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PNG RAINFOREST CAMPAIGN NEWS

Freeport: Corporate Predator

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Forest Networking a Project of Ecological Enterprises

July 19, 1995

OVERVIEW & SOURCE

Following is an excellent article regarding Freeport -McMoRan, the

U.S. multinational corporation that operates the world's largest

gold mine and third-largest copper mine, in Irian Jaya, which is

occupied by Indonesia (or an Indonesian province, depending on who

you ask). It details the incredible social and environmental

costs, in both Irian Jaya and the United States, of Freeport just

doing business as usual. This article came from the _Nation_

magazine, and was posted in econet's reg.newguinea conference.

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RELAYED TEXT STARTS HERE:

/* Written 1:06 AM Jul 19, 1995 by cscheiner in

igc:reg.newguinea */

/* ---------- "Freeport: Corporate Predator" ---------- */

From: Charles Scheiner <cscheiner>

By Eyal Press

The Nation. July 31 / August 7, 1995, Page 125. Full text

Three days after Christmas last year a chief of the Amungme people

offered his knife to a representative of Freeport-McMoRan, the

U.S. multinational corporation that operates the world's largest

gold mine and third-largest copper mine in the chief's country

(and Indonesia's colony), Irian Jaya. "Take it and kill me:' the

chief told the executive as he held out the weapon, "because I

can't stand anymore to see these problems.... Slice the left side

of the body and bury each piece from here up to Grasberg [the

mountain that Freeport mines].... On your way back round up all

the Amungme people, our pigs and every piece we have. And make a

huge hole to bury us with all our belongings. You cover that and

then do anything you want."

The Freeport man declined the invitation, perhaps confident that

there, as throughout the world, his company could achieve the same

result without such personal exertions.

Irian Jaya, the western half of the island of New Guinea, is the

site of Freeport's cruelest and, with mineral reserves worth an

estimated $50 billion, potentially most lucrative exploits. But

as dramatic as the country's story is, in the barest elements it

is not unique.

Freeport is the picture of modern corporatism, heedless of country

or flag, ruthless in pursuit of profit. Across the globe its

trail is marked by despoiled lands, poisoned water, ruined lives-

its progress assured by a powerful nexus of forces. In Irian

Jaya, it is the Indonesian military that guarantees Freeport's

ability to do what it wants. In America, where all the

regulations on the books don't threaten its standing as the

nation's number-one polluter, it is a clutch of compliant

politicians, zealous P.R. agents and hired academics. In

Congress, where Freeport joins the assault on the Endangered

Species Act and wetlands protections, it is a multipronged

lobbying effort and a PAC that in the past decade has disbursed

money to three-fourths of the Senate and a quarter of the House.

Freeport's record with ordinary citizens is another matter. In its

home state of Louisiana, for example, where the company releases

millions of pounds of toxic waste into local waters every year,

public opposition has hindered it from using the Mississippi River

as a private sewage stream. In Austin, Texas, the company's plans

for a sprawling real estate development that would foul Barton

Springs, the city's most popular outdoor swimming place, have so

far been stymied by an enraged citizenry. The outcome of that

battle (of which more later) is far from settled. But irate over

such modest exercises in democracy, Freeport's C.E.O., James

Robert (Jim Bob) Moffett, exclaimed: "I can assure you we receive

better treatment in some foreign countries than we do here."

When it comes to creating a congenial business environment, it's

hard to rival Indonesia, which has a 10 percent stake in

Freeport's regional mining operations. Jim Bob calls Suharto "a

compassionate man," and indeed the dictator's tenderness for

Freeport is such that he has seen to it that anyone who gets in

the company's way is simply removed. About a month after the

confrontation between the Amungme chief and the Freeport exec,

2,000 Amungme living near the mining site were ordered to leave

their homes by the Indonesian government. It was a familiar

action, one in a series of forced removals that began in 1967,

when Freeport was granted the right to exploit Irian Jaya's

mineral resources. This was two years before Indonesia

formally declared the country its twenty-sixth province, following

an "Act of Free Choice" in which 1,205 representatives pre-

selected by the Indonesian government made a decision for 800,000

people.

Jakarta honors no rights of the indigenous Amungme and Komoro

people, who have inhabited the rain forests of Irian Jaya, living

off the land, for thousands of years. The 1967 Contract of Work

that the regime drew up with Freeport gave the company a three-

year tax holiday and a 250,000-acre concession. Villagers,

meanwhile, were paid 10 cents an hour to build roads for Freeport

and then, once mining began, were transferred to resettlement

camps along the coastal lowland, where many died of malaria.

