MAC/20: Mines and Communities

Papuans confront Freeport

Published by MAC on 2006-04-15

Papuans confront Freeport

TAPOL Bulletin 182

April 2006

During the past few months, the giant US mining corporation, Freeport-McMoran Copper & Gold Inc, has been the target of protest and opposition on a scale not seen before. Actions have occurred in several parts of West Papua as well as in Jakarta and other cities. Some groups are calling for the company to stop its operations while others are pressing for a re-negotiation of the Contract of Work originally agreed with the Indonesian government in 1967. There are no signs as yet that either of these demands will be met.

On the basis of the initial contract signed in 1967 (re-negotiated in 1991), Freeport has been exploiting West Papua's copper and gold reserves, which rank among the largest in the world, for nearly 40 years.

The people of West Papua have never been involved in any of the agreements with the company and have hardly benefited from its operations. On the contrary, they have been forced to surrender ancestral lands, and have suffered human rights abuses from the military in charge of security. Tailings spewed daily from the mine have caused immense environmental damage to Freeport's concession area of 230 square kilometres (90 square miles).

The British mining giant, Rio Tinto, was formerly a shareholder in Freeport McMoran. It retains a joint venture interest, which in 2005 generated US$ 232 million of earnings for the company..

The latest eruption of West Papuan anger with the company has been spurred by two recent events. Firstly, the publication on 27 December of a front page article in the New York Times called The Cost of Gold ­ The Hidden Payroll: Below a Mountain of Wealth, a River of Waste. This drew attention to the huge profits made by the company and to the massive sums paid to the military for security protection. [See TAPOL Bulletin, No 181, December 2005]

Secondly, the forcible expulsion from the mining area in February of local people prospecting for gold in the waste left behind by the company. The ensuing clashes with the police forced the company to suspend operations for three days.

These incidents have helped draw attention to the contrast between, on the one hand, a hugely profitable company last year paying over $1 billion to the Indonesian government and lining the pockets of its shareholders and, on the other hand, a desperately poor population who have had no say in the unbridled exploitation of what they rightfully see as their own natural resources.

Last year, while the World Bank revealed 38 per cent of Papuans were living in poverty, Freeport McMoran paid its two top executives a fortune. The company's chairman, 'Jim-Bob' Moffett, and its president and chief executive Richard Adkerson together cashed in stock options of more than $130 million in the previous six months, according to the US Securities and Exchange Commission. This came on top of compensation packages of $77.3 million in 2005. Adkerson "defended their 2005 compensation packages as a reflection of 'an unusual year' during which the company's copper and gold production increased sharply. It was, he said, 'just a matter of personal financial prudence'". [The Financial Times, 11 April 2006] Abepura fatalities

Papuan anger over Freeport erupted first in Timika, the town near Tembagapura where the mining operations are based, and then, a few days later, in Jayapura, the capital of of West Papua.

In Timika, on 14 March, angry crowds attacked the hotel where Freeport officials were staying and damaged the building though there were no casualties. Among those staying at the Hotel Sheraton were members of the Papuan People's Assembly (MRP), who were hoping to visit the mine as part of an investigation but were compelled by circumstances to abandon their mission.

Two days later, in Abepura, about 20 kilometres from Jayapura, clashes between Papuans and the security forces outside Cenderawasih University had fatal consequences. After members of Brimob, the notorious riot-control brigade of the Indonesian Police Force, had failed to persuade students to remove a roadblock, they resorted to force. Stone-throwing students responded by cornering several members of Brimob. In the clashes which ensued, three policemen were killed. A fourth man, from the Indonesian air force, who happened to be in the campus complex, also died. The death toll later rose to five as a wounded police officers died in hospital. The air force officer was reportedly from air force intelligence.

An unknown number of civilians were also injured, including children. A Papuan student, Dany Hisage, died as a result of grievous injuries inflicted on him in police custody.

Arbitrary reprisals

Following the killing of the Brimob officers, the police launched 'sweeping operations' (house-to-house searches and patrols searching the streets) in and around Jayapura during which a number of student dormitories were badly damaged. Vehicles were stopped and searched and Papuan passengers were dragged out, kicked and beaten. Students from the Central Highlands appeared to be targeted in revenge attacks reminiscent of those that took place in Abepura in December 2000 when three students were killed and dozens more were tortured in police custody [See 'Abepura killers escape justice' TAPOL Bulletin, no. 180, p. 16].

A total of 57 people, mostly students, were arrested. Hundreds of others fled to the surrounding hills to find sanctuary. By the end of March around 200 students were thought to be still in hiding without food or access to medical care.

Two journalists' organisations, the ICTJ (Association of Television Journalists) and AJI (Alliance of Independence Journalists) issued a joint statement complaining that several of their members had been mal-treated by the security forces while they were covering the events as they unfolded, and demanded an apology and compensation from the police for equipment destroyed and for medical costs.

Financial markets worried

The troubles surrounding Freeport have attracted much comment around the world. According to the leading financial news agency, Dow Jones, 'business circles are expressing concern over the effects of the mine's future on the tight metals market as it churns out a massive 9,000 ounces of gold and 1,000 tons of copper a day'. [Dow Jones, 17 March 2006] As for the government in Jakarta, the same report quotes President Susilo Bambang Yudhoyono as describing the demands for the company's operations to close down as being 'unrealistic', adding that his government would study the company's community programmes 'to see if the funds could be distributed more evenly'. One of the President's reasons for refusing to close down the company was the 'harmful effect' it would have on the national economy.

