Court orders Freeport to clean up its act

Down to Earth No 51 November 2001

WALHI, Indonesia's leading environmental organisation, has scored a landmark victory in its court case against copper and gold miners PT Freeport Indonesia, operators of the huge Grasberg mine in West Papua. Meanwhile, militarisation is being intensified at the mine, as the Indonesian security forces pledge to protect it from alleged threats from "separatist groups".

On August 28th the South Jakarta District Court declared Freeport guilty of violating Indonesian environmental law (No. 23, 1997). The company was ordered to reform its waste management systems. The court said that Freeport had deliberately concealed information and had given false and inaccurate explanations, thereby misleading the public.

WALHI's case was launched last year after a rockslide on May 4th at the Wanagon dam. Freeport disposes of overburden and waste rock from the mine in this artificial lake. The collapse triggered a tide of water, sludge and overburden to cascade into Wanagon valley, and caused flooding in Banti village several kilometres downstream from the dam. Four construction workers were swept away, assumed dead. (See also DTE 47)

Freeport's press releases appeared to blame the incident on high rainfall. The company claimed that the accident did not pose any risk to human health or have an impact on the environment. However, Indonesia's environmental protection agency, Bapedal, reported that the company had used the lake to dump and neutralize acid slag and that, at the time of the incident, the sediment in the lake contained toxic and dangerous material.

Freeport blamed a previous landslide in June 1999 on high rainfall too, but Bapedal investigations found that one of the causes was excessive waste disposal by the company the day before the incident. The company had been dumping twice the daily permitted amount.

The court ordered Freeport to minimise the risk of more rockslides at Wanagon. It also ordered the company to reduce its production of toxic waste so that it fulfils water quality standards.

WALHI had demanded that the company be penalised by issuing public apologies through the national and international media, but this was rejected by the court.

Freeport, which denies the charges, will appeal. WALHI has also filed an appeal against the court's decision to reject the demand for a public apology from Freeport.

WALHI's campaigns director Longgena Ginting described the verdict as a "minor victory", but recognised the positive impact for activists campaigning against environmental destruction by mining companies. WALHI director Emmy Hafild said the court victory was merely the first step as there were many more companies that deceive the public.

The new environment minister Nabiel Makarim applauded the court's decision, saying "This is the first time a court has ruled in favour of the public…". Nabiel's predecessor, Sonny Keraf, was Freeport's most vociferous critic within the Jakarta government.

James Moffett, chairman of parent company, Freeport McMoRan, said Freeport Indonesia "has provided and will always provide accurate information to the public and to the Government of Indonesia regarding all aspects of PT FI's operations…"

The company has consistently denied that its operations have polluted local rivers and denies that the waste rock, or tailings, which are dumped on the local river system, are toxic. After the Wanagon dam disaster, the company was ordered to reduce throughput at the mine from 230,000 tonnes per day to 200,000 tonnes, but by January this year it had been permitted to resume the higher production rate.

The tailings, which are carried by the river system to a 130 square km "deposition area" on the coastal plain south of the mine, are believed to be polluting the Arafura Sea as well as swamping sago trees and forests, on which local people rely for their livelihoods. Earlier this year, WALHI presented estimates of pollution from satellite data which showed that an area of 35,820 ha onshore and 84,158 ha offshore had been affected, mostly in the estuaries of the Mawati and Kamoro rivers. WALHI has called on the company to stop dumping tailings in West Papua's rivers.


Social impact and security

The mine's social impact on local Amungme and Kamoro tribes has been well-documented - as have the company's belated attempts to buy off its critics by offering money for 'community development' and employment at the mine.

Social problems include poor housing and health problems associated with in-migration, alcohol and drug abuse and - more recently - HIV infection.

In 1996 Freeport imposed a settlement on local communities - the 1% Fund - in the wake of unprecedented local, national and international protest against human rights abuses and environmental damage. This fund drew criticism from Indonesia's human rights commission (Komnas HAM) and local churchmen, who said the funds were unfairly distributed, misused and caused conflict between indigenous communities (see DTE 35:4 and DTE 31:4). Last year an assessment conducted by a US-based NGO found there had been instances of corruption, lack of accountability and jealousy among fund recipients. A protest by Kamoro community leaders criticised the biased management of the fund.

In September this year a further agreement was signed between the company and Amungme and Kamoro leaders, who were flown to company headquarters in New Orleans. Under the agreement, Freeport will pay US$500,000 per year into a trust fund with an initial injection of $2.5 million. The agreement was originally drafted in 1996 and is designed to fulfil Freeport's commitment to voluntary recognition of customary landowners in the mine area. According to a Jakarta Post report, the Amungme and Kamoro leaders want to use some of the money to buy shares in the company.