Today, having recently won a thirty-year renewal on its mining

contract with Jakarta ("thrusting a spear of economic development

into the heartland of Irian Jaya," as Moffett puts it), Freeport

insists that its exploitation of the country has been a blessing

for the tribal people. At a recruitment session held at the

Indonesian consulate in New York recently, company representatives

showed a video depicting schools and health clinics that Freeport

has built in the region, along with a profile of New Town, the

bright, modem city under construction for employees. Mining

causes "absolutely no damage to the forests" and "no acid drainage

problems" to rivers below, explained the voiceover; Jim Bob

Moffett himself declared that the local people "are moving into

the twenty-first century."

If the cataclysms of this century are any guide to the future,

Moffett's vision is worrying. (This is a man, incidentally, who

has Henry Kissinger on his board of directors and who counts

Indonesian Foreign Minister Ali Alatas - best known for calling

the genocide in occupied East Timor a matter of "cultural

differences" - as a golfing partner and personal friend.) Nor can

the decision this past March by the British RTZ Corporation to

invest up to $1.7 billion in Freeport - $850 million of it in

Irian Jaya projects-be cause for much optimism among the Amungme

and Komoro. RTZ operates the notoriously destructive Panguna

copper/gold mine in Papua New Guinea, and in 1992 was named the

biggest corporate threat to indigenous people by Survival

International.

From the perspective of one Amungme tribesman, Freeport is simply

following the standard Third World development model - "developing

a glamorous satellite city with complete facilities and a five-

star Sheraton Hotel that will only widen the gap between the local

people, who have nothing, and the Freeport staff, who have access

to resources and facilities!' Only 15 percent of the roughly

14,000 people Freeport employs in the area are locals, and most of

them occupy the lowest-level jobs. They and their kinfolk are kept

in check by the Indonesian military, which Amnesty International

describes in its latest report on Irian Jaya as engaging in "a

continuing pattern" of "political imprisonment, torture,

ill-treatment and extrajudicial execution." One man, for example,

was beheaded for participating in a flag-raising ceremony.

Emmy Hafild of WALHI, a Jakarta -based organization that monitors

Freeport activity in Irian Jaya, says seventy military personnel

patrol the mining site. An Indonesian general told her Freeport

helps pay their salaries.

The company denies any link to the Indonesian military and any

responsibility for the repression of locals, but that's not what

on-site visitors have heard from the company's own employees. One

recent Western traveler was told by a Freeport security employee

that he and his co- workers amuse themselves by shooting randomly

at passing tribesmen and watching them scurry in terror into the

woods. That same traveler, who asked not to be identified,

wandered into the mining site while hiking and was locked up for

several hours in a cell jointly guarded by Freeport security and

Indonesian soldiers.

Raisa Lerner, a graduate of Harvard Law School who spent two

recent summers in Irian Jaya, says that the main road to the

mining site can be entered only with permission, via military

checkpoints (she says similar security controls the entrance to

New Town). When Lerner and several Amungme tried to visit a mine

within the indigenous homeland, they were turned away. The next

day Lerner breezed through the same checkpoint with a Freeport

subcontractor, who also confided that Indonesian officials advised

him not to hire Irianese locals.

In previous years, local people confronted the Indonesian Army

within the mining area in frequent and bloody clashes. The peak

came in 1977, when members of an indigenous resistance movement,

the Organisasi Papua Merdeka (O.P.M.), used stolen Freeport

explosives to blow up a copper slurry pipe, causing a temporary

shutdown. There followed the Indonesian Army's Operasi Tumpas

(Operation Annihilation), a blitzkrieg that killed anywhere from

900 to several thousand people.

Most Amungme have since distanced themselves from the O.P.M., but

the brutality has not stopped. In 1988, according to Rainforest

Action Network, Freeport relocated 1,000 residents to the coastal

lowlands and called in the army, which burned down their old huts.

This past April 5, the Australian Council for Overseas Aid

released "Trouble at Freeport," a report detailing the killing or

disappearance of twenty-two civilians and fifteen alleged O.P.M.

guerrillas at the hands of the Indonesian Army since June 1994.

On Christmas Day, the report says, Freeport and Indonesian

security forces interrupted a peaceful flag-raising ceremony,

where Amungme had gathered to honor their ancestors, and opened

fire. Three civilians were killed, five disappeared and thirteen

others were arrested and tortured. (Freeport denies its people

were involved.)

