Irianese leaders decry Freeport expansion plan

Irianese leaders decry Freeport expansion plan

JAKARTA (JP): Irianese leaders, rebuking President B.J.
Habibie for supporting the expansion plan of mining company PT
Freeport Indonesia, demanded on Friday their people have a say in
the process of licensing the development.

"The government is crazy. Officials in Jakarta have so easily
allowed Freeport to increase its production without considering
the devastating impact the expansion will have on us living
around the mining field," Tom Beanal, a leader of the Amungme
tribe living near Freeport's Grasberg mine in Irian Jaya, told
The Jakarta Post.

The Amungme, most of whom are poor, claim the mining site is
on their ancestral land.

Tom described "hellish" living conditions in the area due to
pollution from the operation.

"The expansion would unleash a more devastating impact on the
local environment," he said by telephone from the Irian Jaya
capital of Jayapura.

Tom was dismayed Habibie and his ministers never consulted
with the Irianese about Freeport's expansion. He feared the
government would meet any opposition to the plan with violence.

"People in Jakarta have never asked for our opinion. The
government has never allowed the Irianese people to think.

"If we protest their decision, they will send troops to kill
us."

Habibie has instructed several ministers, including Minister
of Mines and Energy Kuntoro Mangkusubroto, to assist Freeport in
realizing its plan to increase ore output to 300,000 metric tons
per day (tpd) from 160,000 tpd.

Habibie gave the instruction despite Kuntoro's demand for
further assessment of the plan.

Freeport is currently producing about 240,000 tpd as part of
trial operation to achieve the 300,000 tpd goal. The company has
reportedly invested US$1 billion to expand production facilities
for increased output.

Tom said Freeport amassed great wealth from the mining of
copper and gold in Grasberg and nearby areas for two and a half
decades, even as living conditions of the local people worsened.

He also queried the probe by the Attorney General's Office
into collusion charges leveled last year by American scholar
Jeffrey Winters against Freeport and Coordinating Minister of
Economy, Finance and Industry Ginandjar Kartasasmita.

Winters charged Freeport with dubious deals to enable
Ginandjar's associate Aburizal Bakrie to own a stake in the
company as a reward for the smooth renewal of its contract of
work (COW) for Grasberg.

The Attorney General's Office has investigated officials and
businessmen implicated in Winters' allegation, but has not
released findings to the public. A miffed Ginanjar vehemently
denied the charges.

"I see many lies. While the investigation into KKN (the local
acronym for corruption, collusion and nepotism) charges has never
been concluded, now the President has allowed the company to
increase its output," Tom said.

Consult

Meanwhile, the vice chairman of the House of Representatives'
Commission V overseeing mines and energy, Antonius Rahail, who is
Irianese, urged the government to consult with the provincial
administration before making a decision on Freeport's plan.

"The President may make his own decision. However, the
decision can't work if there is no support from the local
people," Rahail, an Indonesian Democratic Party legislator, told
the Post.

Meanwhile, Kuntoro said on Friday in Bandung, West Java, his
ministry would only allow the firm's expansion if Freeport was
willing to increase its royalty payments to the government and
could prove it possessed the technical ability to prevent the
expansion from causing environmental damage.

Many parties, including the Indonesian Forum for Environment
(Walhi), have expressed doubts about Freeport's ability to
protect the environment around the mining field.

According to Director General of Mining Rozik B. Soetjipto,
who accompanied the minister, the mines ministry is negotiating
with Freeport to double its royalties to the government.

Currently, the government receives royalties of between 1.5
percent and 3.5 percent of Freeport's copper sales revenues and 1
percent of its gold and silver sales revenues.

Freeport is 81.28 percent owned by New Orleans-based Freeport
McMoRan Copper & Gold, with the Indonesian government and PT
Indocopper Investama Corporation each owning 9.36 percent.

Indocopper is 50.48 percent owned by Nusamba Mineral
Industries, linked to former president Soeharto, 49 percent by
Freeport McMoRan and 0.52 percent by the investing
public. (jsk/43)