MAC: Mines and Communities

Troops to Stay at Freeport's Papua Mine

Published by MAC on 2004-03-04

Despite evidence that the Indonesian army killed three teachers working for Freeport-Rio Tinto at the company's huge Grasberg mine in West Papua two years ago (see related story), the troops are to stay. Meanwhile the mining company has quietly re-employed a former mine-safety officer whose job was also "terminated" two years ago as part of a so-called "localization" programme. The officer's task will be to stabilise the pit walls that collapsed last October, killing seven miners and injuring others.

Contrary to assertions in the article reproduced here, this disaster was neither the first nor last to afflict this hugely damaging mine (see Major disaster strikes Freeport; Corporate Killing at Freeport and Yet another pit fall).

Troops to Stay at Freeport's Papua Mine

Far Eastern Economic Review

Issue cover-dated March 04, 2004

The Indonesian armed forces have quietly dropped a plan to pull a 550-strong task force out of a giant United States-operated copper-and-gold mine in Papua province. The turn-around came at the urging of army chief of staff Gen. Ryamizard Ryacudu and underscores his difficult relationship with armed-forces commander Gen. Endriartono Sutarto, according to sources close to the military. Sutarto announced in November that he was seeking government approval for the troop withdrawal, apparently because he no longer wanted the army to be perceived as a mercenary force in the pay of foreign companies--even if mining contracts give the military the right to protect national assets.

Louisiana-based Freeport McMoRan provides the military with about $6 million a year to protect its high-altitude Grasberg mine, but the company insists that about 80% of that goes toward food, medical and other welfare expenses.

Meanwhile, Freeport has re-hired former chief mine-safety officer John Kaylor to advise on stabilizing the Grasberg pit following landslides in October and December that have disrupted operations. Kaylor's job was terminated about two years ago as part of a localization programme and he had been working for the U.S. Interior Department in Washington. The landslides were the first Freeport had experienced in 15 years of mining at Grasberg. Kaylor was well known at Freeport for his no-nonsense approach to safety issues.

This linked article reports on Indonesian Government plans to maintain the militarization of foreign owned mining and oil projects in Indonesia. It also acknowledges the role of foreign companies in generating problems and hostility.

Government Asked the Military to Continue Maintaining Security as the "Third Ring"

March 1, 2004

The government had asked the military to continue maintaining security as the "third ring" around vital assets over the next year or two, as the police carry out internal consolidations that will eventually allow them to take over the task of security. It was stated by Minister of Energy and Mineral Resources Purnomo Yusgiantoro.

"President Megawati Soekarnoputri has agreed to keep the military in the third ring during this transition period," he said as quoted from the Jakarta Post recently.

He said that if this three-layer security system was implemented, major mining companies such as Caltex, Beyond Petroleum and ConocoPhilips would be more willing to invest in the future exploration of new oil fields. "They have been reluctant to carry out exploration because of the security uncertainties."

The government would increase security at all vital projects and assets across the country, in a move hoped to also help attract new foreign investment in the oil and gas sector.

A presidential decree, further he said, on the application of a multilayered security system at these projects soon would be issued.

"This new measure is urgent to show the government's strong commitment to assuring foreign oil investors of their security in investing in the country, especially in conflict-torn regions, and to make Indonesia's oil industry more attractive and competitive," he said.

The government is struggling to attract new investment in the oil and gas sector as the country's existing oil fields dry up.

Purnomo said the security authorities, investors and the public should all work together in maintaining security.

He said the presidential decree would regulate that the security of all vital assets, including oil fields, refineries and mining companies' headquarters, would be provided by a first ring of internal security guards, a second layer of local residents and a third ring of military and police personnel.

Somewhat different from the existing security system, he said, mining companies would be required to carry out community development programs to empower residents.

"Many mining companies have developed trouble in their areas of operation because they forget to empower local communities or the funds they have disbursed through third parties for community development do not reach the local communities," he said. "We should learn from the security disturbances threatening foreign investment in Aceh, North Sumatra, Riau and Papua."

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