State Losing Rp 30 Trillion Because of Freeport

Jubi, 16 July 2011

Two articles from members of the Indonesian Parliament regarding Freeport

State Losing Rp 30 Trillion Because of Freeport

Member of Commission IV of the Indonesian Parliament, Markus Nari, has reported that Indonesia has suffered the loss of Rp 30 trillion as a result of Freeport Indonesia’s failure to work on the basis of a licensing permit to operate within forestry areas known as Regulation in lieu of Law (Perpu) Ijin Pinjam Pakai Kawasan Hutan, despite two official requests from the Indonesian forestry minister.

Commission member Markus Nari, made this statement during a visit to Timika, to see the tailings waste spilling into the Ajkwa River. He pointed out that all mining companies which operates within forestry regions must be in possession of an IPPKH. 'The company has been pressed twice by the forestry minister to obtain this license but has until now failed to do so. Instead of being requested for a third time, the company should be sent a very strong warning,' he said.

According to information received by JUBI, Freeport Indonesia is using of 202,000 ha of land, much of which is adjacent to the Lorenz National Park. There are altogether thirteen companies operating within these protected forestry areas, including Freeport.

Nari said that he had received reports from local communities during his visit to the area that the forests had been damaged, while silt had affected the depth of the river and the nearby sea.

He said that the team from parliament and the forestry ministry had paid close attention to Freeport's utilisation of forestry areas, and had seen the impact of the tailings in silting the estuary and the sea.

Freeport's IPPKH Does Not Benefit Papuan People

The deputy chairman of Commission IV of the Indonesian parliament, Firman Soebagyo, said that Freeport's IPPKH has done nothing to improve conditions for the local communities and the company has failed to involve local human resources and the economic community in general in the areas, with the people continuing to be very poor.

The environmental impact has led to the loss of vegetation and biodiversity in the protected forestry areas that have been exploited. 'The quality of the water has deteriorated and the environment and mangrove forests have been damaged downstream of the river.'

He said that as a member of Commission IV, he was very concrned about Freeeport's IIPKH license which has caused problems for local development and the welfare of the local communities. He quoted forestry ministry data that indicated that Freeport was one of thirteen companies exploiting forestry areas which includes 10,000 ha in Mimika and another 202,980 ha in Mimika, Paniai and Jayawjaya.

JUBI reported that members of the commission had gained acress to data that Freeport does not have license to operate in protected forests from the forestry ministry as required under Law 41/1999. The company has been operarting in Papua since 1967 which means that the world's biggest mining company has not been paying the required taxes known as Non-Tax Levies to the State (PNBP) as a result of which the country has suffered the loss of tens of billions of rupiahs. The company has ignored two requests regarding this license.

Firman also said while Freeport contributes Rp.400 billion annually to the local people, the facts on the ground show that the local people are still suffering, while children are unable to get a decent education. He said that with the seas having been turned into dry land because of the impact of the tailings, Freeport should be held accountable for damaging the biodiversity and destroying people's livelihoods. He would therefore recommend that the government should stop issuing any more licenses to the company.

ENDS

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