoted recently to
Freeport's hugely profitable Grasberg mine in the central highlands of
Indonesia's easternmost Papua province - much of it focusing once again on
long-familiar environmental issues and on the company's now
well-documented, if controversial, practice of funding Indonesian military
forces guarding the site.
The same newspaper has also extensively covered allegations of mercury
poisoning against the US gold company Newmont in North Sulawesi - charges
that have been disproved by a host of independent monitors, including the
World Health Organization, Japan's National Institute for Minamata
Disease, the Australian Commonwealth Scientific and Industrial Research
Organization and Indonesia's own Health Department.
With that store of technical evidence stacked against it, the Indonesian
government recently dropped a US$150 million civil lawsuit against the
company rather than take it to court-directed international arbitration.
Instead, the two parties came to a $30 million "goodwill" settlement last
Thursday, whereby Newmont maintained its innocence and the two sides
merely agreed to disagree on the issue in their joint announcement. The
voluntary settlement is also expected to have a bearing on the ongoing
criminal trial against the company and its president director in North
Sulawesi.
Both cases raise the question of what critics expect of mining companies.
Some of the more radical groups, such as the Mining Advocacy Network and
Australia's Mining Policy Institute, deny they want to stop all mining.
But everything they do points to just that, lashing out at anyone who
challenges their conventional wisdom that Freeport and other mining
companies haven't done enough to change their old ways. As a result, the
same allegations are repeated over and over again without any effort to
determine whether they remain valid.
Because much of their funding depends on attacking multinationals, the
same activists have long overlooked other more dangerous pollution. Why,
for example, do environmental activists and even the government continue
to ignore the unfettered use of liquid mercury by thousands of illegal
gold miners in North Sulawesi and Kalimantan? While they pass it off as
quaint indigenous mining, it is in fact organized and run by influential
regional power-holders.
Freeport isn't about to abandon what is now a $12 billion investment. Nor
does a government close a mine that has already brought in revenues of $33
billion and promises billions more over the next 40 years. Last year, a
quarter of a decade after going into Papua, the company's revenues hit an
all-time high of $4.1 billion, and it remains Indonesia's largest taxpayer
and one of its biggest employers, with more than 18,000 workers.
Freeport may be stocked with people working on its annual $60 million-plus
environmental and community development program, but the latest outcry
shows once again that it will probably have to resign itself to the role
of everyone's favorite whipping boy. The target this time around has less
to do with those issues and much more to do with its relations with the
equally reviled Indonesian military.
While the 1991 Contract of Work doesn't specifically refer to the
military, the company is bound under its enabling provisions to "develop
special facilities and carry out special functions", including "free
medical care and attention to all its employees and all government
officials". For Freeport, providing facilities and monthly allowances to
the troops makes perfect sense when the government itself is unable to
offer adequate budgetary support.
The company learned a hard lesson back in 1994-95 that it was much better
to have contented soldiers than resentful ones when it was accused of
complicity in the deaths of Papuan activists on its concession - including
some who had been imprisoned in company-provided containers. Freeport
denies it had anything to do with the killings and the case is still
unresolved. The government's civilian presence in the area then was
limited to only 50 officials, leaving the company to provide most of the
essential services, including the security for the mine itself.
Freeport may have relished that proconsul role in the early days of its
presence, allowing it the freedom to do what it wanted. But as times
changed in the global mining industry, its position became increasingly
uncomfortable, finally coming to a head in March 1996 when riots broke out
in the high-altitude mining camp of Tembagapura and in Timika, the
clapboard coastal town that depends on Freeport for its economic
livelihood.
What sparked the violence has always been a mystery, but Freeport
employees and security staff claim they saw straight-haired men carrying
walkie-talkie radios directing the rioters in Tembagapura and later in the
destruction of Freeport's new $2 million state-of-the-art environmental
laboratory, built to monitor the quality of the water in the Ajkwa River -
the conduit for tailings, or waste rock, from the mine.
Human-rights groups blamed the military, accusing it of deliberately
stirring up trouble so it could increase its influence in Papua. Freeport
security officials, suspicious that the laboratory had been specifically
targeted, have long wondered whether radical environmental activists may
have been behind the disturbances that left at least three people dead and
scores wounded.
In the end, at the company's request, the government stationed a
battalion-sized task force at the mine, built around a strong core of
well-disciplined Army Strategic Reserve (Kostrad) combat troops. Anxious
to ensure they were well looked after, Freeport spent $32 million on
building new barracks and other amenities in late 1996, and also set aside
an annual budget of $6 million to $7 million for ongoing support.
