PROBLEMS AT THE FREEPORT MINE: VIOLENCE, POLLUTION AND BRIBES TO THE MILITARY

POLLUTION CAUSED BY THE FREEPORT MINE

Jane Perlez and Raymond Bonner wrote in the New York Times, “Satellite images quickly reveal the deepening spiral that Freeport has bored out of its Grasberg mine as it pursues a virtually bottomless store of gold hidden inside. They also show a spreading soot-colored bruise of almost a billion tons of mine waste that the company has dumped directly into a jungle river of what had been one of the world's last untouched landscapes. [Source: Jane Perlez and Raymond Bonner, New York Times, December 27, 2005 *-*]

“By Freeport's own estimates,” it “will generate an estimated six billion tons of waste before it is through - more than twice as much earth as was excavated for the Panama Canal. Much of that waste has already been dumped in the mountains surrounding the mine or down a system of rivers that descends steeply onto the island's low-lying wetlands, close to Lorentz National Park, a pristine rain forest that has been granted special status by the United Nations. *-*

“In 2005 Freeport told the Indonesian government that the waste rock in the highlands, 900 feet deep in places, now covers about three square miles. An internal ministry memorandum from 2000 said the mine waste had killed all life in the rivers, and said that this violated the criminal section of the 1997 environmental law. A multimillion-dollar 2002 study by an American consulting company, Parametrix, paid for by Freeport and its joint venture partner, Rio Tinto, and not previously made public, noted that the rivers upstream and the wetlands inundated with waste were now "unsuitable for aquatic life." *-*

Polluted Rivers, Acidic Groundwater and Mountains of Waste from the Freeport Mine

Jane Perlez and Raymond Bonner wrote in the New York Times, “Down below, nearly 90 square miles of wetlands, once one of the richest freshwater habitats in the world, are virtually buried in mine waste, called tailings, with levels of copper and sediment so high that almost all fish have disappeared, according to environment ministry documents. The waste, the consistency and color of wet cement, belts down the rivers, and inundates and smothers all in its path, said Russell Dodt, an Australian civil engineer who managed the waste on the wetlands for 10 years until 2004 for Freeport. About a third of the waste has moved into the coastal estuary, an essential breeding ground for fish, and much of that "was ripped out to sea by the falling tide that acted like a big vacuum cleaner," he said. [Source: Jane Perlez and Raymond Bonner, New York Times, December 27, 2005 *-*]

“A perpetual worry is where to put all the mine's waste - accumulating at a rate of some 700,000 tons a day. The danger is that the waste rock atop the mountain will trickle out acids into the honeycomb of caverns and caves beneath the mine in a wet climate that gets up to 12 feet of rain a year, say environmental experts who have worked at the mine. Stuart Miller, an Australian geochemist who manages Freeport's waste rock, said at a mining conference in 2003 that the first acid runoffs began in 1993. The company can curb much of it today, he said, by blending in the mountain's abundant limestone with the potentially acid producing rock, which is also plentiful. Freeport also says that the company collects the acid runoff and neutralizes it. *-*

“But before 2004, the report obtained by The Times by Parametrix, the consulting company who did the study for Freeport, said that the mine had "an excess of acid-generating material." A geologist who worked at the mine, who declined to be identified because of fear of jeopardizing future employment, said acids were already flowing into the groundwater. Bright green-colored springs could be seen spouting several miles away, he said, a tell-tale sign that the acids had leached out copper. "That meant the acid water traveled a long way," he said. *-*

“Freeport says that the springs are "located several miles from our operations in the Lorentz World Heritage site and are not associated with our operations." The geologist agreed that the springs probably were in the Lorentz park, and said this showed that acids and copper from the mine were affecting the park, considered a world treasure for its ecological diversity. In the lowlands, the levees needed to contain the waste will eventually reach more than 70 feet high in some places, the company says. *-*

“Freeport says that the tailings are not toxic and that the river it uses for its waste meets Indonesian and American drinking water standards for dissolved metals. The coastal estuary, it says, is a "functioning ecosystem." The Parametrix report shows copper levels in surface waters high enough to kill sensitive aquatic life in a short time, said Ann Maest, a geochemist who consults on mining issues. The report showed that nearly half of the sediment samples in parts of the coastal estuary were toxic to the sensitive aquatic organisms at the bottom of the food chain, she said. The amount of sediment presents another problem. Too many suspended solids in water can smother aquatic life. Indonesian law says they should not exceed 400 milligrams per liter.Freeport's waste contained 37,500 milligrams as the river entered the lowlands, according to an environment ministry's field report in 2004, and 7,500 milligrams as the river entered the Arafura Sea.” *-*

