Freeport deal still open to change: Sonny

JAKARTA (JP): State Minister of the Environment Sonny Keraf said on Monday that the mining contract between the government and PT Freeport Indonesia remained open to change, pending the results of an environmental audit of the company.

Sonny said there remained the possibility of the government reviewing or renegotiating the deal if a joint team comprising officials from his office and the Ministry of Mines and Energy found the contract was flawed.

"No final decision has been made yet. The status of the contract is now pending the outcome of the examination conducted by the interministerial team," he told The Jakarta Post.

Sonny was responding to a comment by Minister of Foreign Affairs Alwi Shihab, who said the government had rejected calls for amendments to the contract because it would undermine the country's legal certainty and discourage foreign investors from entering Indonesia.

Sonny recommended the government amend article 26 of the contract, which requires that the giant gold and copper mining company safeguard and insure the sustainability of the environment surrounding its site.

He said the team was gathering data and verifying Freeport's own audit of environmental conditions and the community development around its mining site in Irian Jaya. The verification is expected to be completed within three months.

A team set up by the National Environmental Management Agency, which he chairs, will soon visit the company, a subsidiary of Freeport McMoRan Copper & Gold of the United States.

An environmental audit on the company by independent consultant Montgomery-Watson last year described Freeport's environmental protection program as exemplary, but Sonny said the audit was incomplete.

Freeport has come under fire for allegedly causing human rights abuses and environmental damage during its more than 30- year operation in Irian Jaya.

Sonny shrugged off former U.S. secretary of state Henry Kissinger's warning that Indonesia should honor its contract with Freeport, saying it was unnecessary for the government to comply with the deal if it was inequitable.

Kissinger, who is also a member of Freeport McMoRan's board of directors, met with President Abdurrahman Wahid last week. (01/dja)