Over the past nine years, 75-85% of that money has been for in-kind goods
and services - housing, food, medical care and transportation. The
soldiers use Freeport's dining facilities, with the company paying the
food services contractor for an extra 850 people per sitting. The company
similarly reimburses medical expenses for soldiers treated at two modern,
well-equipped hospitals, something they would be unlikely to find in most
other parts of the country.
What leaves Freeport open to scrutiny is the remaining cash disbursements,
which are done through wire transfer to unit bank accounts where the
signatories are individual officers. Much of this money is for a monthly
per diem of $35 for each soldier and $50 for each officer to offset the
cost of living and working in a remote area. Privates and non-commissioned
officers, for example, can exhaust their entire month's salary making a
five-minute phone call to check on their wife and children living in
far-off Java.
One former Freeport security employee said it was decided early on not to
send the funds through the military's Jakarta headquarters because "it
would never have got to the guys on the ground, hence forcing them to
steal and extort for the supplemental money they need". Some local unit
commanders did not have bank accounts, relying instead on paymasters and
couriers. In other cases where they did have one, it was only used for
official military transactions.
For a long time, many refused Freeport's repeated requests for them to
open accounts in their unit's name, afraid of losing control of the funds.
Even the banks resisted. In fact it was only in late 2002 that the company
finally persuaded the officer corps to adapt the practice. "We constantly
monitored the payments to make sure the soldiers received it," recalled
the former employee. "The commander would have faced a revolt if he didn't
pay out because every soldier and policeman knew exactly how much he was
allotted."
Additional funds have also gone to the regional command in the provincial
capital Jayapura - a scheme that began under the now-retired Major-General
Johnny Lumintang, still regarded among Western diplomats and other
independent observers as one of Indonesia's ablest and cleanest officers.
Lumintang wanted to replace combat patrol posts with civil-affairs
personnel, but he lacked the funds to carry out the hearts and minds
programs needed to implement it. Freeport obliged.
The company has since financed numerous projects that have run from about
$90,000 to $150,000 a year. The money is paid directly to the regional
commander and, in one year for example, was used to buy new equipment for
a run-down military hospital in Jayapura, Papua's province capital. The
company has all along required a written program and a full costing of
materials and services, along with an on-site inspection in some but not
all cases.
A third financing category is the reimbursement of administrative and
logistics costs that are over and above normal expenses. Often this
includes establishing and maintaining communications nets, paying for
investigations and disciplinary actions and also for the use of the
military's aviation assets. The money, which never amounts to more than
$1,500 a month for each command, is wired to the regional army chief and
individual unit commanders.
Although Freeport has never denied paying the Indonesian military, it only
began disclosing the aggregate amounts in 2002-03 after the ambush deaths
of two American schoolteachers and their Indonesian colleague on the road
to the mine raised questions about the company's relationship with the
military. It continued to withhold details of individual payments,
however, which were later disclosed in embarrassing detail by Global
Witness, a London-based investigative organization that works to expose
links between natural-resource exploitation and human-rights abuses.
What wasn't reported in those findings was what the amounts were spent on,
even though that information must have been available as well. Those are
noted in the company's general ledger and also in much more detail in the
records of the firm's security department, made available to the US
Federal Bureau of Investigation (FBI) when it was called in to investigate
the ambush. They are now being scrutinized by investigators from the US
Securities Exchange Commission and the Justice Department, responding to
renewed complaints from the New York City comptroller, representing
shareholders of city pension funds.
While it might look suspect to outsiders, it is not clear how this
practice contravenes the United States' Foreign Corrupt Practices Act,
which invariably involves commercial contractual arrangements. The
military is not involved in any of that. If the issue is bribery, then
what are army commanders actually being bribed to do? After all,
protecting the mine is already part of a commander's duties and would
reflect badly on him if he failed.
In 2004, Freeport and the Trikora regional command signed an agreement on
arrangements to secure what the government has designated a "vital
national asset". That was followed on January 27 this year with a decree,
issued by the political coordinating ministry, which provides a specific,
but belated, legal basis for the corporate assistance provided to
government security forces guarding both the Grasberg mine and
ExxonMobil's gas fields in Aceh.
For all of the current hue and cry, the results of Freeport's largesse are
now readily apparent in the almost total absence of serious behavioral
problems over the past few years. "The soldiers we saw appeared much
better in discipline and dress than anything I've seen in Indonesia," said
one Western military officer who recently visited Timika as part of a rare
inspection tour. "The officers all looked like high-caliber people."