Freeport’s Management of Its Mine Waste

Freeport told the New York Times it strives to mitigate the environmental effect of its mine, while also maximizing the benefits to its shareholders.” Jane Perlez and Raymond Bonner of The Times wrote, the company “says that local and regional governments have approved its waste management plans, and that the central government has approved its environmental impact statement and other monitoring plans. The company says it spent $30 million on environmental programs in 2004, and planted 50,000 mangrove seedlings last year as part of its reclamation efforts. It says cash crops can be grown on the waste with the addition of nutrients, and has begun demonstration projects. The Times made repeated requests to Freeport and to the Indonesian government to visit the mine and its surrounding area, which requires special permission for journalists. All were turned down.” [Source: Jane Perlez and Raymond Bonner, New York Times, December 27, 2005 *-*]

Two U.S. government environmental experts, Harvey Himberg and David Nelson visited the mine for several days, and issued a report critical of Freeport's operations, especially the huge amounts of waste it had sent into rivers, something that would not be allowed in the United States. he company went to court to block the report from being made public, and only a redacted version was later released. A person who thought it should be made public provided an uncensored copy to The Times. Freeport says the report reached "inaccurate conclusions." *-*

“The company says it has considered a full range of alternatives for managing and disposing of its waste, instead of using the river, and settled on the best one. A storage area would not be large enough and would require a tall dam in a region of heavy rainfalls and earthquakes, it said. A waste pipeline, rather than the river, would be too costly, prone to landslides and floods.To the American auditors, such arguments were not convincing. Freeport "characterizes engineered alternatives as having the highest potential for catastrophic failure when the project otherwise takes credit for legendary feats," the audit noted, like the pipelines more than 60 miles long down the mountains to carry fuel and copper and gold slurry. At the time, the waste was jumping the riverbanks, "resulting in a massive die-off of vegetation," the report said. Today, many of the same problems persist, but on a much larger scale.” *-*

Efforts to Get Freeport to Clean Up Its Waste

The Indonesian government has been reluctant to seriously pressure Freeport on environmental issues. Jane Perlez and Raymond Bonner wrote in the New York Times, “The strongest challenge came in 2000, when a feisty politician, Sonny Keraf, who was sympathetic to the Papuans, was appointed environment minister. Freeport Chairman James R. Moffett, Moffett flew out to Jakarta. Mr. Keraf initially refused to see the Freeport boss, but eventually agreed, and on the day kept him waiting for an hour and a half. "He came in so arrogant," Mr. Keraf recalled of the meeting in a recent interview, "sitting with his legs crossed."[Source: Jane Perlez and Raymond Bonner, New York Times, December 27, 2005 *-*]

“The American ambassador to Indonesia at the time, Robert Gelbard, said in an interview: "It was a terrible meeting." Mr. Keraf said that Mr. Moffett had said that his company had never polluted. "I told him that he should spend the money he spent on paying off people not to talk about the mine to properly dispose of the waste," Mr. Keraf said. Behind the scenes, Mr. Keraf kept up the pressure, angered that the company was using the rivers, forest and wetlands for its mine waste, a process allowed during the Suharto years.

In January 2001, Mr. Keraf wrote to the coordinating minister for economic affairs, arguing that Freeport should be forced to pay compensation for the rivers, forests and fish that its operations had destroyed. Six months later, one of his deputies, Masnellyarti Hilman, wrote to Freeport, saying a special environmental commission had recommended that the company stop using the river as a waste chute, and instead build a system of pipes. She also told Freeport to build sturdier dam-like walls to replace the less solid levees that it used to contain the waste on the wetlands. That practice has continued.

“In a blistering July 2001 letter, Mr. Keraf took the governor of Papua to task for granting Freeport a permit in 1996 to use the rivers for its waste. The governor, Mr. Keraf said, had no authority to grant permits more lenient than the provisions of national laws. Despite all these efforts, nothing happened. Mr. Keraf was unable to secure the support of other government agencies or his superiors in the cabinet. In August 2001, a new government came to power, and a less aggressive minister, Nabiel Makarim, replaced Mr. Keraf. At first, he, too, talked publicly of setting stricter limits on Freeport. Soon his efforts petered out.