In April this year, one of the mine's most outspoken critics and herself a victim of human rights abuse, Yosepha Alomang was awarded the Goldman Environmental Prize in recognition of her work on both the environment and human rights. In 1999 Yosepha set up a human rights organisation - Hamak. She recently refused a donation of US$ 248,000 from Freeport. Yosepha has demanded on several occasions that Freeport halt its operations.

The long history of human rights abuse in Timika is closely connected to the role of the Indonesian armed forces in protecting the mine, classed by the Indonesian government as a "vital national project".

In 1997, following a period of heightened conflict and tension, 6,000 soldiers were reported to be stationed near the mine (see DTE 35:5). Freeport's military guards have been involved in numerous cases of torture, killings, rape and disappearances. In neighbouring areas, Indonesian troops have taken part in operations aimed at flushing out OPM (Free Papua Organisation) units, which have involved burning villages and killing civilians.

Timika and Ilaga in the neighbouring district of Puncak Jaya were both identified in October as violence "hotspots" which emerged as a result of increasing levels of military activity in West Papua as a whole.

This year there have been strong indications that the security forces are determined to continue with the policy of militarisation. In May, Sorong district military commander Col. M.R. Saragih said the local Indonesian military command was ready to safeguard Freeport's facilities from possible security threats, especially from the OPM. In July, the Indonesian language daily Suara Karya reported that security was being intensified at the mining site. Timika police chief Sumarjiyo was quoted as saying that police were co-ordinating with the military in anticipation of an expected attack by the OPM. Military commander Maj. Gen. Mahidin Simbolon and provincial Chief I Made Mangku Pastika also confirmed that local "separatist" groups planned an attack.


Freeport finds more gold

In May Freeport reported the discovery of a new 'resource' - named Ertsberg East Surface - containing up to 1.1 billion pounds of copper and 2.5 million ounces of gold. Freeport says it is studying the possibility of creating a large-scale open-pit and underground mining complex encompassing 500 million tons of ore. This would mean developing the Ertsberg East Surface, in conjunction with other deposits known as IOZ, DOZ, Dom and ESZ.


Special autonomy

Some figures in the Papuan political elite are optimistic that new revenue-sharing arrangements resulting from the newly-passed Special Autonomy law will solve many of the social problems caused by the mine. Under the new law, West Papua will receive 70% of revenues from oil and gas projects - 10% lower than widely anticipated - and 80% from mining.

Following the events of September 11th and beyond, a wave of anti-US sentiment in Indonesia led by Muslim fundamentalist protests in Java, gave rise to rumours that all American investments in Indonesia would be withdrawn. This provoked a strong reaction from Jayapura DPRD member Sam Resoeboen, who warned Jakarta politicians not to make political statements which disrupted operations of the company, because "its presence helps the prosperity of the people in Papua."

But human rights defenders believe that however much money pours into West Papua as a result of Special Autonomy, the negative impacts will continue as long as the military presence is maintained. And the military has a reputation for provoking unrest in order to justify its presence. In this regard, the current anti-US sentiment is playing into the security forces' hands - as it provides further justification for their protective role. A recent statement by Freeport expressed confidence that its operations would not be affected by the protests due to the "Indonesian security personnel" who are described as "very professional and dedicated to protecting company assets and facilities as well as all the residents of the area."

This contrasts starkly with demands from West Papuans who are calling for demilitarisation in Timika and elsewhere; for an end to impunity and for those responsible for committing atrocities in the past to be brought to justice. (Company statement quoted in Petromindo 17/Oct/01)

(Source: Petromindo 1/Apr/01; 1, 16 &18/May/01, 11&13/Jul/01; 14/Aug/01, 16/Oct/01; Kompas 5/Oct/01; Jakarta Post 29&30/Aug/01; 26/Sep/01; San Francisco Chronicle 9/Sep/01; Tempo Magazine 4-10/Sep/0; AP, 29/Aug/01, Media Indonesia 14/Aug/01; WALHI Press Briefing, received 25/Aug/00;Mining Journal 12/May/00; Risky Business, An Independent Annual Report on P.T. Freeport Indonesia, Project Underground, May 1998)


Freeport Indonesia is 85.9% owned by Freeport McMoRan Copper and Gold Inc.

The British mining giant Rio Tinto holds a 14.6 % share in this company plus a 40% stake in expansion at Grasberg and production from future mines in Freeport's second contract of work.

PT Freeport earned profits of US$136 million in 1999 and was Indonesia's biggest taxpayer. 
It is the world's lowest cost copper producer.