[Kabar-Irian] Irian News - 3/23/06 (Part 3 of 3)
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BBC
Mine hits deep seam of Papua unrest
Thursday, 23 March 2006, 15:00 GMT
By Tim Johnston, BBC News, Jakarta
When protesters killed five members of the Indonesian security forces in
the remote and restive province of Papua last week, it focused
international attention on a region with long-standing grievances.
Analysts are warning that the Indonesian government has a limited window
of opportunity to do something about the unrest.
Although the demonstrations were nominally spurred by objections to the
world's largest copper and gold mine, operated by the US-based Freeport
McMoRan, the roots of Papuan discontent are deeper and more intractable.
Papua has a distinct identity and political history. Dutch colonial forces
granted Papua self-rule in 1961, but after the Dutch pulled out a year
later, Jakarta annexed the province without honouring the agreement.
In 2001, the government recognised this by granting the province increased
autonomy, but it has had little tangible benefit on the ground.
Losing faith in the political process, many activists believe direct
action is the only way to bring their concerns to the attention of
Jakarta.
"Many of the demonstrations had long been planned by student groups linked
to the independence movement, but the Freeport protests also reflected
broader frustration and anger over the role of the military in Papua, lack
of justice for past abuses and the failure of special autonomy to improve
the welfare of the people," the Brussels-based International Crisis Group
said in a report released this week.
Tired of waiting
The list of Papuan complaints has been growing steadily over the years.
People in the province feel that at best they are neglected, and at worst
they have been ruthlessly exploited by successive Jakarta governments only
interested in taking their gold, their copper, their timber and their land
and giving nothing in return.
The brutal and heavy handed tactics of the Indonesian security forces and
the lack of any reliable system of redress have also provided a constant
source of aggravation, and a constant source of recruits to the ranks of
the rebels. The authorities are aware of the problem and have taken some
steps: after the recent police deaths, they took away the guns of 40
members of the paramilitary mobile police brigade to prevent retribution.
Papuans also feel let down by the government of President Susilo Bambang
Yudhoyono. In his election campaign in 2004, Mr Yudhoyono promised to
tackle long-standing Papuan concerns, a promise that won him an
overwhelming share of the vote in the province.
But Papuans say he has not delivered.
They say his administration has ignored the Papuan People's Council, which
was set up late last year as an interlocutor to ease tensions between
Papuans and the central government. They say that they are tired of
waiting for change that never comes and that now is the time to for them
to push it onto the agenda, both within Indonesia and internationally.
Asylum embarrassment
Papuan nationalists are becoming much more adept at attracting
international attention to their concerns. They know that the topic of
gold mining, with its visceral if frequently mistaken associations with
rapacious greed, has a broad and incendiary appeal in the liberal West. By
coupling their economic grievances with Freeport with accusations of
environmental damage, the appeal has been given extra impetus.
A prominent Papuan nationalist, Edison Waromi, says that the recent
arrival of 43 Papuan asylum seekers in Australia was designed to bring
attention to the problems in the province. The boat they arrived on
carried a banner saying in English: "Save West Papua people souls from
genocide, intimidation and terrorist from military government of
Indonesia."
On Thursday, the Australian government granted all but one of the group
temporary protection visas, an indication that their fears of the
Indonesian authorities may have foundation. It is a clear embarrassment
for South East Asia's largest democracy and a country that is trying to
re-establish its humanitarian credentials after years of repression.
Beneath Indonesia's newly restored democracy runs a powerful vein of
nationalism. What the nationalists fear is that Papua will become another
East Timor.
After almost a quarter of a century of Indonesian rule, international
pressure forced Jakarta to hold a referendum on Timorese independence, and
in 1999 the land that Indonesians once called their 27th province voted to
break away, leaving a deep wound that for many has never healed.
Nationalists accuse the West of orchestrating the plan to "steal" East
Timor, starting with a mass campaign by human rights activists and ending
with the UN-organised referendum on independence.
The subject is still so raw that almost all visiting dignitaries, from US
Secretary of State Condoleezza Rice earlier this month to UK Prime
Minister Tony Blair next week, are required to make a statement that they
are committed to "the unitary state of Indonesia" - shorthand for a
declaration that they don't support independence for Papua or any other
part of the country.