The President's reaction was predictable bearing in mind that the company is Indonesia's largest taxpayer. Faced with the escalating crisis, he ordered a team of top-level officials to visit West Papua. They included Admiral Djoko Suyanto, the commander-in-chief of the Armed Forces, General Sutanto, the national chief of police, Syamsir Siregar, head of the state intelligence agency, BIN and Air Marshal Widodo, A.S., Minister Co-ordinator for Political and Security Affairs.

Although Jakarta initially insisted that additional police would not be sent because those on the spot were deemed to be sufficient, within a week came an announcement that 600 additional Brimob troops would be sent to West Papua. The Brimob troops already in Jayapura had been withdrawn to barracks.

Ban on foreign media still in place

Five weeks before the protests against Freeport took place, Indonesia's Defence Minister, Juwono Sudarsono, the first non-military man to occupy the post since the 1950s, defended restrictions on foreign media access to West Papua. He was quoted as saying that the presence of the foreign media, NGOs and churches 'might create conflict there by encouraging Papuans to campaign on issues of human rights. We feel that our unity and cohesion are being threatened by the presence of foreign intrusion'. [Reuters, 6 February 2006]

A report in the Australian daily The Age, suggested that a visit by one of its journalists to Jayapura was the first time a foreign journalist had been able to gain access for nearly two years.

The fact that the statement about media access to West Papua was made not by the information and communications minister but by the defence minister only reinforces the suspicion that the decision to keep out prying foreign journalists is one taken by the military. With the foreign media and other foreigners kept largely at bay, the defence minister can hardly blame foreign intrusion for the protests against Freeport.

UN genocide expert kept out

The special adviser to the UN Secretary-General on the prevention of genocide, Juan Mendez, has said that West Papua is an area of concern in which the indigenous population is in danger of extinction [Voice of America, 27 January 2006]. He expressed frustration that the Indonesian government is preventing human rights observers from monitoring the 'worrying' situation amid reports of abuses there. He said that the UN was willing to step in and mediate a solution to the long-running tensions.

'It's very worrying and there's evidence about violence that has continued there since 1963. It's important that we look closely at the conflict now and make sure it's not getting out of hand. We certainly have it under our inquiry but it's hard to assess the situation on the ground to know what's going on in West Papua,' he said.

Chris Ballard of the Australian National University in Canberra, who is recognised as one of Australia's foremost experts on West Papua is also being kept out. He said that he has not been able to visit West Papua since 2001. [Sydney Morning Herald,1 March, 2006]

TAPOL raises problem with President Yudhoyono

In a letter to the Indonesian President sent on the day after the tragic events in Abepura, TAPOL called for the removal of arbitrary restrictions on access to West Papua for all journalists, whether Indonesian or foreign, for the immediate establishment of an independent commission to investigate the causes of the events in mid-March, for the commission to report within one month, for its findings to be made public, and for all those now under arrest to be allowed access to a lawyer and either charged or released.

Fourteen to be charged

Following the bloody incident in Abepura, 14 people are being held by the police as suspects. They include: Selpius Bobii who chairs the West Papua Referendum Front , Moses Totoba, a teacher, Ferry Pakage, a parking attendant, and Musa Asol, a security officer. The other suspects are all students: Benius Baker, Alex Wayangkaw,

Thomas Okayo, Elkana Lokobal, Elias Tanaka, Matius Patrius Alangior and Obaya Papua. They are facing a number of charges, including murder and subversion. An unknown number of others wanted by the police are still in hiding.

Lawyers were initially appointed by the state without regard to the wishes of the detainees but now arrangements have been made for a local NGO to assist. There is concern that those detained will be forced to sign a confession including a statement that they have not been tortured. There have been reports of torture against two of the detainees.

Freeport and Rio Tinto at a glance:

Freeport signed its first Contract of Work with Indonesia in 1967. This was before the so-called Act of Free Choice in August 1969, which led to West Papua's incorporation into Indonesia. The contract was to explore and exploit the area of Mount Ertsberg. It was Indonesia's first contract with a foreign company after General Suharto seized power

In December 1991, after the discovery of more copper and gold reserves at Mount Grasberg, the company signed a new Contract of Work massively increasing its exploration area. The new Contract of Work was for a period of 30 years with two possible 10-year extensions.

The Grasberg mine is operated by a local subsidiary known as PT Freeport Indonesia., which is owned 90.64% by Freeport McMoran and 9.36% by the Indonesian government.

Its concession covers an area of 230 square kilometres or 90 square miles.

Between 1992 and 2003, the company paid over US$2.3 billion in taxes and royalties to Jakarta. In 2005, the amount paid to the government rose to US$1.2 billion [Freeport McMoran Annual reports 2003, p. 12 and 2005, p. 17].

Sales totalled 1.46 billion pounds of copper and a record 2.8 million ounces of gold in 2005, compared with sales of 1.0 billion pounds of copper and 1.4 million ounces of gold in 2004 [Freeport McMoran Annual report 2005, p. 3]

Until 2004, Rio Tinto owned a 13.1 shareholding in Freeport-McMoran. Its shares were sold in March of that year for US$ 882 million.

Rio Tinto retained a 40 per cent joint venture interest in reserves mined as a consequence of expansions and developments at the Grasberg mine since 1998. In 2005, Rio Tinto's share of the 40 per cent joint venture amounted to 109,600 tonnes of copper and 670,000 oz. of gold.

Rio Tinto's earnings from the joint venture in 2005 increased by US$ 200 million to US$ 232.

(See also TAPOL Occasional Reports No 16, 'Freeport and the Tribal People' published in 1991).

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