Strike pressures PT Freeport Indonesia into serious negotiations

Alex Rayfield and Claudia King11 August 201

Indigenous Papuans are waging a four-decade long nonviolent struggle for independence from Indonesia. At the heart of Papuan grievances lies Freeport, the world’s largest gold and copper mine, owned and operated by US based company Freeport McMoRan and their Indonesian subsidiary PT Freeport Indonesia.

Perched on the western rim of the Melanesian Pacific, adjacent to independent Papua New Guinea is West Papua. Here, in a land so diverse that you can stand on a tropical glacier 15,000 feet high and peer down on the equator, indigenous Papuans are waging a four-decade long nonviolent struggle for independence from Indonesia. At the heart of Papuan grievances lies Freeport, the world’s largest gold and copper mine, owned and operated by US based company Freeport McMoRan and their Indonesian subsidiary PT Freeport Indonesia.

Recently trouble at the mine flared up again, as around 12,000 Indonesian and Papuan Mine workers and contractors went on strike, joined by local indigenous leaders. Walking off a job has never been so hard, Yan Ampnir told us. When he decided to join the mine workers’ strike in the remote Indonesian province of Papua, it was not a simple case of heading out the gate and driving home to his family. It involved a gruelling 40-mile trek down a roller-coaster road that plunges 8,400 feet down from the vertiginous cloud-cloaked mountain walls of Tembagapura, the remote mine base camp, to the sprawling swamp lowlands of Timika.


SPSI collection. Freeport Mine.

Tembagapura is a company town. The only people who live there are mine workers. After long shifts in the Grasberg open pit or in the underground mine, workers are bussed on four-wheel drive trucks back to Timika or the US lookalike suburb of Kuala Kencana, replete with shopping malls, manicured lawns and street lights, all carved out of the middle of the jungle. So, when the company refused to bus the workers outside the Indonesian military– guarded mine area, Ampnir and his compatriots picked up their bags and started walking.

Seventeen hours later the first group arrived in Timika; tired, wet, cold and hungry. Eight days later the strike ended. In the process some 12,000 mine workers (of a total workforce of 23,000) halted production at the world’s largest gold and copper mine, inflicting a loss of USD$95,000 per day on US-based Freeport McMoRan, Indonesian subsidiary PT Freeport Indonesia and their Anglo Australian partner, Rio Tinto.

After a quick search on the Internet, Albar Sabang, the local union branch secretary, hands us an excel spreadsheet. On it is a list of pay scales. Sabang is a mechanic who fixes heavy machinery like bulldozers and excavators. He has worked for PT Freeport Indonesia since 1994 and earns $3.00 per hour. He is one of the highest paid local employees out of a group PTFI calls “non-staff”. Others earn as little as $1.80 per hour, a wage that rose 98% after a similar workers strike in April 2007.

Sudiro (his only name) is a softly spoken tall Javanese man, unassuming in person. He is the local SPSI (Seluruh Pekerja Serikat Indondesia – or All Indonesian Workers Union) chair of the Freeport Mine Workers Union, an affiliate with the national SPSI network. Recently sacked by PT Freeport Indonesia for organising workers, he only just got his job back. “Of all the Freeport mines”, Sudiro tells us, “PT Freeport Indonesia is the most profitable. It has the lowest production costs. But workers are paid the lowest salaries. We are even paid less than Freeport mine workers in Mongolia and the Democratic Republic of Congo. That’s not right.”

A history of local grievances 

Freeport is emblematic of much that is wrong in West Papua.

The company’s Contract of Work was signed in 1967, two years before the Act of Free Choice was concluded, a referendum that was supposed to give the indigenous West Papuans a chance to say whether they wanted to be independent or part of Indonesia. In fact, there was no vote. Instead, 1,022 West Papuans, less than 0.01% of the population, were corralled into camps and told to “vote” for integration with Indonesia or have “their tongues cut out”. But it was not just the Indonesian government that consented to democratic fraud writ large; the US, Australian and European governments were also not prepared to contest the election or risk stability in the region for what one US Embassy source at the time called a handful of “Stone-Age illiterate tribal groups”.