The Environment Ministry has begun trying to put teeth into its rules where it can. It brought a criminal suit against the world's largest gold company, Newmont Mining Corporation, for alleged pollution, including a charge of not having a permit for disposing of mine waste into the sea. Newmont has fought the charges vigorously. But in the case of Freeport, the ministry has had no traction. Freeport still does not hold a permit from the national government to dispose of mine waste, as required by the 1999 hazardous waste regulations, according to Rasio Ridho Sani, assistant deputy for toxic waste management at the ministry. Mr. Arkin, Freeport's counsel, said that the company cooperated well with the environment ministry and that Freeport would not otherwise comment. "Freeport says their waste is not hazardous waste," Mr. Rasio said. "We cannot say it is not hazardous waste." He said his division and Freeport were now in negotiations on how to resolve the permit question.

The environment ministry was not the first to challenge Freeport over how it has disposed of its waste in Papua. The Overseas Private Investment Corporation, a United States government agency that insures American corporations for political risk in uncertain corners of the world, revoked Freeport's insurance policy in October 1995. It was a landmark decision, the first time that the agency had cut off insurance to any American company for environmental or human rights concerns. The company threatened to take the agency to court over the cancellation of its insurance. After protracted negotiations, the policy was reinstated for a few months, as a face-saving gesture to Mr. Moffett, according to the head of the agency then, Ruth Harkin. It was not renewed. [Source: Jane Perlez and Raymond Bonner, New York Times, December 27, 2005 *-*]

Indonesian Government Orders Freeport to Clean Up its Act

In 2006, Tb. Arie Rukmantara wrote in the Jakarta Post, “The government says PT Freeport Indonesia's Grasberg mine has violated the law on the environment and has threatened to sue the giant mining company unless it improves its environmental record during the next few years. “Considering that the company has not completely abided by our environmental standards, I order Freeport to improve its environmental management,” State Minister for the Environment Rachmat Witoelar said. Rachmat made the statement while announcing the results of a two-week environmental audit of the Papua mine in February, conducted by a government-sanctioned team of experts. The team found the joint operation between U.S. Freeport McMoRan Copper and Gold Inc. and London-based Rio Tinto Plc. at Grasberg mountain did not meet government standards on the management of acid drainage and tailings disposal. “A single violation is an act of pollution,” Rachmat said. [Source: Tb. Arie Rukmantara, Jakarta Post, March 24 2006 ^/^]

“The report also says Freeport has no permit to dump its tailings in a local river and that a huge amount of the tailings at its modified tailing deposition area had illegally entered the Arafuru estuary. The experts said the tailings contained a dozen chemicals and heavy metals harmful to living creatures. Environmental groups are worried the tailings could pollute the groundwater in the town of Timika, which lies in the area under the mine. “Freeport must minimize the amount of tailings that enter the estuary by applying better technology and reusing its tailing as much as possible,” the minister said. ^/^

“Activists estimate that the company dumps hundreds of thousands of tons of its mine tailings every day. They say about a million tons of tailings as high as seven meters are piled up in a huge dumping ground that stretches for more than 50 kilometers. However, Rachmat said other Freeport units, such as its milling factory and dewatering plant, had fulfilled all the government's environment standards on air and water pollution control and toxic waste management. ^/^

“Rachmat said the audit was the first ever thorough study organized at the firm's operations since Freeport started extracting ore from the site in 1973. Rachmat said the audit was part of the ministry's annual Program for Pollution Control, Evaluation and Rating (PROPER) that surveys and ranks more than 500 businesses on how they comply with environmental regulations. With the absence of a law obligating companies to participate in the scheme, those who joined voluntarily let the government inspect their environment management systems. ^/^

“PROPER has a color-coded system in declining order for companies -- gold, green, blue, red and black -- with gold indicating exemplary environmental performance and black substandard performance. It is usually announced in the middle of the year. Rachmat's Deputy for Pollution Control Gempur Adnan told The Jakarta Post that Freeport could get a “red label” for any disobedience. “We have yet bring them to court, but bad environmental management may affect the company's image, which would affect its stock prices,” he said. According to the scheme, red firms were deemed not to have brought harm to the environment yet, but were poor in environmental management. ^/^

“Freeport spokesman Siddharta Moersjid said the company would cooperate with the ministry to address any concerns regarding its operations. Environmental activists said they regretted that Rachmat had not gotten tough with the company. “The report should be enough to bring Freeport to court. A warning is not reasonable for a company that has destroyed our environment for over three decades,” said Chalid Muhammad of the Indonesian Forum for the Environment. Separately, former mining and energy minister Ginanjar Kartasasmita said, who signed the working contract with Freeport in 1991, said the government had historically failed to monitor Freeport's operations.” ^/^

