Logo: Solidarity South Pacific

Corporate Facts

Foreign Investment in West Papua

This research is believed up to date as of January 2005.

The Freeport research was done by New Orleans SSP from a variety of sources.

The Rio Tinto research was done mainly by looking at company websites, and websites of NGOs. It is intended as a starting point for groups wishing to take action against companies investing in West Papua, and it is recommended that groups wishing to target particular companies do some further research into the company's activities themselves.

Do also see Partners in Crime (PDF file, 2.2Mb) - a Greenpeace investigation of the links between the UK and Indonesia's timber barons, particularly in Papua.

If you have further information on any of these companies or other companies operating in the region, please do let us know for includsion on this page.

Freeport in West Papua

"I could just as easily write about Freeport-McMoran, an American-based mining company committing genocide in southeastern Asia by destroying the environment of native cultures, dispossessing natives of their land, and mowing down with machine-gun fire those who resist."

-Derrick Jensen, The Culture of Make Believe

Brief Introduction

Freeport-McMoRan Copper and Gold Inc. is a multinational mining company headquartered in New Orleans, Louisiana (USA). Freeport's subsidiary, PT Freeport, operates the world's largest gold mine and third largest copper mine in the highlands of West Papua. Freeport became interested in West Papua in the 1950's because of the discovery of a large copper deposit, which was named Ertsberg by its Dutch "discoverer." In 1967 Freeport became the first foreign corporation to sign a contract with the Indonesian dictatorship. The Freeport-written contract gave themselves 30-year mining rights within a 250,000-acre area free of charge. More importantly, this contract was signed prior to the "Act of Free Choice," contained no obligations to either the Amungme or Kamoro peoples (who were excluded from negotiations), and required no environmental restrictions.

The Ertsberg mine was officially opened in 1973 by none other than General Suharto, the dictator of Indonesia. At this same ceremony he officially renamed the province "Irian Jaya," or "Victorious Irian." According to Denise Leith, author of Politics of Power, "[t]o all intents and purposes Freeport became a quasi-state organization for Jakarta in West Papua."1 By the late 1980's, Ertsberg had almost been completely mined out, and had garnered Freeport on average $300 million in revenues each year.2 In 1988 Freeport officially announced the discovery of the Grasberg deposit, which was to become its greatest moneymaker. It was also in this year that Freeport became Indonesia's largest taxpayer.

Freeport's role as a fontiering outpost for development in West Papua and it's providing of Indonesia with with taxes and military support means the mining giant has an integral role in the oppression and genocide of the West Papuan peoples.

See also: Freeport McMoRan: Committing Genocide in West Papua - PDF file, 0.5Mb. A leaflet about Freeport's involvement in military repression and environmental destruction in West Papua.

Freeport's Relationship with the Indonesian Military

The Indonesian government has essentially been a military dictatorship since its creation. General Suharto, who ruled from 1965-1998, came to power in a military coup that culminated in the massacre of some 500,000 Indonesian Communist Party members and suspected enemies of the regime. The Indonesian military, known as the ABRI, has a long history of murder, rape, torture and outright massacre. It is responsible for the hundreds of thousands killed in East Timor, Aceh, and of course in West Papua. The military, though not always acting as one homogenous entity, is the most powerful actor within the Indonesian state. So to do business in Indonesia, one must also do business with the military.

Freeport isn't just a passive victim in this situation. Freeport and its functionaries have actively cultivated an extremely close working relationship with the ABRI over the last thirty years, benefiting greatly from the protection it has provided. In 2002 Freeport first began publicly disclosing how much money they paid to the military each year. According to its 2003 SEC annual report they paid $5.9 million in 2003, $5.6 million in 2002 and $4.7 million in 2001.3 While not admitting how much it has paid each year since its mining operations began, they did admit in their 2002 SEC report that over time they have "constructed and provided infrastructure for housing, offices and related facilities at a cost of approximately $35 million."4

Each year this money goes towards food, housing, fuel, infrastructure, travel, vehicle repair and allowances to cover administrative costs for the military. According to Freeport's 2003 SEC report, the payments to the military are primarily compensation for the 2,300 troops that the Indonesian government provides. The "related facilities" that Freeport builds include security checkpoints and military bases, such as the naval base constructed in the Amamapare district downriver from the Grasberg mine. By the end of 1996 the Freeport concession area was the most militarized zone in all of Indonesia and up until 1998, West Papua was considered DOM (daerah operasi militer) or a military operations area by the Indonesian state.5

In 1995, due to the Australian Council for Overseas Aid (ACFOA), the relationship between the ABRI and Freeport came to international attention. The ACFOA report documented multiple cases of murder, torture and "disappearances" in 1994 and 1995. In recent years Freeport has claimed that they have no control over the military and are not responsible for its actions. Clearly though, the reason why the military has such a strong presence in the area is because of Freeport's mining operations, and the company has helped fund this presence for years.

The Freeport mine would not exist if the Indonesian military was not present to terrorize and murder the people who call West Papua home.

