Freeport and the environment

Freeport and the environment

In his letter (The Jakarta Post, March 7, 2000 Not a
catastrophe), Mr. Bruce E. Marsh sounds like a nice and sincere
person. However, he is in the mining business, so there is one
question he will not ask and that is whether the destruction of a
mountain, a river system and its associated delta is worth the
ore taken out of that mountain. For Mr. Marsh as a member of the
mining industry, the answer has to be yes. For the rest of us,
the answer is not so clear.

Mr. Marsh points out the number of experts working with
Freeport. So? This is a public relations war, so each side can
find experts to promote their point of view. The term "expert"
sounds so neutral, so objective -- not so. There are conservative
experts and liberal experts, and I am sure that Freeport uses
only the experts that agree with Freeport.

Mr. Marsh talks about the community and social programs run by
the mine. I have seen some of them and they have their good
points, but they are peripheral. Freeport is a business and
Freeport's purpose is to make money. There is nothing wrong with
that, but Freeport is an industry which traditionally destroys an
area to get to the ore and then walks away. This industry has
been fighting environmentalists and the socially conscious
forever, and like most mining companies, Freeport will only go as
far as it is pushed. Being socially and environmentally
responsible costs money -- environment and social programs are
cost centers, not profit centers.

Then we get to the options for disposing of the tailings. I
enjoyed Freeport's advertisement in the name of "Transparency". I
didn't find it all that transparent given the jargon and
convoluted language of the report. Here is what I got out of that
report. Two alternative options, upland and lowland storage pose
environmental risks and would be expensive. So, the best practice
is to damp the tailings into a river, turning it gray from top to
bottom and destroying the ability of the rivers delta area to
maintain its original vegetation.

The "best practices" designation for dumping the tailings in
the river was decided because all three are environmentally bad,
but dumping in the river is free to Freeport. Therefore, there is
no "best practice". It is not clear if the actual environmental
impact of using the river is worse or less worse than the
potential environmental impact of the other methods, but the use
of the river is cheaper for Freeport than the alternatives.

That begs the real question. Is the current method good
enough. It may be "best practice", but it is still bad. Freeport
claims this is international standard. Well it appears that
"International Standard" isn't very high. If they were serious
about being environmentally responsible, I would think they would
choose U.S. or European standards to shoot for. Of course, that
would be expensive. I am pretty sure, that if that mine was
located in the U.S. or Europe, freeport would not be dumping
those tailings in the river. But since the mine is out in the
wilds of Irian Jaya and the New Order government was much more
interested in cash than the environment, they dump away.

The bottom line here is what are the actual costs (financial,
environmental and social) of getting the copper and gold out of
that mountain in Irian Jaya and who bears those costs.
Destruction and degradation of the environment is a major
component of those costs, and one that is getting higher as the
world continues to rapidly loose its forests and biological
resources. Freeport clearly doesn't want to pay the cost -- so
Irian Jaya, Indonesia, and "the environment" are paying.

This represents quite a large subsidy to Freeport, its
shareholders, and consumers of copper. The only real, long term,
sustainable solution to this problem is for Freeport to
internalize all the costs of production, including protecting the
environment, and pass that cost on to its customers. If we, since
we all use copper, refuse to pay that cost, then the mine in
Irian Jaya is not viable and should be closed down. If we all
agree to pay the full cost, including protecting the environment,
then no problem. In either case, we all win.

FRANK PAGE

Jakarta