It was after these killings, which were independently reported by

the BBC, that the Amungme chief offered his knife to the man from

Freeport, reasoning that in one form or another violence would put

an end to his people. Freeport currently dumps 115,000 tons of

untreated tailings (refuse from the mining process) straight into

the Aghawagon, Otomona and Ajkwa rivers which pass below. A

report by the company's own geochemistry consultants states,

"Copper (`highly toxic to many fish and aquatic organisms'] does

occur throughout the river system at detectable concentrations."

Freeport P.R. men claim that the Ajkwa could pass U.S. standards

for drinking water, but when one visitor recently asked a Freeport

security guard if he drinks from it, the officer laughed: "If you

drink that water, you'll die."

Freeport, with 1994 revenues of $1.9 billion, says it cannot

afford to neutralize the tailings before disposal. Instead, it

plans to build levees along the banks of the Ajkwa to "contain"

the tailings, a process that, Hafild points out, will submerge

332,500 acres of rain forest in refuse and do nothing to solve the

problem at its source.

The company consultants' report also noted the ruin of nearby

lakes. Of one, the scientists wrote, "all that remained was some

brown, iron-like staining on the clay/rock which presumably was

[once] the floor of the lake." As for the beautiful valleys so

admired by mountain climbers, WALHI reports, "When the mines shut

down ... [these] will be covered by 4 billion tons of waste rock."

Meanwhile, the rain forest is dying. Rivers swollen with toxic

waste have flooded thousands of acres, turning once-verdant areas

gray and killing palm trees that are the source of sago, a powdery

starch traditionally a staple of native peoples' diets.

Freeport is required to submit an Environmental Management Plan to

the Indonesian government, but, as the country's single biggest

taxpayer, it can be forgiven a lot. After news leaked last

December that a majority on a state special review committee had

rejected as insufficient Freeport's E.M.P., the head of

Indonesia's Department of Mining and Energy promptly organized a

press conference, attended by numerous Freeport representatives,

to deny all. By February the Indonesian government had approved

the plan.

Freeport is an old hand at circumventing environmental

regulations, and it is in this area that the company's

international and domestic tactics most closely coincide.

According to the latest figures from the U.S. Environmental

Protection Agency, Freeport released 193.6 million pounds of toxic

material into the air, water and soil in 1993, nearly three times

as much as America's next largest polluter. Since the early 1970s,

Freeport, also a producer of phosphate fertilizer, has stacked

radioactive phosphogypsum in its home base of New Orleans.

Phosphoric acid and heavy metals leak from there into ground

water. In 1984, Freeport and three other companies (two of

which it later acquired) petitioned for an exemption to the Clean

Water Act to dump 25 billion pounds of the toxic waste every year

into the Mississippi River, the primary source of drinking water

for 1.5 million people.

The Louisiana Department of Environmental Quality, prompted by

citizen protest, denied the petition. Now Freeport boasts that it

has taken measures to reduce runoff from the gypsum stacks by 87

percent. So radioactive material continues to seep into the

ground water. Meanwhile, Freeport is a member of the Clean Water

Industry Coalition, which is lobbying to revise the Clean Water

Act to relieve corporations from the strictures of many current

pollution controls. It also belongs to the Fertilizer Institute,

which is petitioning the E.P.A. to remove phosphoric acid from its

list of toxic substances. If that effort succeeds, the company's

toxic runoff will no longer be considered pollution.

Freeport has long been advancing every core anti-environmental

measure currently on the table in Congress. Topping the list is

the Shuster bill, which would eliminate E.P.A. oversight of

wetlands and open many protected areas to development. Much of

the original language of that bill was written by a corporate

lobby group evasively called the National Wetlands Coalition.

Freeport is a member of that group and since 1983 has donated

$46,000 to Louisiana members of the House, including Democrat

Jimmy Hayes ($6,750), the bill's co-sponsor. The coalition is

also lobbying to weaken the Endangered Species Act; meanwhile,

Freeport burnishes its image by funding an endangered species

center in Louisiana.

Since 1983, Freeport's political action committee has paid members

of Congress more than $730,000 for their favors. Louisiana's J.

Bennett Johnston, the Senate's staunchest advocate of the Suharto

regime and of US. oil and mining interests, got $8,000. (Companies

like Freeport, Johnston recently informed the pliant US. Trade

Representative Mickey Kantor, "have been leaders in pay, treatment

of workers ... and general `empowerment' of Indonesians.")

