What has gone wrong with PT Freeport?

What has gone wrong with PT Freeport?

Freeport, the giant mining company which operates in Irian
Jaya, has been in the news in recent months following a riot in
Timika. T. Mulya Lubis suggests that the company take into
account the locals' need and aspirations and change its approach.

JAKARTA (JP): The Freeport mining company is as old as the New
Order government. It set foot in Indonesia in the mid 1960s.

The new government was still in its infancy then and there was
no foreign investment law. Hence, the giant American company was
given a big concession, which no successive investors have ever
been granted.

Freeport's investment was 100 percent foreign at the start.
The company was also not subject to Law No. 1 of 1967 which
stipulates a 30-year mining concession.

Because of the remote location of PT Freeport Indonesia, the
public is hardly aware of the goings on there and how much wealth
has been extracted from Irian Jaya soil.

Hence, people say Freeport is "untouchable" or "a state within
a state". These allegations are incorrect, but they do reflect a
perception of the company's secrecy.

People find it ironic that a foreign company so big, rich and
arrogant can offer so little benefit to the local people.

Freeport has undoubtedly contributed large proceeds to the
state coffers. Two local shareholders, PT Indocopper Investama
and the Indonesian government, now have a share of less than 20
percent in the company.

The company provides employment to Indonesians and has
contributed to the improvement of human resources by sending
employees abroad for studies.

Nevertheless, it is also true that Freeport has caused many
environmental related problems and has alienated the Irianese.
Complaints that Irianese are not given the same opportunities
offered to people from outside Irian Jaya have given rise to
outcries of unequal treatment.

Some say that the outdated American doctrine of "separate but
equal" has found a new life in Freeport.

The grievances reflect the powerlessness of the locals not
only in Freeport but also in transmigration projects and in
government offices. The government found that excesses which did
occur were committed at the level of execution and it took
measures to improve the situation.

However, there are a lot more things to be done. We have to
ask ourselves about the separatist movements and the break up of
various social incidents, whether all that is the result of a
social gap and an error in our policies?

Is centralization to be blamed because the province was run as
if it could be controlled by a "remote sensing" device from
Jakarta? Is there no autonomy at all in Irian Jaya?

In this context all of us, including Freeport, have to open
our minds and do more for the Irianese community. Compared to 30
years ago, Irian Jaya is increasingly more open and sooner or
later more information will flood into the province.

Communication technology has lifted many taboos. Therefore,
equal work opportunities and environmental improvement must be
central in the issuance of policies.

Environmental improvement cannot be done by merely placing
advertisements in newspapers, and there is more to it than just
preventing degradation and pollution.

It is no exaggeration to say that the environmental audit by
the reputed environmental audit company Dames and Moore is far
from adequate. Environmental improvement cannot be separated from
social environmental betterment. Freeport has no significance if
it makes the community feel like strangers on their own soil.

This constitutes a challenge for Freeport, and many people
feel that the company falls short of the challenge. Not everyone
is of this opinion though.

Recently a tribal leader filed a suit against Freeport
headquarters with the New Orleans district court, although the
suit was later withdrawn.

The US$ 6 billion suit questioned Freeport's operations which
allegedly destroy the environment and stifle culture and human
rights. It is interesting that reference was made to ecoterrorism
and cultural genocide.

It reflects the magnitude of the problems. The largest
environmental organization in Indonesia, the Indonesian Forum for
Environment (Walhi), has also filed a suit against Freeport in
the same district court. This suit will push all sides,
especially Freeport, to take wiser, farsighted measures.

To seek profit is the essence of capitalism, but capitalism
cannot grow if the soil in which it is invested does not accept
it.

Times have changed. Distance is no more a problem. Even
boundaries cannot prevent a civil suit from being filed.
Furthermore, public relations are no more the monopoly of
multinational companies. NGOs can also effectively employ public
relations, both at national and international levels.

Whoever thought that an Amungme tribal chief would engage a
lawyer in the United States to sue Freeport? Whoever considered
that an organization like the Indonesian Forum for Environment
would have the pluck to sue Freeport at its home base?

This new era demands change. Freeport can no longer be a
"foreign company" amid the people of Irian Jaya.

It is time for Freeport to give more to the Irianese so that
its presence is beneficial to the community. If Freeport were to
grant 1 percent of its revenues to Irian Jaya it should not be
seen as charity.

In corporate language the term "corporate social
responsibility" is known, and it is this concept that must be
translated into concrete action. The Irianese are not against
foreign companies, but resentment is there and will become
stronger against foreign companies which alienate themselves.

Let us hope it is not too late to change the situation.

The writer is a noted human rights activist and a corporate
lawyer based in Jakarta.

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