Freeport Payments to Indonesian Military Officers

Jane Perlez and Raymond Bonner wrote in the New York Times, “Company records obtained by The Times show that from 1998 through 2004, Freeport gave military and police generals, colonels, majors and captains, and military units, nearly $20 million. Individual commanders received tens of thousands of dollars, in one case up to $150,000, according to the documents. They were provided by an individual close to Freeport and confirmed as authentic by current and former employees. While mining and natural resource companies sometimes contribute to the costs to foreign governments in securing their operations, payments to individual officers raise questions of bribes, said several people interviewed by The Times, including a former Indonesian attorney general, who said it was illegal under Indonesian law for officers to accept direct payments. [Source: Jane Perlez and Raymond Bonner, New York Times, December 27, 2005 *-*]

The payment system was essentially set up at meeting between Moffet, the chairman of Freeport, and Indonesian military leaders in Papua after riots in 1996 threatened the company. Perlez and Bonner wrote: After the 1996 riots, “It was not long before a worried Mr. Moffett flew out to Indonesia in the company jet. Freeport refused to comment on the meeting that followed. But a company official who was there recounted that Mr. Moffett met with a group of senior Indonesian military officers at the Sheraton Hotel in the lowland town of Timika, near the mine. The all-powerful Gen. Prabowo Subianto, son-in-law of President Suharto and commander of the Indonesian Special Forces, presided.

"Mr. Moffett, to protect you, to protect your company, you have to help the military here," General Prabowo began, according to the company employee who was present. Mr. Moffett is said to have replied: "Just tell me what I need to do." Each military service drew up its wish list, current and former company employees said. In short order, Freeport spent $35 million on military infrastructure - barracks, headquarters, mess halls, roads - and it also gave the commanders 70 Land Rovers and Land Cruisers, which were replaced every few years. Everybody got something, even the Navy and Air Force. The company had already hired a former C.I.A. operative, and on his recommendation, it now approached a military attaché at the American Embassy in Jakarta, and persuaded him to join the company, according to former and current employees. Two more former American military officers were hired, and a special department, called the Emergency Planning Operation, was set up to handle the company's new relationship with the Indonesian military. *-*

“The new department began making direct monthly payments to Indonesian military commanders, while the Security Risk Management office handled the payments to the police, according to company documents and current and former employees. "They signed a pact with the devil," said an American who was part of Freeport's security operations at the time, and who agreed with the company's decision. Freeport gave the military and the police in Papua at least $20 million from 1998 to May 2004, according to company documents. In interviews, current and former employees said that at least an additional $10 million was also paid during those years. *-*

“Seven years of accounting records were provided to The Times by an individual close to the company. Additional records for three years were provided by Global Witness, a nongovernment organization, which released a report last July, "Paying for Protection," about Freeport's relations with the Indonesian military. The records received by The Times showed payments to individual military officers listed under things like "food cost," "administrative services" and "monthly supplement." Current and former employees said the accounting categories did not reflect what the money was actually used for, and that it was likely that much of the money went into the officers' pockets. The commanders who received the money did not have to sign receipts, current and former employees said. “Asked if there was a reason Freeport would give money directly to military officers, Father Lowry, who retired in March 2004, but remained a consultant to Freeport until June, said, "I can't think of a good one." *-*

“The records show that the largest recipient was the commander of the troops in the Freeport area, Lt. Col. Togap F. Gultom. During six months in 2001, he was given just under $100,000 for "food costs," according to the company records, and more than $150,000 the following year. Freeport gave at least 10 other commanders a total of more than $350,000 for "food costs" in 2002, according to the records. Those payments were made to individual officers, current and former employees said, even though since the riots Freeport had allowed soldiers to eat in the company's mess and had trucked food to more distant military kitchens. "Three meals a day, seven days a week," a former official said. *-*

“Freeport also gave commanders commercial airplane tickets for themselves and their wives and children. Generals flew first or business class and lower ranking officers flew economy, said Brig. Gen. Ramizan Tarigan, who received $14,000 worth of tickets in 2002 for himself and his family. General Tarigan, who held a senior police post, said that police officers were allowed to accept airplane tickets because their pay was so low - as a general, his base salary was roughly $400 a month - but that it was in violation of police regulations to receive cash payments. In April 2002, the company gave the senior commander of forces in Papua, Maj. Gen. Mahidin Simbolon, more than $64,000, for what was described in Freeport's books as "fund for military project plan 2002." Eight months later, in December, he was given more than $67,000 for a "humanitarian civic action project." *-*

“By 2003, following the Enron scandal and passage of the Sarbanes-Oxley Act, which imposed more rigid accounting practices on companies, Freeport began making payments to military and police units instead of individual officers, according to records and current and former employees. The company paid police units in Papua slightly under $1 million in 2003, according to the records, listed under items like "monthly supplement payment," "administrative costs" and "administrative support." *-*

Freeport Payments to Indonesian Military Officers Illegal?