The inability of the army and the police to support their people in the
field had disastrous consequences during the bloody sectarian strife on
the eastern island of Ambon in the early 2000s. Forced to depend on local
communities to supply them with food and other essentials, whole units
disintegrated and joined forces with either the Christian or Muslim camps.
Thousands died in the fighting.
As with Freeport, the military is finding it difficult to live down a
reputation for human-rights abuse. Its critics still refuse to accept that
the army command had nothing to do with the killing of the schoolteachers
in the August 31, 2002, ambush. Brushing aside the FBI investigation and
the recent arrest of eight Papuan independence activists, media reports
continue to cast suspicion on "the military" - the inference being that
the institution itself was involved.
Investigators feel there may have been a degree of military involvement,
but only among low-ranking soldiers in the local district command who have
little to do with mine security. Three months before the surprise attack,
the command conducted an internal inquiry into a Papuan non-commissioned
officer who had sold 400 rounds of ammunition on the black market. It is
that case that is thought to have provided the FBI with valuable leads.
It is not known what happened to the ammunition, but the hundreds of
rounds expended in the 2002 shootings were starkly out of character with a
rag-tag, bow-and-arrow resistance force that normally doesn't have enough
bullets to fill a magazine. It is that and the military's reputation for
abuse that no doubt persuaded commanders they would be blamed no matter
what happened.
In a private conversation, former armed forces chief General Endiartono
Sutarto said he is still incensed over a Washington Post report that
wrongly implicated him in the ambush. In fact, Western officers credit
Sutarto with doing a lot to clean up the army in the three years he held
the post. Perhaps the best illustration of that success has been in Aceh,
where a peace agreement with the separatist Free Aceh Movement (GAM)
appears to be holding.
These days it is not only Freeport's mine that preoccupies military
planners as they look to improve Indonesia's eastern defenses and keep the
Papuan separatist movement in check. Before the plan was put on hold,
Timika was to be the brigade headquarters for a third Army Strategic
Reserve division, to be based in the western Papuan seaport of Sorong. The
two existing Kostrad divisions are both on Java.
As for Freeport, there is no question it received special treatment from
Suharto during his 32-year rule. But the president was clearly grateful
that the company took such a huge gamble on his fledgling administration
in the late 1960s, at a time when investing in then-impoverished Indonesia
- let alone far-off Papua - was a wildly risky venture.
As the years went by, the mine became the cornerstone of Suharto's eastern
development plan and Freeport's chief executive, James "Jim Bob" Moffett,
enjoyed unprecedented access, flying into Jakarta in his private Boeing
757 jet on regular visits. A big, larger-than-life Texan, Moffett would
leave invited Indonesian officials slack-jawed with his impromptu Elvis
Presley impersonations at staff gatherings.
But his roughshod style and a culturally taboo habit of loudly banging the
table when he was upset also made him a host of enemies. One rancorous
meeting with Moffett turned then-environment minister Sonny Keraf into a
life-long foe. Now in his new role as a member of the opposition
Indonesian Democratic Party for Struggle (PDI-P), Keraf also happens to be
the vice chairman of the parliamentary commission on the environment.
Another prominent critic is Amien Rais, a onetime presidential candidate
and founder of the National Mandate Party (PAN). Rais's anti-Freeport
rhetoric, which appeals to Indonesian nationalists in particular, goes
back to the Suharto days when he accused foreign resource companies of tax
evasion and other irregularities. He has now resurfaced, this time joining
the chorus over Freeport's relationship with the military.
After Suharto's fall in 1998, Moffett's visits tapered off sharply, in
keeping with a "no tall trees" policy he introduced to lower the company's
profile. One of the few occasions he has slipped into the country was in
late 2003, soon after a massive landslide in the Grasberg pit killed eight
Indonesian employees and led to a severe cutback in production. The
publicity was surprisingly muted, but Moffett wasn't happy.
Still, these have been halcyon years for Freeport, with copper prices at
an all-time high, gold not far behind and the company's share price
soaring to levels no one thought possible five years ago when political
risk was seen as a major drag on value. Grasberg's current reserves will
last until 2041 - but that's only based on annual replenishments. If the
company began an active exploration program again, they would probably be
considerably larger.
Although the company is portrayed in most media reports as a gold miner,
sitting as it does on one of the largest gold reserves in the world, it is
in fact a New York Stock Exchange-listed copper play that uses its rich
gold grades to offset the production cost of copper. That enables Freeport
to produce copper at 10 cents a pound, compared with the 50-60 cents for
most other mines around the world.
