Minister backs audit on Freeport

JAKARTA (JP): A just-released audit commending the environmental management of mining giant PT Freeport Indonesia received the backing of State Minister of Environment Sarwono Kusumaatmadja yesterday despite the fact it has yet to be verified by a government study.

During a media briefing to announce the results of the environmental audit, Sarwono said the verification team "would not encounter any trouble" and that "it was just a formality."

According to the minister of environment's decree No. 42/1994, environmental audits must be studied and verified by the government.

The audit was conducted by Dames and Moore, a worldwide environmental consultancy established nearly 60 years ago. Freeport commissioned it in September to study the technical environmental issues of the company's activities in Irian Jaya.

Freeport operates one of the biggest copper and gold mines in the world in Timika, Irian Jaya.

Asked why he was so confident with the audit, Sarwono pointed to Dames and Moore's credibility and reputation.

"It would be foolish for them to tinker around with it," he said.

When pressed if the government would conduct its own audit on Freeport's environmental program, Sarwono asked -- given Dames and Moore's elaborate and proficient work -- "why should we do more?"

Dames and Moore's project sponsor, Ros Kelly, said that until recently Freeport did not give high priority to environmental management. It was more reactive than proactive, said Kelly, a former Australian environment minister.

This initial slowness, according to the audit, "led to negative perceptions of PT Freeport Indonesia on the part of the public and government regulators."

This has changed, Kelly insisted, claiming that Freeport is now moving towards implementing "a best practice in environmental management".

"It has a way to go but now has the management leadership and commitment to succeed," she added.

The audit also determined that Freeport "in all material respects" is complying with government regulations, she said.

Tailings

The most controversial issue addressed by the audit is the disposal of tailings, a process considered to have the most impact on the environment.

The Indonesian Forum for Environment (Walhi) has accused Freeport of dumping toxic tailings into the nearby Ajkwa River.

The audit stated that while the tailings in the river are an "unsightly and unwelcome sight, particularly to the indigenous highlands people," they were found to be nontoxic.

To remedy the long-term negative effects that might occur from tailing disposal, Freeport is currently building a tailing storage area using two levees known as the Ajkwa deposition area.

PT Freeport Indonesia's director, Paul Murphy, said the capital expense for the project is US$25 million, with an estimated maintenance cost of $12 million a year. The construction of the disposal area is expected to be completed in December.

Regarding natural resource conservation and recovery, the audit found the mine's cutoff grade of 0.85 percent copper in the sediment high by world standards.

Nevertheless, Kelly explained that the audit team could accept Freeport's rationale for setting such a high cutoff rate and added that it will be decreased to 0.6 percent by 2002.

Dames and Moore conclude that the retreat of the Puncak Jaya glaciers is "consistent with the effects of global warming and is not related to PT Freeport Indonesia's activities."

It went on to say that a risk of significant loss of biodiversity was not found by the audit team.

In the area of waste management, the audit found that Freeport has only concertedly addressed this concern in the past two years. While endorsing the company's initiatives, the audit also recommended that potential liabilities from past activities be addressed.

The audit further recommends Freeport prepare a mine closure plan.

Paul Murphy expressed confidence that the audit refutes much of the misinformation circulating about Freeport.

When asked what groups like Walhi would think of the very positive audit, Minister Sarwono responded that the report was not meant "to shut anyone up".

"If they want to continue (criticizing) then go ahead," he said, adding the audit is aimed at "convincing everyone that Freeport is an environmentally conscious company".

A second audit on the social impacts of PT Freeport, being conducted by Labat and Anderson, is due to be released next month. (mds)