Jane Perlez and Raymond Bonner wrote in the New York Times, Freeport has resisted nearly any detailed disclosure of its payments to the military, saying they are legal and even required under Indonesian law. Marsillam Simanjuntak, who was minister of justice and later attorney general in one of the first governments after the fall of President Suharto, said it was a violation of Indonesian law for soldiers or police officers to accept payments from a company. "Of course, it's illegal," he said. But many companies do it, he said. The better question to ask, he said, was, "Is it allowed by the laws of the United States?" In 2005, year, the New York City pension funds submitted a shareholder resolution asking Freeport to review its policy on paying the police and military. They argued that it could violate the Foreign Corrupt Practices Act, which forbids American companies from paying bribes to foreign officials. Freeport opposed the resolution. [Source: Jane Perlez and Raymond Bonner, New York Times, December 27, 2005 *-*]

“Freeport has also said that the payments were required under its Contract of Work, its basic agreement with the government of Indonesia, first signed in 1967 and updated in 1991. The company declined to provide a copy of the contracts to The Times. A copy of each was provided by Denise Leith, author of "The Politics of Power: Freeport in Suharto's Indonesia." They contained no language requiring payments to the military. S. Prakash Sethi, head of the International Center for Corporate Accountability, which recently concluded a report on Freeport's development policies in Papua, said that the company had told him that it made "in-kind" contributions to the military, for housing and food, but that he had not been given access to accounting records. Any direct payments to military officers would be illegal, said Mr. Sethi, an expert on business ethics and corporate social responsibility and a professor at Baruch College. "It's corruption," he said. "It's bribery." *-*

“ Diarmid O'Sullivan, who works for Global Witness in London, criticized the payments. It may be necessary for a company to help governments with security, he said, but "they should give the money through the proper channels, in a transparent way."Freeport told The Times, "Our books and records are transparent and accurately reflect the support that we provide." That support, the company said in its responses, included "mitigating living costs," as well as "infrastructure, catered food and dining hall costs, housing, fuel, travel, vehicle repairs, allowances to cover incidental and administrative costs, and community assistance programs conducted by the military and police." The company said all of its expenditures were subject to a budget review process.” *-*

Indonesian Military, Human Rights and Freeport McMoRan

According to a Indonesian government commission report released in 1995, there has been "indiscriminate killings, torture, unlawful arrest and arbitrary detentions, disappearances, excessive surveillance and obvious destruction of local resident's property by elements of [the] security apparatus." The Indonesian military said that their military operations were a response to actions by the insurgent group, the Free Papua Movement.

According to a report by a Catholic bishop, people suspected of rebel activity have been tortured, kicked in the stomach, chest and head by people with army boots, beaten with rifle butts, forced to kneel with iron bars behind their knees and shackled by their thumbs, wrists or legs in military containers owned by Freeport-Moran. A total of 16 residents of Papua villages were and four people disappeared in the area around the mine in the mid 1990s. [Source: Jim Mann, Los Angeles Times, November 5, 1995]

Jane Perlez and Raymond Bonner wrote in the New York Times, “No investigation directly linked Freeport to human rights violations, but increasingly Papuans associated it with the abuses of Indonesian military units, in some cases using company facilities. [Source: Jane Perlez and Raymond Bonner, New York Times, December 27, 2005 *-*]

In addition to paying off Indonesian military officers, Freeport also made payments to militias charged with human rights violations. “According to the records received by The Times, the police Mobile Brigade, a paramilitary force often cited by the State Department for its brutality, received more than $200,000 in 2003. In its 2003 annual human rights report, the State Department said soldiers from the Mobile Brigade "continued to commit numerous serious human rights violations, including extrajudicial killings, torture, rape, and arbitrary detention." It cited no specific incidents from Papua. Freeport told The Times that "company policies take into account the potential for human rights abuses in determining what types of assistance to provide." *-*

Freeport Security and Intelligence Operations

Jane Perlez and Raymond Bonner wrote in the New York Times, “The Times's investigation also found that, according to one current and two former company officials who helped set up a covert program, Freeport intercepted e-mail messages to spy on its environmental opponents. Environmental groups, able to coordinate more effectively with the Internet, made Freeport a target. Local tribes were more and more restless at seeing little benefit for themselves as vast riches were extracted from their lands. To fortify itself, Freeport, working hand in hand with Indonesian military intelligence officers, began monitoring the e-mail messages and telephone conversations of its environmental opponents, said an employee who worked on the program and read the e-mail messages. [Source: Jane Perlez and Raymond Bonner, New York Times, December 27, 2005 *-*]