The Indonesian government has to perform a difficult balancing act in many
dimensions.
It needs to move towards addressing Papuan concerns while trying to keep
inflamed Indonesian nationalist sentiments in check; and it needs to be
seen to be taking concerns over Freeport into account while avoiding being
seen unilaterally to renegotiate the company's licence, and thus
alienating vital foreign investment in the country.
Although the government has been tinkering with solutions to specific
Freeport-based issues, it has done little to address the underlying
sources of discontent in Papua. The International Crisis Group says that
the most important element of any solution would be constructive dialogue
with a representative Papuan body.
It says that although it would currently be possible to revive the Papuan
People's Council as a dialogue partner, people are running out of
patience, and that will not hold true indefinitely.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
New York Times
3 Killed, 20 Injured in Mudslide at Indonesian Mine
By Raymond Bonner and Peter Gelling
Published: March 23, 2006
Jakarta, Indonesia, March 23 — Three people were killed and more than 20
injured when a wall of mud ripped through a cafeteria operated by the
American mining company Freeport-McMoRan on the remote province of Papua,
company and Indonesian officials said today.
The landslide, which occurred at 1 a.m., began on a mountain above a
service area, but officials said that it was not caused by Freeport's
mining activities in Papua, an area shrouded in rainforests and prone to
earthquakes and heavy rains.
The incident was the latest in a string of troubles for Freeport, based in
New Orleans, which mines massive copper and gold deposits in Papua and has
been the object of violent protests in recent days.
Hours after the landslide, the government released a report, weeks in the
works, critical of Freeport's environmental practices at the mine, which
by Freeport's own estimates will generate some six billion tons of waste
before operations are through.
"We want Freeport to start following the rules here," the environment
minister, Rachmat Witoelar said. "Freeport shouldn't be its own country
within a country. There are 500 other companies like Freeport here that
follow the rules."
The investigation, carried out by a team of 24 independent experts, found
large amounts of waste were being dumped into what were once a system of
pristine Papuan rivers, almost 700,000 tons a day.
Mr. Witoelar said Freeport needed immediately to set up an alternative
method for disposing of the waste, using safer and more efficient
technology.
A Freeport spokesman, Siddharta Moersjid, said the company would cooperate
with the Indonesian government. "We will continue to work with the
ministry as we have the same common objective in trying to minimize the
impact to the environment from our activities," he said in a telephone
interview.
The mine's waste disposal method, the company says, has been approved by
provincial authorities, and that other means, like construction of a
pipeline, would be too costly and prone to accidents.
Mr. Witoelar said Freeport has no legal permit to dispose of its waste in
the rivers. The mine is co-owned by Freeport and Rio Tinto. Freeport has
long occupied a special place in Indonesia. It was one of the first major
foreign investors after independence and is one of the country's largest
taxpayers. But, as Mr. Witoelar suggested, it has sometimes acted as a law
unto itself, entering into arrangements with the country's top civilian
and military officials that have brought it under increasing scrutiny.
It is currently being investigated by the United States Justice Department
for possible violations of the Foreign Corrupt Practices Act, and by the
Securities and Exchange Commission for possible violations of security
laws.
The investigations were triggered in part by reports in The New York Times
that the company made more than $20 million in payments to individual
military officers from 1998 through 2004.
The company has also been criticized by many Papuans for not adequately
sharing the mine's wealth with the local people. In the last week, Papuan
have protested to demand that the mine be closed, demonstrations that
resulted in the deaths of four Indonesian security officials.
The Indonesian Government does not allow journalists to report in the
province, without special permission, which has rarely been granted in
recent years.
An Indonesian environmental organization, Walhi, said Freeport's waste
disposal system has been illegal since 1990 under Indonesian law. The
group also doubted the government's recent investigation would have much
impact.
"We think it is a waste of time," the group's deputy director, Farah Sofa,
said in an interview. "Freeport has long been on the wrong side of the
law. There needs to be direct consequences for the company's actions."
