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Freeport is greedy, says Rizal Ramli
Judgment: Coordinating Maritime Affairs Minister Rizal Ramli criticizes foreign companies for taking control of Indonesia's mineral resources
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span class="inline inline-center">Judgment: Coordinating Maritime Affairs Minister Rizal Ramli criticizes foreign companies for taking control of Indonesia's mineral resources. (tempo.co)
Coordinating Maritime Affairs Minister Rizal Ramli dished out a sharp critique once more, and this time it was directed against foreign companies controlling Indonesia's mineral wealth. For example, the gold mine controlled by giant gold and copper miner Freeport in Papua. He also lambasted the mentality of the country's state officials in the mineral sector.
Rizal said Indonesia was blessed with abundant mineral resources such as copper, gold, coal, nickel and tin. Unfortunately, all of those resources, except coal, are controlled by foreign powers through a work contract.
The minister said a mining site currently controlled by PT Freeport Indonesia, a subsidiary of US-based mining giant Freeport ' McMoRan Inc., in Papua was one of the three biggest copper and gold mines in the world.
'However, people in Papua are very poor because Freeport pays only 1 percent in royalties for the gold it exploits. Across the world, gold royalties are around 6-7 percent,' Rizal said as quoted by tempo.co in his remarks during a general lecture to celebrate the 57th anniversary of the Jayabaya University in Jakarta on Thursday.
The minister said gold and copper reserves in the mine currently controlled by Freeport could be exploited for the next 30-40 years. Meanwhile, the company's contract would expire within the next 5 to 10 years.
'There is now a chance for our country to be able to repeat our previous history, during which our mineral resources gave much benefit to all Indonesian people and the nation,' said Rizal.
Based on existing laws, he said, a contract could be renegotiated only 2 or 3 years before it expired. However, there were state officials who wanted Freeport's contract to be renegotiated 10 years before it expired.
'They don't understand negotiation techniques. We have to understand that the closer we get to the expiry of a contract, the bigger our bargaining position is. So, we can push forward much better contract terms for this nation,' said Rizal.
The minister also criticized Freeport's poor environmental management, saying it threw mining waste, which contained mercury, into rivers in the surrounding areas, damaging the ecosystem.
Rizal said if Freeport implemented good corporate governance, it would not be that difficult for the company to handle mining waste, preventing it from polluting the environment.
'But because it [Freeport] is greedy, it doesn't want to pay compensation to victims of environmental damage. Our weak law enforcement has aggravated the situation. Ironically, in its home country, any company found guilty of damaging the environment, such as the incident that happened in the Gulf of Mexico, must pay billions of dollars in fines,' said Rizal. (ags/ebf)
