Tag: World’ s largest hole in the ground

Freeport Mine Managers turn rabid on Indonesian Grasberg Strikers

Grasberg mine
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PT Freeport Mine Managers Turn Rabid on Indonesian Grasberg Strikers
26 September 2011

ICEM InBrief

Government-mediated talks broke off last week and labour relations further soured between Freeport-McMoRan and 8,000 striking Indonesian miners of ICEM affiliate FSP-KEP (SPSI), the Trade Union of Chemical, Energy, and Mine Workers (CEMWU). The PT Freeport Indonesia Workers’ Union this week meets the halfway mark of its 30-day strike that now could be prolonged at the world’s largest gold and third largest copper mining complex – Freeport McMoRan’s Grasberg mine in eastern Papua Province, New Guinea Island.

Management spite was apparent at the strike’s start on 15 September and it worsened following the breakdown of three days of talks with the Manpower Ministry in Jakarta on 22 September. PT Freeport managers relieved 138 union shop stewards of their job duties on Friday. The union responded by stating the strike likely will be extended beyond 15 October.

Since the wage, pension, and community funds strike started, managers have coerced workers to return to work with threats of dismissal, they have pressed contractors’ employees into production, and now they try to decimate the union by sacking union stewards and isolating the branch union’s other leaders.

PT Freeport management has attempted to coerce workers to sign a statement saying they will return to work or face getting fired. But despite this, only 500 workers are manning operations and many are staff of contractors. (See a list of contractorshere.)

Freeport-McMoRan last week issued a statement last week saying it was losing three million pounds of copper production daily, and 5,000 ounces of lost gold output daily. To increase pressure on miners to abandon the strike, the company also warned of lost revenues to the Indonesian government and to the seven native groups around Timika, Papua, that Freeport-McMoRan is obliged to support.

The opening salvo came at the strike’s outset when Managing Director Armando Mahler announced a “no-work, no-pay” policy. After last week’s mediation failure, union and government sources said “complete distrust” exists between Mahler and his team and the union.

Thus, PT Freeport Indonesia Workers’ Union asked that US-based Freeport-McMoRan Chairman James Moffett enter discussions. Mine union leaders remember Moffett’s visit a few years ago when he encouraged workplace leaders to engage in “win-win” principles of labour relations.

At last week’s mediation, PT Freeport, 91% owned by Freeport-McMoRan and 9% by Indonesia’s government, said it would not budge from a wage offer of 11% in each year of a two-year accord. (The bi-annual contract comes due on 1 October.) The average miner’s wage rate at Grasberg is US$1.50-per-hour. The union was seeking a doubling of that to US$3-an-hour but in mediation last week, the FSP-KEP miners’ branch union offered a compromise and proposed a 65% increase. The company would not move from 11%.

It has offered slight increases in education and housing support and in shift pay, but has said it would not deviate from wage increments that other foreign investors pay in Indonesia. It also refuses to base a pension scheme – 50% paid into by workers – on multiplied years of service, or hear the union’s demands for enhanced development and opportunities for the indigenous people of Papua.

Grasberg is Freeport-McMoRan’s biggest revenue maker and a year ago, the company’s chief financial officer called it “very low cost and a high cash flow generating asset with a very long life.” The company’s revenues this year from Grasberg are expected to be lower because it is mining lower-grade sections of the open pit mine. But Freeport-McMoRan is bullish on the future; it is developing a deep underground mine adjacent to Grasberg that contains high grades of copper and gold in the same ore body.

The ICEM has intervened in this dispute and through its Indonesian Affiliates’ Union Chairman, D. Patombong Sjaiful of FSP-KEP’s CEMWU, is giving direct aid and support to the Grasberg strikers. They need the solidarity and support of all miners and all trade unions in mining and other industrial sectors. Please send a short message in your own words to the PT Freeport Indonesia Workers’ Union.

In ICEM outreach to the union, when asked to characterise the strike, one officer responded by saying, “determination. That’s the one word that describes workers. We’re determined to change our future through the work we do for this company.”

