House questions operation of US-based Freeport
House questions operation of US-based Freeport
JAKARTA (JP): Members of Commission X of the House of
Representative (DPR) yesterday asked Irian Jaya's Governor J.
Pattipi if PT Freeport Indonesia's operations in the province
have benefited the local people.
The House members contended in a hearing that the profits
gained by the United States company from the copper and gold it
has mined in Irian Jaya may have been much more than the benefits
the local people have received from the company's presence.
"When we visited the Freeport mining complex, we got the
impression that the company treated the area as part of the
United States," said Mike Prionggo, a member of the commission.
PT Freeport Indonesia is a U.S.-Indonesian joint venture, 80
percent owned by Freeport McMoRan Copper & Gold of the United
States, 10 percent by the government of Indonesia and another 10
percent by a local private company.
Governor Pattipi told the commission that Freeport has
contributed greatly to Irian Jaya's economic and social
development.
"In 1991 PT Freeport Indonesia contributed 47 percent to Irian
Jaya's regional gross domestic product, up from 45 percent in
1990. This will further increase in the future due to the
expansion of its production capacity up to 115,000 tons per day
in 1996," Pittipi said.
He also assured the commission that although PT Freeport is
the biggest contributor to the province's economy, it will not
turn itself into an independent government and neither will its
in mining area become a U.S. territory.
"The company also contributes Rp 500 million (US$231,588)
every month to the local economy through its purchases of local
goods," Pittipi added.
Unfair
The House members argued that the deal between the government
and Freeport was unfair, thereby enabling the U.S. company to
have too many advantages.
The chief of the Irian Jaya office of the Ministry of Mines
and Energy Yudo D. Elyfas reminded the House commission that
Freeport works in the province under a work contract with the
government which was approved by the House.
"I must remind you that the deal is based on the contract
which was approved by the House before it was ratified by the
President," Yudo said.
He explained that the central government increased the shares
for Irian from 70 percent to 80 percent out of royalties given by
Freeport.
The company started its copper and gold mining operation in
Irian Jaya in 1967.
The company's mining concession was extended last year in
light of its expansion program that includes the construction of
a copper smelter in Gresik, East Java.(yns)