The Grasberg mine has produced 16.1 billion pounds of copper and 23.3
million ounces of gold net since it began production in 1988, shortly
after exhausting its initial discovery, which was first discovered by a
Dutch explorer in the 1930s. The mine's reserves are currently estimated
at more than 40 billion pounds of copper and 46 million ounces of gold.
It is no secret that Freeport ignored environmental concerns for the first
20 years. But then so did virtually every other mining company around the
world. Miners, at least in those days, were not instinctively sensitive
people. But little by little Freeport has had to learn not only about
lessening the impact of what it does on the environment, but also on
helping the Amungme and the Komoro and other local tribal communities
along Papua's southern coast.
Because it has a higher profile than anyone else, Freeport has been forced
to learn faster. Its executives acknowledge it has been a long and
difficult road. A scheme it initiated in 1997, for example, to provide 1%
of the mine's revenue to seven local tribal groups has been an unending
headache since its inception. But the company perseveres. These days, it
simply has no choice.
It is hoped by the time the entire Grasberg operation goes underground in
2012-14, Papuans will have become the core of the company work force,
rather than the minority. The closing of the 2-kilometer-wide open pit
will see daily ore output drop from 250,000 tonnes to about 160,000
tonnes. That also means fewer tailings flowing down the Ajkwa - as it has
done with full government approval since the beginning.
Freeport's riverine tailings deposition area makes for an ugly sight - a
gross acceleration of a process that occurs naturally with all other major
rivers plummeting out of the central highlands. Hemmed in on both sides by
man-made earthen levees, the gray expanse of ground-up waste rock covers
160 square kilometers and will eventually rise to 20-30 meters at its
highest point.
Most of the criticism about Freeport up to now has focused on this one
issue - without anyone ever mentioning that there is no other viable
method of disposal. Maintaining a tailings dam in the earthquake-prone
highlands, with its high rainfall, would invite disaster. Piping it down
into a lowland dam would have created a 100-200-meter high unstable mound
on swampy land that would have carried the risk of catastrophic release.
An alternative might be disposal at sea, the method used by Newmont in
North Sulawesi and also in its Batu Hijau mine on the island of Sumbawa,
east of Bali. But engineers say the Arafura Sea is so shallow, the
tailings would have to be piped more than 90km before reaching deeper
waters. Even then, there would be a risk of currents eventually depositing
the waste across Australia's Great Barrier Reef to the south.
The Ajkwa may be a mess, but it is only one river in the vastness of a
province that is three and a half times the size of Java. Lost in all the
bad publicity has been Freeport's successful efforts at ridding the area
of malaria and the world-class medical facilities it provides. The company
has also shown that with the addition of natural and artificial nutrients,
anything can grow on the tailings - from pineapples and vegetables to
sago, a lowland Papuan staple, and oil palms.
In a sign of what Freeport is up against, Environment Minister Rachmat
Witoelar was recently forced to acknowledge that a statement he issued on
February 13 saying there were "preliminary indications" the tailings were
toxic was based on December's New York Times report - and not on an
investigation now being conducted by his own ministerial team. Their
scientific findings are due some time next month.
While it appeared the ministry's 25-man team was responding to the latest
outcry, it has had unrestricted access to the mine site since last year
when Freeport elected to join a volunteer corporate monitoring program,
along with a collection of other foreign resource companies. Last week the
company served the team an outdoor lunch including fish and shrimp from
the river and fruit and vegetables grown on the tailings.
The company insists that proper management does a lot to minimize the
leaching of residual amounts of copper, which amount to about 14% of what
was in the ore before it went through the mill. While higher levels of
copper are found in fish and shellfish, the company insists it is within
internationally recognized safe health limits. Indeed, one of the
company's current concerns is the depletion of fish stocks caused by the
increasing number of people now fishing in the river estuary below the
deposition area.
The tailings that end up around the mouth of the estuary and settle along
the seashore are now being used to grow mangroves, which in turn are
creating new ecosystems. Long-term, Freeport may be proving that with
careful thought and constant experimentation the environment can rebound
from the impact of mining. And that's not what a lot of its blinkered
critics want to hear.
-- John McBeth is a former correspondent with the Far Eastern Economic
Review. He is currently a Jakarta-based freelance journalist.
-- (Copyright 2006 Asia Times Online Ltd. All rights reserved.
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