“The company also set up its own system to intercept e-mail messages, according to former and current employees, by establishing a bogus environmental group of its own, which asked people to register online with a password. As is often the case, many who registered used the same password for their own messages, which then allowed the company to tap in. Freeport's lawyers were nervous, a person who was at the company at the time said, but decided that nothing prohibited the company legally from reading e-mail messages abroad.” *-*

Violence Associated with the Freeport McMoRan

Freeport has been targeted with arson, roadside bombs and blockades since production began in the 1970s during the U.S.-backed Suharto dictatorship. In turn, Indonesian military units responsible for protecting the Freeport mine and its infrastructure have killed dozens in its effort to clamp down on resistance to to the mine. An Australian anthropologist, Chris Ballard, who worked for Freeport, and Abigail Abrash, an American human rights campaigner, estimated that 160 people had been killed by the military between 1975 and 1997 in the mine area and its surroundings. [Source: Jane Perlez and Raymond Bonner, New York Times, December 27, 2005 *-*]

In May 2002, a group of Papuans, believed to be OPM members, attacked the Freeport headquarters in the company town of Kuala Kencana, vandalizing buildings, slashing tires on vehicles. Indonesian soldiers on mine property have killed several demonstrators. Freeport denies any involvement.

Some critics of the mine believe that Freeport McMoRan was involved in a 1994 military crackdown on members of the Free Papua Movement, a small secessionist group demanding more autonomy for the indigenous people of Papua. After a Freeport McMoRan worker was killed by an unknown gunman, the company asked for help from the Indonesia military. In the clashes that followed 16 local people were killed and four others disappeared on land owned by the mining company.

In March 2006, “activists staged protests against Freeport-McMoRan accusing the company of polluting the land and taking the people's wealth. The protest turned violent, and five security officials were beaten to death.[Source: Ellen Nakashima, Washington Post, June 25, 2006 <>]

Violence Associated with the Freeport McMoRan in 1996

A minor traffic accident in 1996, triggered an anti-Freeport riot. A false rumor was spread that an official with the mining company had killed a local person in a car crash. As the story spread a mob armed with machetes and spears attacked the company’s offices. Three days of rioting ensued. Two Papuans died and two others were injured. Many local people evacuated Freeport with the military. Some prisoners are taken to jails in Freeport buses and imprisoned in Freeport shipping containers.

Jane Perlez and Raymond Bonner wrote in the New York Times, “In March 1996, long-simmering anger at the company erupted in rioting when anti-mine sentiment among different groups coalesced into what was perhaps the biggest threat to the company to this day. The mine and its mill were shut down for three days. Rioters destroyed $3 million of equipment and ransacked offices. In recent interviews, current and former Freeport officials recalled how they were stunned when, among those rioting, they saw men with military haircuts, combat boots and walkie-talkies. They seemed to be directing the rioters, at one point, to a Freeport laboratory, which they ransacked. [Source: Jane Perlez and Raymond Bonner, New York Times, December 27, 2005 *-*]

“The company intercepted e-mail messages that, according to two persons who read them at the time, suggested that certain military units, the community and environmental groups were working together. One e-mail exchange, between a community leader and the head of an environmental group, was filled with tactical military intelligence, according to a person who read the messages. In another exchange, an environmental leader urged the group's members to pull out because the demonstrations had turned violent. Freeport told The Times that local leaders later met with company officials and said "they had provoked the disturbances as a means of expressing their aspiration to receive greater benefits from our operations." *-*

Killing of Two Americans Near the Freeport Mine

In August 2002, two American teachers and an Indonesian colleague were killed and 14 others were wounded in an ambush in Papua near the Freeport-McMoRan mine on company road patrolled by the military that Freeport had paid to protect its employees. The teachers taught at Freeport International School in Papua. They were in a convoy of vehicles carrying mostly U.S. teachers and their families from the school. It was the worst spate of violence involving foreigners in Papua.

The attack was initially blamed on Papuan separatists but the fact it was carried out with automatic weapons, including M-16s led many to believed that Indonesian security forces were behind it not separatists who normally didn’t have access to such weapons. The attack was believed to have been ordered by military commanders in the area as a form of extortion. Freeport-McMoRan had recently cut payments to the military in the area and the killings, it was said, were how the military expressed its disapproval.