SPSI collection.Strike Leaving Tembagapura.

The biggest prize of all was Freeport. Suharto declared the company a national asset and instructed the military to guard the mine, which led to a long history of human rights violations, including un-investigated mass killings, theft of Papuan land and massive environmental degradation, all of which has led to ongoing violent and nonviolent resistance.

This was the era before the notion of “free, prior, and informed consent” became best practice for extractive industries. According to local indigenous landowners, they still feel that they have not been consulted or their rights respected.

As the Amungme people’s sacred mountain is consumed, tailings are dumped in the Ajkwa River at the rate of 200,000 tons a day. The result: over 30,000 hectares of rainforest have been wiped out and huge levee banks built to stop Timika from being smothered by sludge waste. In the process, Freeport became a lightning rod for all Papuan grievances.

Although the company tried to respond to local indigenous West Papuan grievances by hiring Papuan staff and redirecting 1% of the profits to support members of the local seven tribes, new problems continue to be added on top of old, unresolved issues. The local tribes (a number of whom work in the mine) and Freeport mine workers from elsewhere bring in massive profits for the company. They work under extreme conditions at high altitude but feel like they have little stake in the company and few worker benefits.

“We are not valued as human beings. We are treated as an instrument of the company. Our goal is to get to a position where we are treated as human” says Sudiro.

According to miners interviewed in July 2011, many workers are forced to take out bank loans to pay for basic needs and to support their families. After retirement, some must seek alternative types of income. Yet when workers attempt to raise these issues with Freeport management, they have received warning letters from them in return.

“It seems like the company sees us as the troublemakers. But,” says Sudiro, referring to workers’ contributions to gold and copper production, “we are the solution-makers.”

SPSI finds its teeth 

SPSI PT Freeport Indonesia is one local branch of the national labour union federation of Indonesia. The organization has represented PTFI mine workers in 16 Collective Labor Agreements (CLA) dating back to 1977. But until recently it functioned as little more than a rubber stamp for company policies.

Freeport has a history of suppressing workers’ rights and union organizing. Under Suharto, independent labour organising was prohibited. Those that tried were often killed or spent years in jail. But over the past decade, as political space has slowly opened up, Sudiro and other workers have been quietly organizing. But because of the closed-off nature of West Papua, they have done so through exchanges on the Internet, educating themselves on best practice and lessons learned from unions in other parts of the world. “We particularly admired the quiet, peaceful way Japanese workers raised their grievances,” said Sudiro.


SPSI collection. Strike Congregate at Tembagapura.

SPSI PT Freeport Indonesia’s mission and objectives are limited to workers’ rights and their tactics are exclusively nonviolent. But they continue to be associated with violence and separatism. “We use a peaceful way. We don’t want to get into the political arena, this is not our area. We just want to struggle for our rights, and to have the same rights as workers elsewhere.”

Campaigns to educate fellow mine workers about their rights and the role of unions in protecting workers seem to be paying off. Reflecting on worker participation in the recent strike, Sudiro said, “The workers finally opened their eyes and minds to the situation. The company cannot stop this. We have woken up. We will never go back to how we were treated before the strike.”

Nevertheless, SPSI Freeport members continue to face threats and intimidation from the company. When two of the union members travelled to Jayapura to seek advice from Papuan leaders, they were followed by Indonesian security forces who have long been paid by Freeport to guard the mine.

“The company does not like us organizing for workers’ rights, but we are not doing anything wrong. The strike is an action that is guaranteed by the law. Indonesia is a member of the ILO and the ILO is very clear. We have the right to form a union and we have done so according to Indonesian law” says Sudiro.

Article 104 (1) of Indonesian National Law Number 13, 2003 explicitly states: “Every worker/ labourer has the right to form and become a member of a trade/ labour union.”

The decision to strike 

The company has utilized a range of “dirty” tactics to avoid dealing with SPSI demands over wages and conditions. One of the most galling for mineworkers was the creation of a ‘new’ union aimed at pushing out SPSI’s union. The new union was created in response to SPSI Freeport mineworkers’ agitation around wages and conditions.

