Freeport and Transparency

Article 33 of the 1945 Constitution states clearly that “land and water and the natural resources contained therein shall be controlled by the state and shall be used for the greatest prosperity of the people.”

The government should take a look at the Constitution and remember its fundamental obligations. President Joko “Jokowi” Widodo is facing pressure from vested interests in determining the future of the world’s largest gold miner, Freeport, in Papua.

US-based gold and silver and copper miner Freeport McMoran is eager for the government to speed up its decision on extending Freeport’s contract of work (CoW), which expires in 2021. The company claims it is prepared to invest billions of US dollars to expand its explorations — if the decision goes its way.

According to Government Regulation No. 23/2010 on coal and mineral mining operations, Freeport may apply for a renewal two years before the contract expires at the soonest and five months at the latest.

The company has been aggressive in its public relations campaigns and high-level lobbying to win support, attempting to force President Jokowi to grant another 20-year contract.

Freeport has repeatedly emphasized that it has contributed huge tax payments to state coffers, has hired tens of thousands of workers and improved the living conditions of Papuans thanks to its tax and royalties and generous corporate social responsibility programs.

Freeport has indirectly warned the government over the extremely severe consequences it would face if it failed to provide legal certainty on Freeport’s operation beyond 2021.

Many citizens resented the mining company’s reminder that without US support for the UN-organized Act of Free Choice in Papua in 1969, the result of the referendum could have been damaging for Indonesia. Freeport’s presence in Papua at that time was reportedly the main reason for the US’ decision to make it possible to reunite Papua with Indonesia.

The US did not act out of affection for Indonesia, but in its own geopolitical economic interests.

We do not doubt Freeport’s claims, including that it has invested billions of dollars to extract minerals in the area since the early 1960s. But the company only invested in order to make a profit.

What the company is much less enthusiastic about is transparently disclosing how much it has gained from its investment. Does the government have accurate data on Freeport’s production volume? Doubts also still linger over the environmental damage caused by the company’s activities. Papuans deserve much more than just charity, donations and pay-offs from Freeport. The presence of the giant firm has caused major social, security and economic problems for the people there.

The government should be very strict in its negotiations with Freeport, and should not forget that Indonesia is the sovereign owner of the territory. ***


Thejakartapost