Freeport needs to stand up to Indonesia over the CoW issue

Will Hickey
Associate professor for the School of Government and Public Policy in Jakarta

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Jakarta / Mon, February 27, 2017 / 05:28 pm

Freeport needs to stand up to Indonesia over the CoW issue

A copy of draft revision to Government Regulation No. 23/2010 on the management of mineral and coal businesses obtained by The Jakarta Post late on Thursday. (The Jakarta Post/Rendi A. Witular)

Normally, a 50-year mining project like Freeport’s Grassberg mine would deign it high time to turn its operations over to the local government, which would also be expedient politically. However, in this case, Freeport is correct to stand its ground against Indonesia in insisting its contract of work (CoW) be honored, extended and not converted into a licensing agreement that has the potential to seriously disrupt operations. Vincent Lingga in his Feb. 23 commentary in The Jakarta Post is wrong to paint this as an “arbitration ploy” by Freeport to block mining reform. Indonesia mining will certainly not reform with local owners bereft of legal enforcement. Why is this? Freeport is actually doing quite a good job with its localization initiatives in Papua, compared to that alternative, no localization. In other words, the operation is benefitting Indonesia not just...