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
The Jakarta Post.com
National News
March 23, 2006
Activists doubt Freeport audit
Tb. Arie Rukmantara, The Jakarta Post, Jakarta
The government's plan to announce the results of an environmental audit of
PT Freeport Indonesia's massive Grasberg mine on Thursday has been greeted
with skepticism by activists, who say the report will likely be a
whitewash.
Environmentalists said Wednesday the report by an independent team for the
State Ministry for the Environment would be meaningless unless it ordered
Freeport to pay compensation for the environmental damage the American
company caused to the area.
"We expect the government to say whether what the company did is
classified as merely pollution or (more serious) environmental
destruction," said Indro Sugianto of the Indonesian Center for
Environmental Law.
Indro said the environment ministry needed to be transparent in its
dealings with Freeport and not be afraid to take legal measures against
the company even if it risked the multi-million dollar working contract
the company had signed with the government.
"We will fully support the government should it expose sensitive data in
order to take Freeport to court for environmental crimes," Indonesian
Forum for the Environment executive director Chalid Muhammad said.
"But if they only present scientific data on the company's operations,
this would be a setback and one of the saddest days for Mother Nature,"
Chalid said.
State Minister for the Environment Rachmat Witoelar told The Jakarta Post
on Wednesday the report was made by a team of 21 environmental experts
approved by the ministry.
The survey was part of the ministry's annual Program for Pollution
Control, Evaluation and Rating (PROPER) audit. The scheme surveys and
ranks more than 500 industries in the country on how they comply with
environmental laws.
Rasio Ridho Sani, a senior official at Rachmat's office, said the team had
taken 118 samples from eight sites in the company's 3,000 square-kilometer
operation to test the conditions of air, sediment, water and waste.
However, Chalid said the PROPER findings only presented data indicating
how much companies had complied with the country's environmental
regulations.
Chalid said it was obvious Freeport had harmed the environment at
Grasberg. During its operations, it had dumped three billion tons of
mining waste into rivers, which had killed scores of animals and plants at
its tailing disposal area, he said.
The government should stop talking about whether the company had complied
with environmental laws, he said.
"The environment ministry has sufficient data on Freeport's violations.
Therefore, it should immediately announce legal measures to make Freeport
responsible for what it has done for the past 30 years," Chalid said.
Siti Maimunah of the Mining Advocacy Network said the environment minister
should not announce the survey results, which were only pollution
window-dressing by the government and mining companies.
"The environment ministry is not a rating or market research company, it
is a government institution that is mandated to protect the country and
its people," she said.
Freeport spokesperson Siddharta Moersjid said his company had nothing to
worry about the audit results.
"We have given full access to the environmental audit team, allowing them
to inspect all facilities at the mining sites," he said. "Of course, we
expect the best result."
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
The Jakarta Post.com
Headline News
March 23, 2006
The Freeport case should not be oversimplified
Jalal, Jakarta
Albert Einstein once said that everything must be explained in a simple
but not simpler way. The advice of this physics genius is apparently
ignored by most observers of the Freeport issue, as oversimplification
continues to dominate their comments.
If we are supposed to seek the best solution to this problem,
oversimplification should, of course, be avoided because it will reduce
our capacity to understand the actual complexity of the matter. Once we
fail to be aware that the issue is complex, the settlement proposed will
also be too simple. In fact, as indicated by many cases, for every complex
problem it seems there is always a simple solution, although in fact it is
often wrong.
The first thing oversimplified is that the Papuan community is seen as a
single entity. In reality, the ethnic groups and languages of the Papuans
are among the world's most diverse. Around the Freeport mining area there
are seven tribes, with Amungme and Komoro having the most extensive
communal property rights. As Papuan protests against Freeport have been
lodged in various places, including those outside Papua, it should be
realized that diverse ethnic entities have joined anti-Freeport demos.
No less important than the ethnic side is the aspect of interests. In this
case, it is unwise to assume that there has been only a single interest
concerning Freeport and lying behind all the rallies against Freeport.
Whoever probes into the issue for satisfactory resolution should be
capable of finding out the diversity of entities involved in the demos and
the presence of those mustering anti-Freeport forces.
