MAC: Mines and Communities

Govt Rebuked For Not Suing Freeport

Published by MAC on 2006-03-28
Source: The Jakarta Post

Govt rebuked for not suing Freeport

Tb. Arie Rukmantara, Jakarta

The Jakarta Post

28th March 2006

Legal experts have slammed the government for not taking legal action against PT Freeport Indonesia over its alleged violations of the country's environmental laws. The environmental law experts said there was no reason for a delay in legal action, which was mandated in the government's working contract with the U.S.-owned copper and gold mining firm.

State Minister for the Environment Rachmat Witoelar last week said Freeport's Grasberg mine in Papua had violated environmental standards on acid drainage and tailings disposal. The company had also not secured a permit to dump its tailings into local rivers, Rachmat said.

The government has said it would give the company time to comply with the regulations and has threatened to sue if Freeport failed to improve its waste disposal standards by the end of the year.

"The findings of the government's environmental audit clearly show that Freeport has violated our environmental laws. It has also violated the working contract," said Andri Akbar, a senior legal advisor to non-governmental organization GreenLaw.

Activists speculated the government was worried a legal dispute with the firm would stop work at the mine, depriving the state of revenue, and might only be settled through international arbitration. The government and Freeport first signed a working contract in 1967 and extended it in 1991, allowing the company to extract minerals in the province until 2021.

Andri said all working contracts signed by the government and foreign mining companies, including Freeport, contained articles on environmental standards, which firms must abide by. "Should a company violate the country's environmental law, then it has violated its contract," he said.

Article 16 and 26 of the 1991 working contract, a copy of which was obtained by The Jakarta Post, stipulate that Freeport must comply with by the country's environmental regulations and say the government has the right to halt the company's operations if they are found to have harmed the environment.

Andri said under the 1997 Environment Law, the government could slap administrative sanctions on Freeport, revoke its license to operate or file civil or criminal lawsuits against it. "The government can even take Freeport to international arbitration for violating the (working contract) agreement," he said.

If managers of the mine are found criminally liable for environmental misconduct, they could face 15 years' jail and a Rp 750 million (about US$82,000) fine.

An environmental law lecturer at East Java's Airlangga University, Suparto Wijoyo, said the 1997 law required the government to prosecute all violators.

Indro Sugiantoro of the Indonesian Center for Environmental Law said the government's hesitance to sue Freeport proved it had no intention of upholding the law. "Any act to avoid enforcing the law is a crime in itself," he said.

Freeport executives could not be reached for comment. However, in a statement sent to The Jakarta Post last week, the company reiterated it had complied with Indonesian laws and pledged to cooperate with the government to improve the environmental management of the mine.

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