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West Papua: A history of exploitation -Opinion – Al Jazeera English

West Papua was taken over by Indonesia in 1969, and a legacy of oppression and environmental devastation has followed.
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The Grasberg mine has damaged surrounding river systems, such as the Ajikwa river above [West Papua Media]

Investing in conflict-affected and high-risk areas is a growing concern for responsible businesses and investors. Companies based in developed countries often operate in lesser-developed foreign markets, where governance standards are lax, corruption is high and business practices are poor.

These pieces focus on one specific Anglo-Australian company and their American partner that jointly operate a mine in West Papua, one of the poorest provinces of Indonesia. The risks for the company include the potential to contribute to environmental and social damage in a foreign market. The risks for investors include financing a company that does not get its risk management right.

This is the second chapter of a four-part essay that examines how the Norwegian Pension Fund came to blacklist the mining giant Rio Tinto. The first part can be found here.

Part 2: A history of exploitation

New Guinea, geographically as well as historically, is Australia’s closest relative. Separated from the mainland during the last glacial period, the waters filled in what now separates them: about 152km of the Torres Strait.

While Australia and New Guinea both have enviable mineral stores, economic and political exploitation has left the latter as home to many of the poorest people on Earth. New Guinea is also an island of two histories.

The eastern half forms the independent state of Papua New Guinea – a status it has enjoyed since breaking from Australia in 1975. With its natural resources of oil and industrial metals, Papua New Guinea has long been exploited for its minerals at places like Ok Tedi and Bougainville.

Both projects ended in social and environmental disaster. The environmental impact of Ok Tedi was so great that, in 1999, Paul Anderson, then chief executive of Australian mining company BHP, conceded that the mine was “not compatible with our environmental values”. But it did serve the company’s pursuit of profit. It was not until the Ok Tedi environmental disaster three years later that the true impact of BHP’s mining practices came to the attention of the global public. BHP subsequently sold its interest, established a fund to restore the sustainable development of the affected people, and received immunity from further prosecution.