At the same time the company declared the SPSI Freeport Mine Workers Union – an organisation that has grown from a low of 4,000 to 8,200 members – illegal, and promptly fired six of the leadership including Sudiro himself. The only problem was this ‘union’ had no members. Its board was appointed by Nur Hadiah, a lawyer based in Jayapura, in violation of SPSI regulations. “It was a completely fake union” said Sudiro.

The reaction from the workers? An overwhelming decision from all of the 254 union representatives to strike and nearly 100% participation from SPSI Freeport union members. “We were up against a wall. We had no other choice,” Sudiro said.

But the strike was not just about wages. “We wanted the company to recognise the union, the right to freely organise, and to reinstate the six SPSI Union leaders who were dismissed by Freeport for conducting union business” said Sudiro.

 

SPSI collection. A female striker
After more than a week of strikes and continuous demonstrations, on the evening of July 11 PT Freeport Indonesia gave in to SPSI’s

demands. They reinstated the union leaders without any deduction in salary, agreed to pay the wages of all striking workers for the duration of the strike, agreed to recognise SPSI Freeport Mine Workers Union as the sole legal representative of Freeport mine workers and also agreed to enter into Collective Labor Agreement negotiations. Those negotiations opened Wednesday July 20 at the Freeport-owned Hotel Rimba Papua in Timika. They are still continuing and according to Company sources are not expected to finish until 19 August. Both workers and management are remaining tight-lipped about their progress.

The seven tribes

The current  (seventeenth) Collective Labor Agreement negotiations are different. They are not only about wages and conditions. They also concern the company’s relationship with local landowners, the Amungme and Kamoro, as well as five other major highland tribes – the Dani, Moni, Damal, Mee/Ekari and Nduga.

Amungme tribal elder Hengky Uamang speaks to us at one of the SPSI union leaders’ rented duplex house in the back lanes of Timika. His voice is quiet and one of his compatriots translates from Amungme into Indonesian so that we can understand what he is saying. His message is simple and profound.

“My heart is broken. It is as if we are not human beings but a piece of gold to be consumed. I am gold but I get no benefit.” Tears slowly roll down his face.

Others in the crowded living room become angry. “Does Moffet (the US Chair of Freeport McMoRan) have no shame?” Jecky Amisim rhetorically asks. “Does he not fear God? Don’t you people in America know that if you come to someone’s place and want to take something, you have to ask first?”

The seven tribal leaders nod in agreement. Sudiro tells us: “If these negotiations fail, we will see it as a death of democracy.”

“If Moffett and Armando Mahler (the president of PT Freeport Indonesia) can’t help us, if the wealth of these mountains do not bring a benefit to us the local tribes, the workers and the people of Papua,” says Mr. Amisim, “then it is better we just kick this company out.”

The strike may be over,  but as union and management begin month-long negotiations over their biannual Collective Labour Agreement, the company continues to face the possibility of continued disruption from disgruntled workers and restive landowners seeking significant changes after years of opposition to Freeport mining.

“This article was originally published in the independent online magazine www.opendemocracy.net

About the authors
Alex Rayfield is a freelance journalist based in Timika
Claudia King is a freelance journalist reporting from Timika


BBC: US Firm Freeport Struggles To Escape Its Past In Papua

August 8, 2011By Karishma Vaswani BBC News, JakartaThe US mining firm Freeport McMoRan has been accused of everything from polluting the environment to funding repression in its four decades working in the Indonesian province of Papua. A recent spate of strikes by workers has brought all those uncomfortable allegations back to the surface.

“Ask any Papuan on the street what they think of Freeport, and they will tell you that the firm is a thief,” said Neles Tebay, a Papuan pastor and co-ordinator of the Papua Peace Network which campaigns for more rights for local people.

“It is in the interests of the Indonesian government that Freeport stays in Papua because it pays so much money to the state.”

For decades, a small number of Papuans have fought an armed struggle for independence from Indonesia.

But Neles Tebay believes the US mining firm plays a crucial role in that struggle: “Papua will never become independent as long as Freeport is in Papua.”