Another manifestation of oversimplification is the notion that the entire
Papuan community is victimized by the existence of Freeport, so that all
Papuans want to get rid of the mining company. While some Papuan groups
have certainly enjoyed Freeport's benefits, others are dissatisfied with
this firm. Its social programs are one of the biggest resources allocated
in Indonesia and with the relatively small population, the per capita
benefit is definitely greater, assuming that the program is run in an
honest, equitable manner.
Anyway, Papuan people are Freeport's stakeholders. But they are made up of
primary and secondary stakeholders. Those relatively closer to the mining
location are primary stakeholders and those farther away secondary ones.
The treatment of both groups should naturally be different. Stakeholders
are also distinguished as those with valid claims and those with invalid
ones. Valid claims should indeed be responded to and their settlement
later sought. Invalid claims also need a proper response with the
explanation as to why they cannot be followed up on.
Still, there remains an oversimplification of Freeport, which is always
regarded as a company with poor social and environmental performance. As a
firm operating in the Indonesian territory, Freeport is certainly obliged
to abide by various government provisions on environmental quality
standards, which is to be officially monitored.
Sadly, in the social sphere, the government has no such minimum
performance rules. It may be due to the greater difficulty in formulating
social performance, but as indicated by different corporate social
responsibility initiatives, the creation of these standards is possible.
As a multinational company, relying on the Indonesian government's minimum
provisions is of course unacceptable. It is appropriate for Freeport to
adopt one or several performance standards. The various independent audits
Freeport has undergone will certainly give an idea of this effort. The
copious amount of information produced shows that Freeport has attempted
to improve such performance.
Regrettably, the database on the local community's initial conditions is
very limited, and so it cannot be utilized to measure social performance.
Consequently, other gauging methods have to be devised. In principle, the
quality of Freeport's social and environmental performance should be
appraised fairly, with maximum transparency in terms of evaluation
standards, methodology and results. In this way, we can avoid the
haphazard conclusions.
In judging the government, the oversimplification is that it is a single
entity and favors Freeport more than Papuan people. Public policy
literature has pointed out that the government can never be seen as one
unit. It is an organization of different interests and the relevant public
institutions should reveal their interests. In order to understand the
whole problem the interests of individuals within this body may even have
to be examined.
The government's "favor" for Freeport can obviously be understood in view
of the strategic significance of Freeport and the mining industry as well
as foreign investment in general. Freeport has brought about great
economic advantage though still it may not be considered big enough. The
mining industry, apart from the many emerging issues, considerably
contributes to state revenue, manpower and the general public through its
useful products.
If Freeport's operation is ended -- as is widely demanded by protesters --
the government will face a lot of problems including possible
international arbitration and a worsening investment climate, besides the
loss of benefits so far gained and (still unevenly) distributed to the
society at large. As a result, the public will also suffer even more.
In a situation in which additional investment is badly needed, the
government will definitely refuse the protesters' demand to stop
Freeport's operation. However, it has to examine the performance of
Freeport in various aspects, which should be conducted along with
competent and well-motivated private companies, and still avoid
oversimplification. The outcome of this appraisal ought to serve as the
basis to enhance Freeport's performance as expected by all stakeholders.
-- The writer is a community development and relations expert and is a
founder of the soon to be launched CSR Indonesia.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Miner Freeport hit by double-whammy in Indonesia
Thu Mar 23, 2006 1:16 PM ET
By Steve James
New York (Reuters)
U.S. mining giant Freeport McMoRan Copper & Gold Inc., a recent target of
protesters in Indonesia, was hit with more bad news on Thursday when a
landslide killed three workers there and a government study criticized
some of its environmental practices.
"Obviously this is a difficult time for us, but we are working to resolve
all the issues," spokesman William Collier told Reuters.
The New Orleans-based company, which has been mining in Indonesia for
decades, has been in the headlines for a variety of reasons recently since
a fatal landslide at its Grasberg mine in Papua in 2003 disrupted
production for nearly a year.
Grasberg, run by Freeport's Indonesian unit, has been a lightning rod for
criticism and has been at the center of sometimes violent demonstrations
in recent weeks.
Some environmental groups charge its waste pollutes rivers and streams and
kills wildlife. However, the Indonesian government report, although it
highlighted some problems over waste storage and called for stricter
measures in managing acid water from the mine, did not mention any
large-scale damage. It did say that tailings, or refuse after ore has been
processed, had flowed through the nearby Ajkwa river.