The incident caused the United States to thinks twice about establishing better relations and offering more military assistance to the Indonesian government. It also put foreign investors on the alert that Indonesia was not necessarily a safe place to do business. In January 2001, the United States government decided not let the matter affect military ties with Indonesia.

The F.B.I. investigated the case and in 2005 said the reasons for the killings have not been determined. Jane Perlez and Raymond Bonner wrote in the New York Times, “The United States indicted a Papuan, Anthonius Wamang, in 2004. But it has yet to receive the full cooperation of the military, several American officials said. Freeport employees and American officials said the killings could have been part of a turf war between the military and the police, each of which wanted access to Freeport payments. An initial report by the Indonesian police pointed to the Indonesia military, and some Freeport and Bush administration officials have said they suspect some level of military involvement. The police report suggested that the motivation was that Freeport was threatening to cut its support to soldiers. Soldiers assigned to Papua have "high expectations," the report said, but recently, "their perks, such as vehicles, telephones, etc., were reduced." [Source: Jane Perlez and Raymond Bonner, New York Times, December 27, 2005 *-*]

Violence Around the Freeport Mine in 2009

In July 2009, at least a dozen people were killed or wounded in ambushes along a road leading to the Freeport mine, prompting a massive security operation in the militarized zone that is off limits to foreign journalists. Associated Press reported: “A wave of attacks along a road to the mine has marked the worst violence to hit Freeport's operations in the restive province since in August 2002. At least 15 people, most of them police officers, have been killed or wounded along the 40-mile (65-kilometer) road from Freeport's sprawling Grasberg mining complex to the mountain mining town of Timika. [Source: Niniek Karmini, Associated Press, July 16 2009 <>]

“The assailants shot and killed a 29-year-old Australian and a Freeport security guard, while a policeman fell to his death in a ravine as he sought cover. Five police officers were injured by gunfire and taken to a Freeport-owned hospital, raising the number of wounded to 12, Papua's chief detective, Bambang Rudi, said. They were shot in the stomach, hand and thigh when "they were sprayed with bullets," National Police spokesman Brig. Gen. Sulistyo Ishak said. <>

“Investigators said they still do not know who is behind the shooting spree, but that the ammunition is standard military and police issue. Authorities initially blamed the ambushes on Papuan separatists with the Free Papua Movement, OPM, who have waged a low-level insurgency for 40 years. But official statements now refer to "an armed group" of professional marksmen. Several analysts have suggested that the violence is likely the result of a long-standing rivalry between paramilitary police units and soldiers competing for control of illegal multimillion-dollar protection and gold mining businesses around Freeport. <>

Indonesian Defense Minister Juwono Sudarsono asked people to refrain from speculating on police rivalry. However, he said that "rouge elements" in the military might have a hand in the unrest. "My own suspicion is there are criminal groups from within and outside Papua who have seen this as a lucrative business and it may be a battle over access," he said, estimating that illegal gold mining at the edges of Freeport's mining complex could earn a miner up to $3,500 per month - more than three times a minimum wage salary in Indonesia. <>

Three days later Associated Press reported: “Gunmen opened fire on buses carrying Freeport employees in restive Papua province, killing two people. The state news agency Antara reported two dead, but it did not identify the victims or say if they were shot. An Associated Press reporter was told by a policeman who witnessed the shooting that a police vehicle escorting the convoy flipped. Several injured officers were taken to a local clinic, the AP reporter said, one of them in critical condition. Two body bags were later seen being removed. The police officer did not think any Freeport employees had been hurt. [Source: Associated Press, July 22, 2009]

Freeport Strikes

In 2011, workers at the Freeport mine in Papua went on strike, demanding higher wages. The strike lasted for three months, caused copper and gold output to drop 15 percent and was Indonesia's longest-ever industrial dispute.

When the strike was over, the BBC reported: “The decision to end the three-month-long strike came after Freeport bosses agreed to an increase in wages. The strike crippled production at the mine.Freeport-McMoran has always been seen as one of the most powerful foreign companies in the country, with strong connections to the Indonesian government - but even the government was unable to solve this industrial dispute, says the BBC's Karishma Vaswani in Jakarta. [Source: BBC, December 14, 2011]

It took a 37 percent increase in wages, improved housing allowances, educational assistance and a retirement savings plan for workers to agree to a deal. This is being seen as a partial victory for Freeport's workers - even though their initial demands called for much higher wages, our correspondent says. The US firm did manage to put in some conditions of its own, however, agreeing with union leaders that future wage negotiations would be based on living costs and the competitiveness of wages within Indonesia. Our correspondent says that was presumably an attempt to prevent such a strike happening again.

