Demand for Freeport contract review blasted

Demand for Freeport contract review blasted

JAKARTA (JP): A legislator criticized on Thursday two
commissions of the House of Representatives for recommending on
Tuesday a review of the contract of work held by copper and gold
mining company PT Freeport Indonesia.

Head of the House's Commission VIII for mines and energy Irwan
Prayitno said the Commission I for defense, security and foreign
affairs and the Commission II for home and legal affairs had gone
beyond their authority by making such a recommendation.

He said the responsibility to make such a recommendation lay
with the commission he headed.

Consequently, the recommendation could not be taken as
official but only "an input", Irwan was quoted by Antara as
saying.

However, he did not mention if his commission would turn down
the recommendation.

Commission I and II asked on Tuesday for the government to
review its contract with mining company PT Freeport Indonesia,
saying the deal violated investment regulations and the 1945
State Constitution.

Both commissions said the government received too little share
of the revenue from the company's operation, asking the
government to review the contract to ensure that it would receive
fairer revenue sharing.

Following a visit to the company's copper and gold mine in
Grasberg, Irian Jaya, the two commissions concluded that the
mining operations had also resulted in socioeconomic injustice,
rampant human rights abuse and political tension.

Freeport Indonesia is 81.28 percent owned by U.S. mining
company Freeport McMoRan Copper & Gold with the Indonesia
government and PT Indocopper Investama Corporation holding each a
9.36 percent stake in the company.

Indocopper is 50.48 percent owned by Nusamba Mineral
Industries, which is linked to former president Soeharto.
Freeport McMoran hold a 49 percent stake in Indocopper and the
investing public hold 0.52 percent.

No confidence

Separately, member of the Commission VIII Pramono Anung said
on Thursday the House should give "vote of no confidence" to
Freeport's contract to pressure the company to be willing to
renegotiate its contract.

He blasted the company for lack of transparency in many
aspects.

He said Freeport had never reported the number of vessels that
carried its copper and gold ore from Irian Jaya to smelters in
Indonesia and abroad.

Freeport also never revealed the percentage of gold, copper
and silver contents of the ore.

"Freeport has never permitted any surveyor to take sample ores
from the vessels transporting the ores. No government official
observes the company's operation from mining activities to ore
shipment," Anung said.

He also said Freeport had never audited the fund it provided
for the development program of the local community.

According to Anung, Freeport allocated 1 percent of its sales
for the fund every year.

He also blasted the environmental destruction caused by
Freeport's operation, doubting the audit results of American
auditor Montgomery Watson which lauded the environmental
protection of Freeport as "exemplary".

"How come? That's a big question given the fact that mangrove
trees with the height of four meters die from being buried by the
company's tailings," Anung said. (jsk)