EDITORIAL — Mine influx jumps to 60,000 people — Freeport’s social audit

When Freeport McMoRan Copper & Gold began work in Irian Jaya three decades ago, about 400 local people lived in the vicinity of the giant Grasberg deposit. Today, over 60,000 people have moved into the area because of the opportunities offered by the mine and related businesses; an influx that has posed new challenges for the company beyond the technical and logistical aspects of the project.

The Indonesian government’s efforts to exert influence in the region over the years have muddied the waters, too; many Irian Jayans openly resent policy-making from Jakarta that pays little heed to their needs and aspirations. This posed another challenge for Freeport, as Grasberg is its main operation and economic cornerstone.

Social unrest near the mine has resulted in several well-publicized uprisings, which were quelled by the Indonesian government in a repressive manner that drew outrage from human rights activists. At the same time, Freeport was criticized for not having done enough to forge more positive relations with local communities.

Today, Freeport is working with local government and non-government agencies to build relationships and develop comprehensive land-use and human resource development plans. The key to this effort has been the Freeport Fund for Irian Jaya Development (FFIJD), which makes funds and expertise available to support the economic and social development of the region. The program, which began in 1996, calls for Freeport’s Indonesian subsidiary to contribute 1% of its revenues for 10 years to FFIJD programs.

With Freeport’s Indonesian activities under increased public scrutiny, the company agreed, in 1996, to submit to an independent audit of its social programs. The report, submitted last summer, noted the complexity of issues caused by rapid social and economic development, unceasing migration to the region and the mixing of ethno-linguistic groups. While it concluded that Freeport had gone beyond requirements or expectations, a number of recommendations were made to make existing programs more effective.

The recommendations were accepted and implemented by Freeport, which restructured its development plan to provide for more direct input by local people through their leaders. The administration of the development fund was changed from a tribal basis to one that is village-based, and programs for “capacity-building” were enhanced. Progress was made in the area of land-rights agreements with local villages to cover land used for tailings deposition and the expanded port. The agreements established programs in the villages for education, health care and infrastructure improvements.

Efforts have been made to help the tribally mixed villages set up institutions to help them relate to Freeport, the Indonesian government and each other. Cultural and anthropological research is being undertaken in order to reduce misunderstandings caused by cultural differences.

Perhaps the boldest initiative of all is the stand taken by Freeport in the area of human rights. The company and its Indonesian subsidiary have strongly condemned human rights violations in Irian Jaya. Toward that end, the company has forged an alliance with KOMNAS-HAM, the official human rights organization in Indonesia, to monitor and resolve situations which might affect the human rights of individuals and groups.

These efforts provide further proof that when Freeport Chairman Jim Bob Moffett decides to do something, he does it right.