The western half of New Guinea has had a lesser-known but equally tragic history centred around the Jayawijaya Mountain, home to the Amungme, and farther downstream, the Kamoro people. As with much of East Asia, the indigenes were under Dutch rule when a geological expedition in 1936 located a significant ertsberg (ore mountain) deep in the southwestern highlands. World War II intervened, and the Japanese claimed Indonesia and some of the western parts of New Guinea.Following defeat in the war, the Japanese were marshalled back to their home territory, and Dutch colonialism resumed. Importantly, when Indonesian independence was obtained from the Dutch in 1949, few knew of the ertsberg (mineral ore) hidden deep in West Papua’s wilderness.The Dutch began a ten-year Papuanisation programme in 1957 that would see West Papua handed back to the indigenes, and would create the independent state of West Papua around 1972.Despite multiple territorial claims, the ore mountain lay dormant for over 20 years.On March 6, 1959, the New York Times reported the presence of alluvial gold in the Arafura Sea just off the coast of West Papua. Reminded of their earlier discovery, Dutch geologists were said to be returning to the ore mountain, now simply known as Ertsberg.Independence deniedThe indigenes, meanwhile, as part of their programme toward independence, established a Papuan National Council and provisional government as well as their own military, police force, currency, national anthem, and flag. At the time, West Papua’s independence was due before the United Nations Decolonisation Commission, and representatives took part in various cultural and political activities throughout the region. By December 1, 1961, the West Papuan “Morning Star” flag had been raised alongside the Dutch for the first time. Many assumed that independence was imminent.Unbeknown to both the indigenes and the Dutch, US mining company Freeport-McMoRan Copper and Gold was negotiating directly with Suharto – at the time an Indonesian army general – for a small group of its experts to prospect this ore mountain. The path into West Papua through Suharto promised to be fruitful for Freeport, since its board was stacked with the Rockefeller’s Indonesian oil interests who already were versed in the general’s way of doing business. An exploration agreement was reached, and soon after a geologist from Freeport was forging his way through the wilderness toward Ertsberg.West Papua was about to change hands again.Armed with Chinese and Soviet weapons, as well as an increasingly public friendship with the communists, Indonesia declared war on the Netherlands. To protect Western interests from the threat of communism, on August 15, 1962, the United Nations and the United States orchestrated a meeting between Dutch and Indonesian officials during which interim control of West Papua was signed over to Indonesia.Six years of UN interregnum followed, after which a plebiscite would decide whether to form a separate nation or integrate into Indonesia. All 815,000 West Papuans were to vote in an Act of Free Choice.To ensure a favourable outcome, the Indonesians worked to suppress Papuan identity. Raising the West Papuan flag and singing of the national anthem were banned, and all political activities were deemed subversive. Indonesia ruled through force, for self-interest. Alarmed by ongoing media reports, on April 5, 1967, in the British House of Lords, Lord Ogmore called for a UN investigation. By early 1968, with Suharto having assumed the presidency of Indonesia, a US consular visit almost unanimously agreed that “Indonesia could not win an open election” in West Papua.West Papua still wanted its independence.In a desperate attempt to secure West Papua’s right to self-determination, two junior politicians crossed the border into Australian-administered Papua and New Guinea on May 29, 1969. They carried damning evidence of Indonesian repression; the hopes of a yet-unformed nation rested on the politicians reaching the UN. As Australia and its allies were amenable to Indonesian control of West Papua, the two were imprisoned upon crossing the border until after the referendum. Their brave plea was silenced.Between July and August 1969, less than a quarter of one per cent of the population – some 1,026 West Papuans – signed the country’s freedom over to Indonesia. The election, held under the aegis of the UN, was far from an act of free choice. The following day West Papua was declared a military operation zone, the local people’s movement was restricted, and expression of their national identity banned under Indonesian law.Poor, neglected West Papua.Selling West PapuaControl of West Papua proved a lucrative business deal for the Indonesians. Two years prior to the Act of Free Choice – coincidentally on the same day the plight of Papua was raised in the House of Lords – Freeport signed a contract of work with the Suharto government entitling a jointly owned company, PT Freeport Indonesia (Freeport-Indonesia), full rights to the Ertsberg mine. In return, Indonesia would derive significant tax revenues and fees as well as a minority 9.36 per cent shareholding. Without the authority to do so, Indonesia nevertheless cut itself into a deal that sold large tracts of West Papua to the US company, intent on sifting it for copper and gold.Although Ertsberg fulfilled its promise, as production slowed in the mid-1980s, Freeport-Indonesia began to explore surrounding