Yet Freeport says it provides vital jobs and wealth to the people of Papua. It is a decades-old row.

Massive profits

In the mid-1960s, Indonesia was undergoing a political transformation – and facing potential economic collapse. The government led by General Suharto was desperate to gain legitimacy with the international investment community – a hard task when Indonesia was seen as a risky market.

Suharto got the legitimacy he was looking for in 1967 – when Freeport became the first foreign company to sign a contract with the new government. In exchange, Freeport got access to exploration and mining rights for one of the most resource rich areas in the world.

In 1988, Freeport literally struck gold, finding one of the largest known deposits of gold and copper in the world at Grasberg in Papua.

Today, Freeport is one of Indonesia’s biggest tax-payers. In the last five years the firm says it has paid about $8bn (£5bn) in taxes, dividends and royalties to the Indonesian government. In the second quarter of this year alone, the company saw its profits double to $1.4bn.

But all of that money has yet to buy Freeport the reputation it needs in Papua. Thousands of Papuan workers walked out last month complaining about their wages, which they say are a fraction of what their international counterparts get.

Most Papuans believe that a contract Freeport signed with the Indonesian government in 1967 is invalid, because it was signed two years before Papua was officially incorporated into Indonesia by a controversial referendum.

The company says it signed a new 30-year contract with the Indonesian government in 1991, with provisions for two 10-year extensions.

But Papuans dispute the length of the deal, and the number of extensions Freeport has been able to get from the Indonesian government. Critics say Suharto wrote a blank cheque for Freeport, allowing the company to operate in any way it chose with little regard for consequences.

“The initial contract started in 1967, and was meant to end in 1997,” said Singgih Wigado, director of the Indonesian Coal Society.

“But in 1991, Suharto’s government renewed it – and then extended it for another 30 years, so now it ends in 2021. But Freeport is also entitled to two extensions during this period – of 10 years each. So Freeport’s contract really only ends in 2041.”

‘Law unto themselves’

By then, environmentalists allege that Freeport will have not only ripped all of the mineral wealth from Papua’s soil but it will also have destroyed the local waterways and killed off the marine life in the rivers nearest to the mine.

The lobby group Indonesian Forum for the Environment accuses Freeport of dumping hazardous waste into rivers.

“We’ve seen no improvements in their operations. The local communities are suffering because of Freeport’s presence in Papua,” said the group’s Pius Ginting.

But Freeport disputes the claims, saying that it uses a river near the mine to transport waste and natural sediments to a large deposition area. This method, the company says, was chosen because studies showed it was the most feasible way of disposing of the waste, and the environmental impact caused by its waste material is reversible.

In a statement, the company argued that the current arrangement with the government was fair, and has resulted in significant benefits.

Some of those significant benefits include providing employment to scores of Indonesian police who are mandated by Indonesian law to protect the Grasberg mine. This used to be the job of the Indonesian military, who are still sometimes asked to provide extra support for the mine by the police.

Freeport estimates that it spent $14m on security-related expenses in 2010.

But human rights groups say Freeport is effectively financing the Indonesian military in Papua, and is turning a blind eye to the soldiers’ alleged human rights abuses in the province.

Andreas Harsono of Human Rights Watch says there are about 3,000 troops in the area, some of whom “tend to act as a law unto themselves”.

“They sometimes go beyond their duties of providing security to Freeport – and are also believed to be involved in illegal alcohol sales and prostitution,” he says.

The Indonesian military has consistently denied any wrongdoing in Papua.

Freeport defends its use of police and soldiers to guard the Grasberg mine, saying it is mandated under Indonesian law. Freeport has never been implicated in any human rights abuses allegedly committed by the Indonesian military in Papua.

Nevertheless, the company remains hugely controversial in the restive province.

“Freeport is a symbol of everything that is wrong with Papua,” said pastor Neles Tebay.

“Indigenous Papuans want to feel like they have control over their own future – and that means a right to safeguard their natural wealth.”

The BBC has requested to travel to Papua and visit the Grasberg mine, but access has so far been denied by Freeport.