Freeport-McMoRan And The Environment

Freeport's mining operation is devastating for the environment of West Papua, which contains up to 7% of all the world's biodiversity. The destruction of this environment is an enormous loss in its own right, but the fact that the people of West Papua live as a part of this environment, and depend on it for survival, means that Freeport's actions guarantee the destruction of cultures and peoples that have been intimately connected to the forests, rivers, plants, and animals of the island for thousands of years. The infrastructure of roads, pipelines, and cities necessary for the mine's operation have contributed to the destruction of the lands around the mine. But the two major ways Freeport is destroying the environment in West Papua, aside from the massive pits being dug into sacred Amungme mountains and the infrastructural development, is with tailings and overburden. 6

Finely ground ore residues, or tailings, are dumped directly into the river systems near the mine. Freeport's operation was dumping tailings at the rate of 7,000 tons per day (tpd) in 1974, and now dumps 230,000 tpd into the Aghawagon River, which feeds into the Otomona and the Ajkwa Rivers before reaching the Arafura Sea. The tailings contaminate the river system and the sea with heavy metals such as mercury, lead, and copper.7 As tailings accumulate downriver they form new deltas and sediment dams, creating wide stretches of barren, silt covered land. An area miles-wide on either side of the rivers, which Freeport calls the "Tailings Deposition Area," is now a wasteland of tailings deposits, with all life smothered to death under a wash of toxic silt. In just 40 years the river systems have been dramatically changed, destroying the diverse plant and animal life found there. Freeport's swath of destruction in West Papua literally grows every day, as tailings continue to pile up and destroy the tribal homelands of native West Papuans.

There is also the overburden, or waste rock removed during mining. Freeport dumps 520,000 tons of overburden per day, and moves it by truck to nearby valleys and lakes, creating huge landfills of toxic dirt, some up to 1,250 feet high. Like the tailings, overburden contains large amounts of copper, iron, aluminum, and acid, which leach into the underground water table, poisoning springheads many miles away. The piles also contaminate the lowlands ecosystem with toxic rainwater run-off. Freeport is supposed to mix the overburden with limestone to buffer the toxic metals from leaching, but has never done this adequately, and even has a financial incentive not to do it.8 The size of the overburden dumps, in combination with high rainfall, has resulted in landslides, which have killed people, displaced communities, and smothered out plant life.

Green Wash

In the past several years, Freeport has ceded to pressure from NGOs and is now funding studies of the areas biodiversity and spending more money on environmental impact management. The biodiversity studies continue to uncover previously unknown species of plants and animals, revealing the incredibly precious nature of West Papuan ecology. However, the mine's impact has already been extremely destructive, and the money being spent now is nothing more than an attempt to stave off criticism and save face. All the while very little has changed as far as how the mine operates. Freeport continues to excuse their destruction on the grounds that their mine faces special circumstances due to its location on the top of steep mountains and cannot be held to the same standards as other mining operations. But to the people who've called West Papua home for centuries, their land, their way of life, their independence, and their freedom are all being destroyed by this mine, special circumstances or not.


References

  1. Leith, Denise. The Politics of Power: Freeport in Suharto's Indonesia. Honolulu: University of Hawaii Press, 2003. p. 4
  2. Leith, p.62
  3. Freeport-McMoran Copper and Gold Inc. 2003 SEC Annual Report.
  4. New Orleans Times - Picayune, Dec. 12, 2003, Freeport's Indonesia Ties Opposed
  5. Leith, p. 233 and p. 224
  6. The Amungme live in the highlands near the mine. "Backgrounder: Freeport-Rio Tinto's mine in West Papua" Mining Advocacy Network
  7. Mercury levels found in the Ajkwa River were 4 times the level recommended for safe drinking by the Indonesian government. Copper levels were found to be twice the normal level. Original PT Sucofindo Report 1997 ("Risky Business: The Grasberg Gold Mine")
  8. Leith, p. 172. "Despite the statement by Montgomery Watson that Freeport does not intend to allow leaching for later copper recovery, ore that exhibits higher AMD potential is reported to have been stored separately, in anticipation of milling at a later stage."

Rio Tinto PLC

Rio Tinto's exploration joint venture with Freeport McMoRan, and their 12% shareholding in Freeport McMoRan Copper & Gold, means that they are now seen to be in a major strategic alliance with Freeport, and are fully involved in the Grasberg mine. Rio Tinto PLC is the world's largest mining company and has been the focus of protests for decades.

Contact details:
Rio Tinto PLC, 6 St James Square, London SW1Y 4LD
Tel: 0207 930 2399

Members of Rio Tinto Group with UK holdings:

Anglesey Aluminium Metal Ltd
Penrhos Works,
Holyhead,
Gwynedd
LL65 2UJ

(produces aluminium - a joint venture with Kaiser Aluminium and Chemical Corp of USA)


Borax Europe
1A Guilford Business Park,
Guilford,
Surrey
GU2 8XG

(Borax mining, development and technology - wholly owned subsidiary)


Palabora Europe Ltd
1A Guilford Business Park,
Guilford,
Surrey GU2 8XG

(mines and supplies vermaculite - partly owned subsidiary)

Contact details of top institutional shareholders with UK offices

Citigroup Centre
33 Canada Square
Canary Wharf
London E14 5LB

State Street Bank Europe Ltd
One Royal Exchange Steps
Royal Exchange
London EC3V 3LL
Tel: 02078647000
For more addresses see State Street UK site
Jo Hambro (part of Credit Suisse Group)
21 St James Square
London SW1Y 4HB

Winterhur Life (part of Credit Suisse Group)
Winterhur Way
Basingstoke
Hants RG21 6SZ
Tel: 01526 470707
enquiries@winterhur-life.co.uk

Churchill Insurance (part of Credit Suisse Group)
Churchill Court
Westmorland Rd
Bromley
Kent BR1 1DP
Tel: 02083133030