The Grasberg pit, about 2,200 miles east of Jakarta, has also been a
source of controversy over the share of revenue going to Papuans, the
legality of payments to Indonesian security forces who help guard the
site, and whether such an operation should be run by a foreign company.
Four policemen and a soldier were killed last week in the Papuan capital,
Jayapura, in clashes with protesters demanding closure of the mine, one of
a series of demonstrations in recent weeks across Indonesia that have
criticized Freeport.
Thursday's mudslide came from a mountain above a service area adjacent to
the pit and killed three contract workers. Mine production was not
affected, company spokesmen said.
Spokesman Collier noted that, despite everything that has happened in the
last few months, Freeport only lost three days of production at Grasberg.
Of the Indonesian environment ministry report, he said: "They acknowledged
the effectiveness of our environmental management in some areas, but they
also recommended improvements in others areas.
"We continue to improve our environmental efforts and have a very close
relationship with the ministry."
On the recent protests, some of which involved native tribesmen armed with
bows and arrows, as well as environmentalists, students and some illegal
gold miners, he said: "They have been characterized in the press as being
'anti-Freeport,' but there are a number of issues."
These include not only environmentalists, but a pro-Papua independence
movement and groups opposed to the Jakarta government.
"It is a complicated situation and clearly other agendas are involved,"
said Collier.
Mining analyst Victor Flores, of HSBC Securities, said that in the
long-run, such negative events would likely have little effect on
Freeport's operations.
"The landslide is regrettable, but it didn't affect operations. Mining is
an industry where, unfortunately, people get killed," he said.
He noted that at the time of the 2003 landslide in which eight workers
died in the Grasberg pit itself, Freeport's stock was not hurt too badly.
On Thursday, it was actually up $1.04, or 2.01 percent, at $52.72 in
afternoon trading on the New York Stock Exchange.
The environmental issue was more problematic.
"I would hope it doesn't indicate some sort of pattern," said Flores,
noting another U.S. gold miner, Newmont Mining Corp. (NEM.N: Quote,
Profile, Research), recently settled with Jakarta over allegations of
pollution.
"It appears that some environmental people may be on a crusade. (But) at
the end of the day, Freeport has had a close relationship with the
Indonesian government, which has been profitable for both of them.
"Freeport has been operating in the country efficiently for many years and
I don't see it changing," he added.
-- (Additional reporting by Yoga Rusmana, Telly Nathalia and Muklis Ali in
Indonesia)
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
The Jakarta Post.com
Latest News
Freeport told to improve environmental controls at Papua mine
Jakarta (AP)
Indonesia's government Thursday threatened legal action against U.S.
mining giant Freeport unless the company improved the environmental record
of its massive gold mine inPapua province.
Environment Minister Rachmat Witoelar said that the mine was "required to
improve the management" of waste from the mine, known as tailings, to
"minimize the effect on the environment."
He said there were fears the tailings could start piling up and possibly
trigger landslides or flooding.
"We will give them a reasonable amount of time .... between two and three
years," Rachmat said.
He said that if the problems remained unresolved then his ministry would
file a lawsuit against the mine, which is operated by owned by a local
unit of Freeport-McMoRan Copper & Gold Inc.
Rachmat made the declaration after receiving a report by a team of
independent experts tasked with assessing whether the mine was damaging
the environment.
He said the mine had committed various violations, of which the tailing
issues was the most pressing.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Indonesia Threatens Freeport With Lawsuit
By Zakki Hakim Associated Press Writer
March 23, 2006, 6:37AM
© 2006 The Associated Press
Jakarta, Indonesia — Indonesia's government Thursday threatened legal
action against U.S. mining company Freeport unless the company improves
the environmental record of its massive gold mine in Papua province.
The announcement follows days of demonstrations against the company, some
of which have called on the government to take over the Grasberg mine that
is run by a local unit of New Orleans-based Freeport-McMoRan Copper & Gold
Inc.
"Freeport must act not like it is a country within a country," Environment
Minister Rachmat Witoelar said. "It must obey the law of the country and
take into account the feelings of the people."