Johnston is due to retire in 1997 but has vowed in the meantime to

pass "royalty relief" legislation - i.e., tax breaks - for deep-

water drilling in the Gulf of Mexico. Freeport lobbyist W.

Russell King, responsible for an additional $300,000 in lobbying

for the company, lists royalty relief among his officially filed

"legislative interests." King has also been urging "amendments to

the existing corporate alternative minimum tax ... including 100%

use of the foreign tax credit" - which would enable multinationals

like Freeport to make deductions to the point of paying no taxes.

It stands to reason that such a corporate predator would work hard

to conceal its dirty deeds. When National Geographic snapped a

picture of the New Orleans gypsum stacks for a 1992 special on

water, Freeport officials pleaded with the magazine,

unsuccessfully, to pull the shot. (A year later, when the magazine

wanted to do a story on Irian Jaya, Jakarta denied NG's reporter

permission to enter the country.) In New Orleans, Freeport's

image-making is handled by some of the city's leading former

reporters: Garland Robinette, a co-anchor at the local CBS

affiliate; Gerard Braud, an environmental reporter from the local

NBC affiliate; and two of CBS's top environmental cameramen. The

company sponsors "Focus Earth" infomercials for local TV and sends

representatives to local schools to preach about recycling and

corporate commitment to the environment.

And in higher education? Freeport bankrolls environmental

programs at five Louisiana universities. Tulane's Freeport-

McMoRan Professor of Environmental Policy, James Regens, heads a

working group of academics, all feeding at the Freeport trough,

whose purpose, says Moffett, is to "elevate Louisiana as a leading

center for environmental studies." For its own Freeport-endowed

"environmental communications" chair, Loyola University is looking

for someone who will "service to the needs of private industry."

At the University of Texas in Austin, whose geology department has

since 1989 had a $1.4 million contract to conduct Freeport's

mineral prospecting in Irian Jaya, that aim is rich reality. The

school's chancellor, William Cunningham, is on Freeport's board of

directors and recently named a $25 million molecular biology

building after his pal and U.T. alumnus Jim Bob Moffett and

Moffett's wife, Louise. (Jim Bob pitched in a mere $2 million for

the building, four times less than what U.T. students will pay

through student fees.) The honor came at a good time for Moffett,

who since 1990 has been battling the people of Austin over

Freeport's prospective 4,000- acre real estate development which

would spew sewage into Barton Springs.

When activists got a citywide referendum on the 1992 ballot to

stop the development, Moffett threatened to "bankrupt the city"

with lawsuits if the people obstructed his will. Freeport spent

tens of thousands of dollars on an ad campaign touting its good

intentions. It flew Bill Collier, a writer for the Austin-American

Statesman, to Irian Jaya, after which he wrote a series of fawning

articles. One of them called the conflict between Freeport and

the Irianese a problem of "mutual misunderstanding." Today,

Collier works for Freeport.

The referendum passed by two to one. FM Properties, a Freeport

subsidiary, promptly filed suit arguing that its project should

proceed. As insurance, Freeport hired ten lobbyists (five paid

$25,000-$49,999 each) to pressure the Texas legislature to gut

Austin's water quality ordinances. Money talks: Both the

legislature and the court capitulated.

Still, until Austin provides the company with a sewage system, the

project can't go ahead. And the city has so far resisted

Freeport's appeals to tax citizens to pay for a sewage line out to

its property. Back in February the company offered to drop its

lawsuit in exchange for this public subsidy. After 580 people

spoke out against the deal at a City Council meeting, the

"settlement" was voted down.

"Freeport has been actively involved in the outright bullying of

the people of Austin," says Brigid Shea, a member of the City

Council who learned that the company tried to get Austin's

attorney to sign the deal before the Council could vote on it.

Moffett, for his part, recently breezed through the city warning

that "no Fortune 500 company is coming to Austin after what we've

been through." He also flashed a slide of an Irianese worker for

Freeport: "I guarantee you this sombitch is glad we found a copper

and gold mine. . . . [Before Freeport arrived] the young man was

raising vegetables or doing whatever on the mountain with his

parents."

Now, if he's like most of the locals employed by Freeport, he's

living in a fetid shack off the pay of his menial labor. All that

wealth; all that misery. It's not that Freeport-McMoRan is

insensitive, or even diabolical. It's just plain business.

-----------------------------------------

Eyal Press is a New York-based journalist.

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