Ben Oostdam story # 532

FREEPORT, INDONESIA and the USA

Copper, Gold, and Politics combined with
Environmental and Human Degradation

source



Wealth and poverty, cheek by jowl
      
For nearly forty years, the operations of Freeport
have provided the Indonesian state with substantial
earnings in the form of royalties, dividends and
taxes, becoming by far the country’s largest taxpayer.

According to a statement by the company earlier this
year, Freeport paid a total of $1.8 billion 
(Rp 17 trillion) to the Indonesian government in 2007,
consisting of corporate income tax, employee income tax,
regional tax and other taxes totalling $1.4 billion,
royalties of $164 million and dividends worth $216 million.

  This was higher than in 2006 when the figure was
$1.6 billion. These figures show a hefty increase from
its payments to Jakarta in the previous five years
when the total was $6.9 billion.xvi

Freeport chairman, Jim-Bob Moffett and the company’s
chief executive officer, Richard Adkherson, have pocketed
huge earnings. According to a federal regulatory filing
in June last year, Moffett’s earnings totalled
$32.8 million in 2006, consisting of $2.6 million in
salary, and $27,400,000 in cash incentive payments.
He also received $234,864 in above-market or 
preferential earnings on deferred compensation and
$2,331,292 in perquisites and other compensation,
including contributions to his retirement plans,
$278,644 in personal use of company aircraft,
and $92,532 in insurance premiums.
The chief executive had to make do with a bit less,
earning a salary of $1.25 million, $3,532,000 in cash
incentives and stock awards with an estimated value
of $18,048,000, plus more than $2 million in deferred
compensation and contributions to his retirement plans.

As for Papuans whose resources these men have plundered
for so many years, the vast majority are poor by any
standards and still worse, they are becoming
marginalized in their homeland with the arrival of
hundreds of thousands of migrants from other parts
of Indonesia. Poverty is the fate even of Papuans
living in the vicinity of Freeport.
According to the Mimika Statistics Agency, more than
half the population in the regency, which is where
Freeport is located, live below the poverty line.
As many as 28,000 of the 45,000 families are poor
and lack access to health care. M
Many of the houses in Timika as well as in Kwamki
Lama villages, Karaka Island and Asmat village
in East Mimika district are unsuitable for habitation.
‘Mimika is one of the biggest mining areas in the
world but its people are still categorised as poor.’

 According to research carried out in 2002,
 health service care in Papua ‘is below acceptable
 standards’. The investigation concluded that
 36.1% of Papuans had no access to health facilities
 while 61.6% had no access to clean water.
 The percentage of undernourished children under
 five was 28.3%.xvii

Following the political demise of Suharto,
there were calls for the contract with Freeport to be
renegotiated but these have led nowhere.
One government minister said that pressure on
Freeport might damage Indonesia’s reputation
in the eyes of other potential foreign investors.

Suharto’s generous giveaway to a far-away US mining
company was nothing less than the rape of Papua,
assets stolen from the people of Papua that left
them destitute and deprived them of the right to
determine how, by whom or indeed whether their 
natural resources should be exploited.
(Left) : Satellite Map
downstream from Grasberg:
tailings in purple


LINKS:

Papua Pride, November 28, 2009
Freeport - McMoRan - by Wikipedia
Grasberg Mine Pit - by Wikipedia
Environmental Damage at Grasberg
Visit to Grasberg -
by Dr. Kurt Friehauf
of Kutztown University, PA

Satellite Map


BLO fecit 20091104 - stories