Also Thursday, a landslide slammed into a cafeteria at the mine, killing
three Indonesian workers and injuring four others, the company said. The
cause of the accident, which did not affect production, was under
investigation, said Freeport spokesman Siddharta Moersjid.
Witoelar said Grasberg would be given between "two and three years" to
improve management of the millions of tons of waste ore, known as
tailings, that are pumped out of the mine each year.
Reacting to the announcement, Moersjid said the company "has the same
objective as the Ministry of Environment, which is to minimize the impact
of our mining operations to the environment."
He said the mine, which has earned billions of dollars for the company
since it began operations in the province in the 1970s, would continue to
cooperate with the ministry.
The environment minister said there were fears that tailings could start
piling up and possibly trigger landslides or flooding in communities
living close to the mine.
Witoelar said if the problems remained unresolved, his ministry would file
a lawsuit against the mine, similar to the one that was pursued against
fellow U.S. miner Newmont Mining Corp. over alleged pollution at its mine
on Sulawesi Island.
Witoelar said the mine had committed various violations, of which the
tailing issues was the most pressing.
Some of the recent protests against Freeport have been by nationalists
angry that a U.S. company is profiting by digging up gold in a poor
province of Indonesia. Papuans demanding a separate state have also
targeted the company.
Last week, five security officers in Papua were bludgeoned to death during
an anti-Freeport protest. Last month, the company suspended production at
Grasberg for several days after protesters demanding the right to mine its
waste ore blockaded the facility.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Crickey.com.au
Rio flies under the radar on West Papua
Michael Pascoe
-- If Rio Tinto wants to live up to the sustainability rhetoric it likes
to spout, it has some hard decisions to make about West Papua
Date: 23 March 2006
Mention Rio Tinto's ability to fly under radar on its significant West
Papuan interests in Crikey one day, The SMH gives a perfect example of it
the next. Today's second SMH editorial goes where the Australian
Government isn't game to tread – the international scandal of Indonesia's
West Papuan colony in general and the massive Grasberg mine in particular:
The giant Freeport gold and copper mine is carving a scar so vast and deep
into the remote forests of Papua that it will soon be visible from space.
Downstream, a swelling bruise of a billion tonnes of mine waste has
rendered wetlands inhospitable for aquatic life. The stupendous profits
generated by the world's largest copper and gold mine largely pass the
indigenous Papuans by. That the mine has become the violent flashpoint in
their dogged campaign for independence is unsurprising. Democracy in
Indonesia has, rightly, raised expectations for accountability. The
reckless polluters of Freeport, the abusive military units stationed in
Papua and the civilian government in Jakarta are on notice: the bad old
days of impunity are over.
I don't know about the SMH leader writer's conclusion there and the
damning of Freeport might be a little strong, but you catch the drift.
What's surprising though is that such a prominent mention of Grasberg
should omit the key role played by Rio Tinto – the London headquartered
but still heavily Australian influenced resources giant.
Rio is the marriage of Britain's RTZ and Australia's CRA. The CEO is an
Australian, as are two of the non-executive directors. And Rio is
Freeport's joint venture partner in the Grasberg mine.
Rio sold its considerable holding in Freeport two years ago, but it's
certainly holding on to its rich Grasberg stake.
Its performance there contrasts very sharply with BHP's dealing with Ok
Tedi over the boarder in Papua New Guinea. Rio generally tries to flick
all responsibility for what's going on in West Papua to Freeport –
something made a little easier by no longer being a major shareholder in
Freeport, but still impossible given the realities of its investment.
If Rio wants to live up to the sustainability rhetoric it likes to spout,
it has some hard decisions and much harder work to do in West Papua
instead of happily hiding behind Freeport and avoiding the editorial
writers' occasional arrows.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Sydney Morning Herald
Jim Bob rakes in millions from Papua goldmine
By Jamie Freed
March 24, 2006
Australia's top mining executives earn millions of dollars a year but,
apparently, a lot less than some of their American counterparts.
Freeport McMoRan Copper & Gold, owner of the troubled Grasberg mine in
Indonesia's Papua province, paid its two top executives a combined $US83
million ($115.7 million) last year.
