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The week in review: Political divide in the making?
JP/DONThe nation has been spectator to an extremely shrewd political game in the past week; the political showdown was preceded by a revelation of devious business deals in relation to a proposed extension to the contract of US mining giant Freeport McMoRanâs contract in Timika, Papua, and concluded with the eventual disclosure of crafty rivalry among the nationâs political elite
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JP/DON
The nation has been spectator to an extremely shrewd political game in the past week; the political showdown was preceded by a revelation of devious business deals in relation to a proposed extension to the contract of US mining giant Freeport McMoRan's contract in Timika, Papua, and concluded with the eventual disclosure of crafty rivalry among the nation's political elite.
The controversy began on Monday when Energy and Mineral Resources Minister Sudirman Said reported
House of Representatives Speaker Setya Novanto to the House ethics council for allegedly using the names of
President Joko 'Jokowi' Widodo and Vice President Jusuf Kalla to demand shares and projects from the local unit of the US mining firm. Sudirman claimed he had secured the President's approval to file the report.
PT Freeport Indonesia is currently negotiating with the Indonesian government the extension of its contract to exploit a gold deposit, one of the world's largest, in Papua.
The company is eager for the government to speed up its decision on extending its contract of work (CoW), which expires in 2021.
According to Government Regulation No. 77/2014 on coal and mineral mining operations, however, no mining company, including Freeport, may apply for a renewal until two years before the contract expires at the soonest.
Sudirman, in apparent reference to a taped conversation that has been widely circulated on both mainstream and social media, said that Setya, along with oil and fuel kingpin Muhammad Reza Chalid, had met several times with Freeport executives to offer the contract extension in return for 20 percent of the shares in Freeport given to Jokowi and Kalla. The minister accused the Golkar Party politician of also demanding shares in a power plant to be built in Timika, asking Freeport to become an investor in the project as well as the buyer of the to-be-produced electricity.
The minister's report, while mainly targeted at Setya, has implications far beyond the House speaker, revealing the weight of pressure put on President Jokowi by vested interests in relation to Freeport's future in Papua.
Freeport has aggressively employed campaigns and high-level lobbying to win support and obtain Jokowi's endorsement to grant another 20-year contract. It has repeatedly emphasized its contribution of huge tax payments to the state coffers, its hiring of tens of thousands of local workers and its help in improving the well-being of Papuans thanks to its tax and royalties and generous corporate social responsibility programs.
The company has even issued a reminder that without US support for the UN-organized Act of Free Choice in Papua in 1969, the result of the referendum could have been damaging for Indonesia. Freeport's presence in Papua at that time was reportedly the main reason for the US decision to make it possible to reunite Papua with Indonesia.
By doing so, the company has indirectly warned the Indonesian government of the extremely severe consequences it would face if it failed to provide legal certainty of Freeport's operation beyond 2021.
To the surprise of many, the President remained calm in his response to the controversy.
'[Freeport] may apply for a renewal two years before the contract expires at the soonest and five months at the latest,' the President said on Friday, referring to the 2014 government regulation.
Asked about the naming of him and Kalla as potential recipients of Freeport shares, the President simply said he would wait for the House ethics council to complete its investigation.
A strong rebuttal of Sudirman's claims, however, came from Coordinating Political, Legal and Security Affairs Minister Luhut Panjaitan, who said Jokowi had never instructed nor approved a decision by Sudirman to file a report to the ethics council.
According to Luhut, the President believes the allegations are part of a plot against him, and is aware of the identities of figures behind Sudirman who initiated the report.
Luhut, who was also named by Setya and Reza in the leaked report as having a role to play to ensure the success of the Freeport deal, dismissed speculation that he too stood to gain Freeport shares.
He had, he claimed, decided not to get involved in any new business deals since he was appointed as chief of presidential staff and then minister.
Luhut admitted, however, that his company was one of three offered Freeport shares in 2011; one of the others was a company owned by businessman Edward Soerjadjaja, he said, while the third was a company identified as Indika.
Luhut revealed that Freeport executive Jim Moffet had repeated the offer to him after he was appointed as chief of presidential staff, but that he had refused.
The case has indeed moved far beyond an economic issue, apparently developing into a critical tug-of-war that goes deep into the political elite. Unless it is properly settled, the whole nation will suffer.
' Imanuddin Razak