Twenty-Eight Killed after a Tunnel Collapse at Freeport

In mid May 2013, twenty-eight people were killed after a tunnel at the Freeport mine collapsed. Freeport suspended operations at the complex after the tunnel caved in on 38 workers. It was was one of the worst mining disasters in Indonesia's history. The accident occurred near Freeport's largest underground mine in the area, outside of production areas.

Immediately after the collapse, Reuters reported: “A training tunnel collapsed at the world's second largest copper mine, trapping at least 33 workers underground, Freeport-McMoRan Copper & Gold Inc, said. Rescue efforts were under way at the remote Grasberg mine in Papua province. Output at the mine was not expected to be significantly affected, the company said."A tunnel in the underground training area collapsed, trapping a number of employees," the company said in a statement. "The rescue process is difficult and will take some time to complete." [Source: Michael Taylor, Reuters, May 14, 2013 >>>]

“At least 40 workers had been in an underground training facility when it collapsed, the statement said. Three people escaped unhurt, while four were rescued and received medical treatment. The collapse is one of a series of worker-related incidents at the mine in recent months. This month, a group of contract workers returned to work after successful pay talks ended a three-day work stoppage. >>>

In late May 2013, another tunnel at the Freeport mine collapsed. Reuters reported: A worker was fighting for his life after a new tunnel collapse at the Freeport mine, a union official said, calling on members to stop work at the huge copper mine after the second major accident in just over two weeks. "The victim is still in a critical condition. Hopefully, we can save his life," Papua-based union official Virgo Solossa told Reuters by telephone. He had earlier said the worker had been killed. "We hope this is the last incident ... that's why we ask the company to stop all activities at the mining area to review safety systems for the sake of the workers." Another worker at the mine, who asked not to be identified, said that two other workers were rescued and taken to hospital after the tunnel collapse at the Deep Ore Zone (DOZ) underground mine in the Grasberg complex. [Source: Yayat Supriatna, Reuters, May 31, 2013]

Impact of the Tunnel Collapses at Freeport Mine

Yayat Supriatna of Reuters wrote: :The accidents raise concerns over whether Freeport will have to default on shipments to customers.They also cast doubts over Freeport's ambitious plans to turn Grasberg into the world's biggest underground mining complex after 2016 when its open pit operations are due to end. Open pit mining currently accounts for two-thirds of production. "You have to ask questions of Freeport," said one Singapore-based industry source. "Is it the result of a seismic event, or has the underground mine become unsafe after the recent collapse?" [Source: Yayat Supriatna, Reuters, May 31, 2013]

Labor activists initially called for a strike after the tunnel collapses. In June 2013, the Wall Street Journal reported: “Thousands of workers at Freeport Indonesia's massive mining operations called off a planned strike after the company suspended five managers in the wake of a deadly underground accident, although the mining giant's production operations remain at a standstill. Union leaders representing three-quarters of Freeport's workforce of more than 24,000 said earlier that they would strike if the company took no action against five officials deemed responsible for the collapse of an underground tunnel that killed 28 miners. Union leader Virgo Sallosa said Friday that the strike had been canceled after Freeport said the officials wouldn't be active at the mine site during an investigation of the accident. In a release, the company said it had "reached an agreement" with union leaders and that workers would return to work maintenance activities at its mines. [Source: Ben Otto, Wall Street Journal, June 14, 2013]

“Production at all mines in the area has been halted since the accident May 14, with workers currently carrying out only maintenance duties until investigations into the accidents are completed. Freeport initially said it was suspending production operations out of respect for the deceased workers and that it hoped to resume work quickly, but the government has said production can't continue until investigations are completed, which could take months. The company has declared force majeure to free itself from obligations to deliver copper concentrate. Freeport said this week that the halt was causing a production loss of three million pounds of copper and 3,000 ounces of gold a day. It has estimated lost production at 80 million pounds of copper and 80,000 ounces of gold for the May 15-June 11 period.” [Ibid]

Image Sources:

Text Sources: New York Times, Washington Post, Los Angeles Times, Times of London, Lonely Planet Guides, Library of Congress, Compton’s Encyclopedia, The Guardian, National Geographic, Smithsonian magazine, The New Yorker, Time, Newsweek, Reuters, AP, AFP, Wall Street Journal, The Atlantic Monthly, The Economist, Global Viewpoint (Christian Science Monitor), Foreign Policy, Wikipedia, BBC, CNN, and various books, websites and other publications.

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© 2008 Jeffrey Hays

Last updated June 2015

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