Empty promises whitewash Freeport’s rights, responsibility record

 http://etanaction.blogspot.com/2011/08/empty-promises-whitewash-freeports.html

Special for ETAN‘s  Blog

by David Webster

What does a mining company need to do to get a top score for “corporate social responsibility”?

Freeport's contribution to Papua's welfare - Riverine tailings pollution

To judge by the recent “100 Best Corporate Citizens List”, all it takes to finesse a long and controversial record of human rights abuses is to come up with a piece of high-minded rhetoric, then carry on as usual.

Human rights advocates and those who have studied the record of Freeport McMoran in West Papua were startled to learn that Corporate Responsibility Magazine had named Freeport as the 24th-best corporate citizen in America (click for the full list). More startling still, the company scored well based mainly on a sixth-place ranking in the human rights category.

How is this possible? Well, the survey’s methodology seems to pay no heed to human rights performance. Only human rights rhetoric matters. And in that, Freeport excels. A strong written policy on human rights declares: “Freeport-McMoRan does not tolerate human rights transgressions.” It points to rights risks in West Papua, Peru, and the Democratic Republic of Congo, and adds that PT Freeport Indonesia policy is to “notify the direct commanders of the perpetrators” in cases where human rights allegations are made against Indonesian security forces. Since reputable human rights groups suggest that the top ranks of the security forces are implicated in widespread human rights violations in West Papua, this is hardly striking at the root of the problem.

As local people have pointed out, and researchers have confirmed, Freeport’s performance is a far cry from the written policies. The main trouble is intimate ties to Indonesian security forces.

Security forces may be implicated in the murder of American citizens near the Freeportmine, as Eben Kirksey and Andreas Harsono have reported.

Violence around the mine is used by security forces to target and scapegoat local people. In 2005, the New York Times revealed thatFreeport paid the security forces more than $10 million in 2001 and 2002. Payments are now made “in-kind” rather than in cash. The local Amugme people have long protestedFreeport seizure of their lands. Pictures of Freeport’s Grasberg mine from space (left) show the scale and environmental impact in the mountains that are home to the Amungme.

And lest all of this be hailed as “old news,” the Amungme filed a lawsuit last year sayingFreeport had taken their lands illegally. Meanwhile, the Indonesian army’s presence around Freeport, and the company’s close ties to Indonesian security forces, were reinforced this year. The continuing alliance between Freeport Indonesia and the Indonesian security forces is likely to exacerbate, rather than improve, the human rights situation.

None of these reports are taken in to account in the “100 Best Corporate Citizens List.” All the human rights indicators measure “human rights disclosure” and the sole source, according to the methodology details, comes from “Company public disclosures” – a corporation’s own information about itself.

The methodology, in other words, measures promises, not performance. There are parallels to the debate over whether companies accused of operating sweatshops overseas can be trusted to police themselves, or should accept independent monitoring. Thus the list cites the voluntary “Sullivan principles” first created under the Reagan administration and welcomed by companies resisting demands to divest from apartheid South Africa. AndFreeport boasts of adherence to the Voluntary Principles on Security and Human Rights, launched by the British and American governments in 2000.

The key word here is “voluntary.” As with the mining industry globally and with businesses jumping on the corporate social responsibility (CSR) bandwagon more generally, companies are happy to promise good performance, as long as no one will be looking over their shoulders.

So perhaps it’s no surprise to learn that Corporate Responsibility Magazine is in fact published on behalf of the Corporate Responsibility Officers Association, a body made up of many of the companies being judged, and steered by such firms as Domtar and KPMG.Freeport is listed as a “recent member” of the CROA. It’s advanced in the listings – it was ranked 83rd in 2010.

The problem here isn’t just the “corporate social responsibility” methodology, but the entire concept of “CSR”. It can all too often be used by companies to buy their way out of “corporate social irresponsibility.”