mountains and ridges for other reserves. As is often the case, the best place to establish a new mine is next to another. Sure enough, significant copper and gold reserves were located at Grasberg only a couple of miles southwest of Ertsberg.Grasberg has the largest recoverable reserves of copper and gold in the world. It’s also Indonesia’s economic beachhead.Observing the Grasberg mine via Google Earth, one sees a scar like no other: Located about 13,000 feet (4,000 meters) above sea level, open-pit (above ground) mining has bored a hole through the top of the mountain more than half a mile (1 km) wide. What they’re digging for is more than $40bn worth of copper and gold. Every day the operation discharges 230,000 tons of tailings (waste rock) into the Aghawagon River. This process is expected to continue for up to six more years, at which point exploration will go underground until there’s no value left. Freeport estimates that will occur by 2041.The operation is so large that it has shifted the borders of the adjacent Lorenz National Park. Listed as a World Heritage site by the UN’s Educational, Scientific, and Cultural Organisation (UNESCO) in 1999, the park is “the only protected area in the world to incorporate a continuous, intact transect from snowcap to tropical marine environment, including extensive lowland wetlands”. For the Amungme and Kamoro indigenes, corporate imperialism had replaced European colonialism.The ramifications are both environmental and social.‘Slow-motion genocide’The social and economic condition of the indigenous Amungme and Kamoro poses fundamental human rights concerns. Although Freeport-Indonesia directly or indirectly employs a large number of West Papuans and is regularly Indonesia’s biggest taxpayer, in 2005, the World Bank found that Papua remained the poorest province in Indonesia. With a marked rise in military personnel and foreign staff has come a number of social issues, including alcohol abuse and prostitution such that Papua now has the highest rate of HIV/AIDS in Indonesia.Indonesian control of West Papua has been characterised by the ongoing and disproportionate repression of largely peaceful opposition. Few sustained violent interactions have occurred; however, in one major conflict in 1977, more than 1,000 civilian men, women, and children were killed by the Indonesian military in Operasi Tumpas (“Operation Annihilation”) after a slurry pipe was severed and partially closed the Ertsberg mine.More recently, in 1995, the Australian Council for Overseas Aid reported that the Indonesian army and security forces killed 37 people involved in protests over the mine in the preceding seven-month period. While the level of violence is difficult to establish, academics at the Centre for Peace and Conflict Studies at the University of Sydney maintain that up to 100,000 West Papuans may have been killed since Indonesian occupation. They call what’s happening to West Papua “slow-motion genocide”.There are also two primary environmental concerns over Grasberg. The first is that the mine discharges 230,000 tons of waste rock a day into surrounding waterways; given the escalating rate of processing, this rate is arguably above that allowed by national law. Secondly, acid rock drainage – the outflow of acidic water – has resulted from the disposal of a further 360,000 to 510,000 tons a day of overburden and waste rock in two adjacent valleys covering 4 miles (6.5 km), up to 975 feet (300 metres) deep. The mine operators dispute both claims.Riverine methods of waste disposal are banned in every developed country on Earth. The World Bank no longer funds projects that operate this way, due to the irreversible ecological devastation, and the International Finance Corporation requires that rock be treated prior to disposal, which is not a practice carried out at Grasberg. Since the mid-1990s, a number of independent environmental assessments have found unacceptably high levels of toxicity and sediment as far as 140 miles away.Freeport and Rio Tinto maintain that riverine tailings disposal is the best solution, given the difficult terrain, the threat of earthquakes, and heavy rainfall.Grasberg’s reserves are so vast that extracting them is expected to create 6 billion tons of industrial waste.President Suharto, who is now recognised as one of the most corrupt and tyrannical leaders in history, renewed Freeport-Indonesia’s exclusive mining rights in 1991 for a further 30 years with an option of two 10-year extensions. The license included an option to prospect another 6.5 million acres (2.6 million hectares), as far as the Papua New Guinea border. “The potential is only limited by the imagination,” Freeport’s chairman, James Moffett, remarked to shareholders in March 1995. “Every other mining company wants to get into Irian Jaya [West Papua]. Bougainville and Ok Tedi don’t hold a candle to Grasberg.”Part 3 to follow next week.This is an extract of a chapter from the book, Evolutions in Sustainable Investing: Strategies, Funds and Thought Leadership, to be published by Wiley in December 2011. NAJ Taylor is a PhD candidate in the School of Political Science and International Studies at the University of Queensland, and casual lecturer in the Faculty of Law and Management at La Trobe University.Follow NAJ Taylor on Twitter: @najtaylordotcomThe views expressed in this article are the author’s own and do not necessarily reflect Al Jazeera’s editorial policy.Related articles

