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Alleged rights violations weigh on Freeport's shoulders

Jakarta Post - March 8, 2017

Viriya P. Singgih, Jakarta The cases against gold and copper miner PT Freeport Indonesia (FI) are piling as the national rights body has stated that the firm has violated the rights of indigenous people during its 50-year operation in Papua.

According to an investigation carried out by the National Commission for Human Rights (Komnas HAM) from 2015 to 2017, FI has never paid compensation for the land it has been using as its working areas in Mimika, Papua, to its original owners the indigenous Amungme people.

The commission claimed to have gone deep into various ministries, including the Energy and Mineral Resources Ministry, the Agrarian and Spatial Planning Ministry and the Environment and Forestry Ministry, during the investigation and called the Mimika administration and FI for questioning.

"We asked all of them whether or not there was proof of land transactions by Freeport Indonesia in the past. They weren't able to present such evidence. Even the Agrarian and Spatial Planning Ministry said it knew nothing about it," Komnas HAM commissioner Natalius Pigai said on Tuesday evening after handing over the investigation report to Energy and Mineral Resources Minister Ignasius Jonan.

The commission concludes that there have been violations on the rights of indigenous people, whose lands have been unilaterally seized by the Indonesian government and FI. It argued that there should be compensation for the people, whether in the form of money or shares of the company.

The Mimika administration in Papua has demanded 10 to 20 of percent shares in FI to compensate for the use of the land for the past 50 years.

FI, a subsidiary of United States-based mining giant Freeport-McMoRan Inc., was granted its first contract of work (CoW) in 1967 to operate the Ertsberg mine in Papua by the regime of former president Soeharto as the country tried to attract investments.

At that time, the Ertsberg mine was known as the richest copper deposit ever found on the ground with an estimated 13 million tons of ore reserves above the ground and 14 million tons of underground ore within a depth of 100 meters.

In 1991, FI's contract was extended for 30 years following the company's plan to further develop the Grasberg mine, located only two kilometers away from Ertsberg and eventually known as the world's biggest gold mine and second-largest copper mine.

Mimika regent Eltinus Omaleng claims in his book, entitled "Papua Asks for Shares", that at least 212,000 hectares of land have been seized from the Amungme people for the company's operations.

He pointed to article 136 of the 2009 Mining Law, which requires mining license holders to settle all land disputes before starting their operations in related areas.

"The have been no compensation for 50 years. We don't know whom it met, whether or not it has land certificate," Eltinus said at the Energy and Mineral Resources Ministry on Tuesday.

Eltinus said the Mimika or Papua administration was ready to make a certain agreement with FI to allow the latter to pay for the shares in installments over a period of five years. The administration, he added, was also ready to waive its dividend rights during the installment period.

Responding to this matter, Energy and Mineral Resources deputy minister Arcandra Tahar said the government would try to resolve the entire case of FI by involving the indigenous people.

FI's latest CoW requires the firm to have sold 51 percent of its stake to Indonesian entities by 2011 or 45 percent if it has sold a minimum of 20 percent in the local stock market.

However, a string of regulations were issued along the way that eventually allowed FI to dodge the requirement until Ignasius reversed the course recently.

"We will talk about the details of the divestment process later. However, it should still be based on the existing regulations stipulating that the company's shares would first be offered to the central government," Arcandra said.

Source: http://www.thejakartapost.com/news/2017/03/08/alleged-rights-violations-weigh-on-freeports-shoulders.html.

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