Freeport's annual earnings rose to $US995.1 million from $US202.3 million
last year due to record commodity prices. But the New Orleans company has
since faced heavy criticism of its environmental and security practices in
Papua.
Freeport's colourful chairman, James "Jim Bob" Moffett, pocketed $US47
million, while chief executive Richard Adkerson was paid $US36 million,
according to filings made to the US Securities and Exchange Commission
yesterday.
Mr Moffett's base salary was $US2.5 million but he received a $US19
million bonus, $US21.5 million worth of stock options and various other
forms of compensation to take the total to $US47 million.
By comparison, BHP Billiton chief executive Chip Goodyear received a $US5
million salary package in 2005, while Rio chief executive Leigh Clifford
earned $US6.7 million.
BHP has a market value of $US102 billion, making the diversified resources
behemoth 10 times as large as Freeport, which is a one-mine company worth
$US10 billion. Mr Goodyear served as Freeport's chief financial officer in
the mid-1990s before joining BHP in 1999.
Freeport's Grasberg mine is the biggest goldmine in the world and the
second largest copper mine. Rio sold its 13 per cent stake in Freeport for
$US882 million in March 2004 but has a 40 per cent interest in Grasberg's
copper and gold reserves discovered after 1994.
A detailed report in The New York Times last year said Freeport has paid
local military and police at least $US20 million for questionable purposes
since 1998 and allowed waste to seep into surrounding groundwater.
The problems have intensified in recent weeks. Two people were killed and
four others injured in a landslide yesterday, according to wire reports.
The Indonesian Government has given Freeport two to three years to fix the
environmental problems at the mine.
Additionally, four security officers were killed and dozens of
demonstrators injured in a protest at the mine earlier this week.
Despite the troubles at Grasberg, Freeport said Mr Moffett's $US47 million
compensation package was justified because he "has been and continues to
be instrumental in fostering our company's relationship with the
government of Indonesia".
Freeport added Mr Moffett was a talented geologist and understood the
"important issues pertaining to our work with the local people in Papua".
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
mongabay.com
Home Depot, Lowe's selling illegal wood from Papua New Guinea - Report
March 23, 2006
Consumers in the United States are being mislead as to the origin of
merbau hardwood flooring being sold by Home Depot and Lowe's. According to
a new report published by the Environmental Investigation Agency and their
Indonesian NGO partner Telepak, such timber is coming from the forests of
Indonesia's remote Papua Province, where 80 percent of logging is
estimated to be illegal.
"Leading retailers, including The Home Depot and Lowe's, and the flooring
brands they market, including Armstrong, are making false environmental
claims while selling merbau flooring which they cannot prove comes from
legal sources," the report states. "While manufacturers and retailers
typically claim to buy timber only from carefully managed forests, their
suppliers openly admit to using merbau from unknown sources in Papua,
where powerful smuggling syndicates drive massive illegal logging. None
could prove that the merbau on their shelves was legal."
The Environmental Investigation Agency based its report on undercover
investigations into the suppliers of U.S.-based manufacturers and
retailers. The group offers a guide on how to avoid illegal timber.
A release from the Environmental Investigation Agency follows.
--------------------------------------------------------------------------------
U.S. Consumers Duped into Buying Timber Stolen from Papua's Precious
Rainforests
Consumers of merbau hardwood flooring are being misled by leading U.S.
retailers into buying timber from the forests of Indonesia's remote Papua
Province, where 80 percent of logging is estimated to be illegal.
The revelations are made in a new report published today by the
Environmental Investigation Agency and their Indonesian NGO partner
Telepak, entitled Behind the Veneer. The report lifts the veil on the
flooring industry and shows how leading retailers, including The Home
Depot and Lowe's, and the flooring brands they market, including
Armstrong, are making false environmental claims while selling merbau
flooring which they cannot prove comes from legal sources.
EIA/Telapak gathered environmental policy information from manufacturers
and retailers and conducted undercover investigations into their
suppliers. They discovered that while manufacturers and retailers
typically claim to buy timber only from carefully managed forests, their
suppliers openly admit to using merbau from unknown sources in Papua,
where powerful smuggling syndicates drive massive illegal logging. None
could prove that the merbau on their shelves was legal.