BHP Billiton acknowledged that its mine at Ok Tedi was ‘not compatible with our environmental values’ [GALLO/GETTY]
“Grasberg’s reserves are so vast that extracting them is expected to create 6 billion tons of industrial waste.”
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The blacklisting of Rio Tinto – Opinion – Al Jazeera English

Grasberg mine
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The blacklisting of Rio Tinto – Opinion – Al Jazeera English.

Too many invest in companies – such as Australia’s Rio Tinto – without any consideration of the ethics of doing so.
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Papuans protest against Freeport and Rio Tinto’s Grasberg mine outside of Freeport’s office in Jakarta [EPA]

[This is the first of four pieces examining Rio Tinto and mining in Indonesia’s West Papua province]

Investing in conflict-affected and high-risk areas is a growing concern for responsible businesses and investors. Often times companies based in developed countries operate in lesser-developed, foreign markets, where governance standards are lax, corruption is high and business practices are poor.

These pieces focus on one specific Anglo-Australian company that operates in West Papua, one of the poorest provinces of Indonesia. The risks for the company include the potential to contribute to environmental and social damage in a foreign market. The risks for investors include financing a company that does not get its risk management right. This is the story of how the Norwegian Pension Fund blacklisted Rio Tinto.

An ancient copper mine located near Huelva in southernmost Spain changed hands in 1873. A group of opportunistic Anglo-German investors, equipped with modern techniques that favored mining aboveground, acquired it from the Spanish government. The mine’s copper had stained the surrounding water to such an extent that the indigenes named the river Rio Tinto – literally meaning “red river”.

The mine at Rio Tinto had supplied the Phoenicians, ancient Greeks, Carthaginians, and the Roman Empire. Its copper had paid for Carthage’s numerous wars on Rome and had been held by both Scipio and Hannibal. We can only assume that these investors, aware of such indelible marks on the environment and history, missed the irony, because they named their company Rio Tinto.

However, the red river has since flowed a long way from home. The company has expanded its operations through Australia, North and South America, Asia, Europe, and southern Africa – across coal, aluminum, copper, diamonds, uranium, gold, industrial minerals, and iron ore. Rio Tinto is now so large that its dual listing on the Australian and London stock exchanges commands a value of over $100bn.

What’s left behind near the Spanish town of Huelva is a 58-mile-long river flowing through one of the world’s largest deposits of pyrite, or fool’s gold. Because of the mine, the river has a pH reading similar to that of automobile battery acid and contains virtually no oxygen in its lower depths. In the late 1980s, temporary flooding dissolved a power substation, a mandibular crusher, and several hundred yards of transport belts.

More recently, NASA astrobiologists used the conditions of the river to replicate the conditions of Mars. “If you remove the green,” one of them remarked, “it looks like Mars”. The thinking goes that if something could live in such an acidic river, then there is likely to be life on Mars too.

Every Australian – through public monies invested by elected governments, or their choice of superannuation fund, insurer, and bank – is funding this red river now too. Rio Tinto is so large and so profitable that, for the average Australian, investment in it is very near unavoidable.

Blacklisted

On September 9, 2008, amid the turmoil of the global financial crisis, the Norwegian government announced that it had liquidated its entire $1bn investment in Rio Tinto for “grossly unethical conduct”. Operating the second largest fund in the world, the Norwegians’ decision focused solely on the Grasberg mine in West Papua on New Guinea, which it believed posed the “unacceptable risk” of contributing to “severe environmental damage” if it were to continue funding the Anglo-Australian mining giant.

Rio Tinto had been blacklisted.

The following day, Rio Tinto’s official statement relayed that the company was “surprised and disappointed”, given both its recognised leadership in environmental sustainability and its noncontrolling interest in the Grasberg mine. As with most claims of sustainability, the truth is otherwise.

Rio Tinto should not have been surprised by the Norwegian stance on Grasberg. Records show that there had been months – in fact, years – of dialogue with the Norwegians about Grasberg’s inadequate environmental and social performance. Rio Tinto had faced a litany of signposts indicating that multinational and Indonesian involvement in West Papua was not meeting various standards, laws, and norms: Institutions such as the World Bank, the Australian Council for Overseas Aid, the International Finance Corporation, the Overseas Private Investment Commission, the United Nations Committee against Torture, the US State Department, and the Indonesian Environment Ministry, as well as many US and European politicians, independent environmental assessments, international media, Papuan leaders, civil society groups, and shareholders had brought the problems to Rio Tinto’s attention.

That an institutional investor should act on environmental, social, and corporate governance considerations is a newly evolving development within the global investment industry, and one in which many Australian institutional investors and service providers have been quick to claim leadership. However, the blacklisting of Rio Tinto by the Norwegian government was uniquely public, transparent, and forward-thinking. Yet this wholesale dumping of one of Australia’s blue-chip stocks received only syndicated coverage in the local media.

Behind the headlines of the global financial crisis is a deeper, more systemic fault line that rewards rampant capitalism. Too many invest in and operate mines such as Grasberg without any consideration of the ethics of so doing.

Part 2 to follow next week.

This is an extract of a chapter from the book, Evolutions in Sustainable Investing: Strategies, Funds and Thought Leadership, to be published by Wiley in December 2011.

Follow NAJ Taylor on Twitter: @najtaylordotcom
1

Strike pressures PT Freeport Indonesia into serious negotiations

Alex Rayfield and Claudia King, 11 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


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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.

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