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The Jakarta Post
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Rights body questions Freeport CSR

  • Irawaty Wardany and Novan Iman Santosa

    The Jakarta Post

Jakarta | Thu, January 21 2010 | 09:20 am

The National Commission on Human Rights has questioned officials from gold and copper mining firm PT Freeport Indonesia over the company’s local CSR funding.

Commission chairman Ifdhal Kasim told The Jakarta Post on Wednesday that representatives of three villages near Freeport’s operation area had filed reports with the commission to call for transparency in the distribution of the fund.

“Since 1995, the company has had an agreement with the local people to donate 1 percent of its gross profit to foundations to be distributed for development projects,” Ifdhal said.

“The villagers want the company to be clear on where the money goes and who receives it.”

He added any move that could be misconstrued as being nontransparent could create conflict among villagers, hence Wednesday’s questioning of the Freeport officials.

“Fortunately they were really cooperative in explaining how the fund worked,” Ifdhal said.

He declined to say how much money Freeport distributed every year or who received it.

“We haven’t reached any conclusion on the case,” he said.

Deputy chairman Ridha Saleh said the commission might need to question representatives of the foundations.

“We hope to resolve this problem within a month,” Ifdhal said.

“We also asked the Freeport officials about their corporate social responsibility programs and the fees they pay the government.”

Freeport Indonesia is the local subsidiary of US-based Freeport McMoRan Copper & Gold, the world’s largest publicly traded copper company.

Freeport Indonesia spokesman Mindo Pangaribuan confirmed Wednesday’s meeting.

“We were explaining Freeport’s community development programs through our corporate social responsibility, including the provision of a voluntary fund for social development through an independent institution,” he told the Post over the phone.

“The partnership fund is managed by, among others, the government, local customary groups, Freeport and local figures.”

Mindo added the program and the fund were audited annually by an independent auditor.

“The report is published in the mass media as well as in  meetings with local figures,” he said.

He added the partnership fund went to the Amungme Kamoro Societies Development Institution (LPMAK).

“We have channeled US$330 million by 2009, since the program started in 1996,” Mindo said.

Besides the partnership fund, he went on, Freeport also provided a trusteeship fund of $1 million to the Amungme and Kamoro tribes as part of its land rights recognition.

“The trusteeship fund is managed separately by each tribe, independent from the fund for the LPMAK,” Mindo said.


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