The Home Depot, the world's largest home improvement chain, claims to
"trace the origin of each and every wood product on our shelves" and "know
item by item . . . where our wood products are harvested" (HD website).
The company's wood purchasing policy also stated in 1999 that it would
"eliminate wood purchases from endangered regions of the world by the end
of 2002". Lowe's states it will "aggressively phase out the purchase of
wood products from endangered forests." (Lowe's website)
Alexander von Bismarck, campaigns director at EIA said "Although suppliers
and retailers of merbau flooring are not themselves breaking the law, they
are profiting from an illegal trade and are misleading their customers
into buying products made from stolen timber."
"These companies need to stop duping their customers and must take urgent
steps to ensure the legal origin of their wood."
Illegal logging is rife in Papua, an area recently dubbed 'the Garden of
Eden' by international scientists. In January 2005 alone, enough merbau
was illegally exported to produce flooring worth an estimated $600 million
at western retail prices. Despite recent enforcement efforts, illegal
merbau is still leaking into the market through international smuggling
syndicates. These syndicates collude with the Indonesian military and
police to exploit and intimidate local communities into accepting less
than $20 for a cubic meter of merbau. The same timber is worth nearly
$3,500 a cubic meter when sold as flooring in the U.S. market.
Arbi Valentinus, head of forest campaign at Telapak, said, "Americans
would be appalled if they knew that the wood used to make their flooring
had been stolen from the poor, indigenous communities of Indonesia's Papua
Province."
"Ultimately, the government should safeguard consumers by preventing
retailers from selling products made from illegaly sourced timber.
However, despite repeated promises to act, no law has been enacted,
putting the responsibility on consumers to take action and stop buying
merbau products that fuel illegal logging."
To assist consumers, EIA/Telapak have produced a guide on how to avoid
illegal timber, The guide highlights the issues behind illegal logging,
explains common strategies manufacturers use to mislead consumers, and
provides advice on how to guarantee that the timber consumers buy is
legal.
Behind the Veneer can be downloaded from EIA's website:
http://www.eia-international.org/campaigns/forests/reports/
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
MarketWatch.com
Indonesia, China's CNOOC agree to adjust LNG prices
Last Update: 6:19 AM ET Mar 23, 2006
Jakarta (MarketWatch) -- Indonesia and CNOOC Ltd. (CEO), China's largest
offshore oil producer by output, have agreed to adjust prices in a major
long-term deal to supply liquefied natural gas to the Chinese province of
Fujian, a senior government official said Thursday.
The deal to supply LNG from the Tangguh project, located in West Papua
province, is one of two long-term supply contracts that China has signed
recently. The other is a deal for LNG from Australia's North West Shelf
development.
"We have completed our talks on the sale and the ceiling price of LNG from
Tangguh to China," Kardaya Warnika, chairman of upstream oil and gas
regulatory agency BP Migas, told reporters.
Warnika didn't confirm if prices have been adjusted upwards.
The agreed price adjustment will take effect after the two governments
officially approve the deal, Warnika said, without providing a specific
timetable.
Indonesia has been seeking to raise the maximum price of crude oil used to
determine the ceiling price of LNG in the deal, BP Migas said previously.
Under the terms of the deal, the contracted price of LNG will remain at
the level reached when global crude prices cross the crude price ceiling,
even if actual crude prices continue to surge beyond that level.
Oil industry sources told Dow Jones Newswires that CNOOC has agreed to an
increase in the ceiling price of crude to $40-$45 a barrel from the
current $25/bbl - a hike of 60%-80%.
Indonesia, the world's sixth largest natural gas producer, signed an
agreement in July 2004 to sell 2.6 million metric tons of LNG annually
from 2008 to China's Fujian province for 15 years from the Tangguh
project.
The Tangguh project is operated by a consortium led by BP PLC (BP), which
holds around a 50% interest. The rest of the consortium comprises Japanese
investors.
LNG sales from the project require the approval of the Indonesian government.
Analysts say Indonesia is trying to increase its gas sales due to
perceptions that recent deals haven't assured sufficient revenue to
support the development of various gas projects.
-- By Deden Sudrajat, Dow Jones Newswires
-- Edited by George Bernard and Ryan Woo
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