Freeport is no champion of the best values of corporate citizenship: For human rights activists, it’s long been a poster child for corporate irresponsibility. A list of good corporate citizens with Freeport winning laurels demonstrates more than flaws in the study. As George Monbiot has written of climate change credits, the lists offer corporations a new form of medieval European Catholic “indulgences,” forgiveness for any form of offence. Jeff Ballinger recently pointed out on this blog that companies like Nike are wrapping themselves in the CSR garment to burnish their corporate images, despite continuing disregard for many labor rights. Freeport, too, is now having itself measured for a fine CSR wardrobe.

—-

David Webster is an assistant professor of International Studies at the University of Regina inSaskatchewan, Canada. He is a former coordinator with the East Timor Alert Network/Canada.

see also

West Papua Report (monthly)

ETAN/WPAT: Statement on the operations of the Freeport McMoran Mine in West Papua, to the U.S. Senate hearing on Extracting Natural Resources: Corporate Responsibility and the Rule of Law

Freeport Indonesia, Union Pay Talks Enter Third Day

Grasberg mine
Image via Wikipedia

JAKARTA, July 22 (Reuters) – Negotiations between Freeport McMoran Copper & Gold and its workers in Indonesia over pay entered the third
day on Friday, industry sources said, as the mining giant reported
losses of copper and gold after a strike at its massive mine.

Chief executive Richard Adkerson said on Thursday the aggregate impact
of production lost during an eight-day strike at the Grasberg mine in
Papua province was 35 million pounds of copper and 60,000 ounces of
gold.

Adkerson also said the strike, which ended on July 13 and production
resumed a day later, led to a temporary suspension of all mining,
milling and concentration shipments from the mine.

“The talks are ongoing but the details are not disclosed to the
public,” said an industry source in Jakarta, who has seen Freeport’s
notice on the talks.

“The meeting is attended by PT Freeport Indonesia’s union team and
witnessed by representatives from the company’s management team.”

A Freeport spokesman in Jakarta did not reply to an email inquiry.

Union leaders started pay talks with the U.S. miner on Wednesday in
the Indonesian part of New Guinea, as they push for a doubling of
salaries for workers earning $1.50 per hour, saying other Freeport
workers around the world get 10 times that.

The company is negotiating with the union on a contract due to be
renewed in October.

The New York-listed firm reported a doubling in second-quarter
profits, citing soaring metal prices and higher copper sales than
expected at its North American mines, but said that costs are creeping
up and it expects to sell less copper in the third quarter.

That outlook, combined with a fall in copper price on Thursday and
some analysts’ concerns with the nagging uncertainties over the labour
situation in Indonesia, led to a more than 1 percent drop in Freeport
share price.

Gold was steady around $1,589 an ounce on Friday, not far from a
record around $1,609 hit on Tuesday. Three-month copper on the London
Metal Exchange edged down to around $9,650 a tonne.(Reporting by Lewa Pardomuan and Samuel Wanda; Editing by Ramthan Hussain)

Freeport employees want human rights violator sacked

JUBI, 18 July 2011Following the violation of human rights that were perpetrated by personnel working for Freeport Indonesia,  there have been calls for the perpetrator, Nurcahyo to be sacked by the company.

‘We dont want that person to go on working here because he is bound to continue with his habits of discrediting indigenous Papuans.  We have experienced these things because of some trivial mistakes. Does the company want a repetition of recent actions,’ said one worker who didn’t want his name to be identified, when asked to confirm the action.

The matter was said to be closed after the person concerned was given a second warning.  For some of the staff, a very simple thing can result in the worker being sacked without mercy.

It appears that the person involved in this latest case is a superintendent  working at the Marine Section of the company named Nurcahyo who committed these human rights violations which are forbidden within the company. When there is clear evidence that someone has committed such things, that person is immediately sacked. Yet in this case, the man in charge of the human rights department, SemiYapsawaki, was simply given a second warning.

There have been many cases like this, according to JUBI, which recently triggered a strike at the company.

‘We want this person to be sent home because this is not the first time that he behaved in such a way. We hope that the management will take action against this person who can cause further major problems  in the workforce,’ said this source.

Attempts to contact the management, including the Manager, Juarsa, were not successful as he did not respond on his hand phone.

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