From New York Times
Letter From Indonesia
The Papuans Say, This Land and Its Ores Are Ours
By JANE PERLEZ
Published: April 5, 2006
JAKARTA, Indonesia, April 2 — Titus Natkime, 31, the son of a tribal leader who encountered the first Americans to walk into the wilderness of Papua nearly 50 years ago, was clearly upset with his employer the American mining company, Freeport-McMoRan.
The Freeport-McMoRan and Rio Tinto mine, Grasberg, generates vast amounts of waste.
For generations, Mr. Natkime's clan has laid claim to much of the land in Papua, the Indonesian province where Freeport mines some of the world's largest copper and gold reserves. Now it was time for a payback, he said.
He brought out a draft document showing Freeport's offer: $250,000 to set up a foundation for the clan, plus $100,000 annually, a sizable amount in Indonesia's most remote and poorest province.
"Why should I accept it?" asked Mr. Natkime, who works in the company's government relations department, though he is hardly an ardent spokesman. "It's an insult." In comparison, he said, Freeport was making tens of millions of dollars every day. In the end, the family accepted the money, he said, but he is planning a lawsuit and demanding royalties.
Such defiance is symptomatic of the growing troubles in Papua, where four people have been killed in recent weeks in protests against Freeport. And it shows that times are changing for multinational companies and governments long used to working out concessions in remote areas with a handshake, over the heads of local people.
In March, Citigroup echoed the theme, saying in a report that such companies could no longer afford to ignore environmental and social issues. "In recent years, a groundswell of public opinion has caused sustainable development to become a serious business consideration for investors," the report said.
Mark Logsdon, an American geochemist who has visited the Freeport mine, agreed. Mining companies must seek and take seriously the "consent of the governed," he said. "Whether in Indonesia, Latin America or Africa, the increase in communications capability means that the essential isolation of 'resource colonies' is largely a thing of the past."
The protests in Papua provide an example of what can happen when a natural resource company, backed by an unpopular central government and a heavy-handed military, fails to pay careful attention to the local people, whose lives have been disturbed and who feel the riches in the ground are theirs, not the foreigners'.
At one time, there was hardly a place more remote than Papua, where Freeport's first explorers encountered Papuans armed with bows and arrows and wearing penis gourds, practices that still exist. Yet, try as the government might to preserve that isolation — for the past two years it has banned foreign journalists from the province, granting only very occasional permits — the extent of the problems is impossible to hide.
In March, long-simmering tensions exploded when Indonesian riot police officers and several hundred Papuan protesters clashed in the provincial capital, Jayapura, leaving three policemen and an air force officer dead.
Freeport's profits are soaring as gold prices have reached 25-year highs of more than $550 an ounce. The company, which is based in New Orleans and is in partnership in the Papua mines with the Rio Tinto group of Australia, is one of Indonesia's biggest taxpayers, and has been for many years.
But Papuans argue that they have never received a fair portion of the estimated $33 billion in direct and indirect benefits the company says it provided to Indonesia from 1992 to 2004.
Repeated efforts to reach the spokesman for Freeport in Indonesia, Siddharta Moersjid, were unsuccessful.
As evidence of the neglect, the Papuans, who are indigenous Melanesians with broad features and curly hair that contrast with the Malay heritage of most Indonesians, point to their relative lack of progress compared to the rest of Indonesia.
In the current ugly mood, the people around the mine give short shrift to the more than $150 million that the company says it has spent on community development.
Instead, they complain that they have lost their most precious assets: their land; their river system, which is used as a waste chute; and their sago plants, which have disappeared under more than 90 square miles of mine waste, accumulating at a rate of some 700,000 tons a day.
Resentment is compounded by the presence of the Indonesian military, an almost entirely non-Papuan force that is often most intent on extracting its own cut of the province's resources, which run not only to gold and copper but also to timber.
"Freeport is being held hostage for its relationship with the armed forces and the police," said Agus Sumule, a professor of agriculture at the University of Cenderawasih, the province's main campus. "There is no way they can do their operations without the armed forces, and that's because of their bad relationship with the local people." The tight grip of the military fuels calls for independence that send shudders through the Indonesian authorities, he said.
The government knows it is in a tough position. The defense minister, Juwono Sudarsono, justified the ban on foreign journalists in February, saying they believed in human rights standards that did not necessarily apply in Papua. "Papua is a very touchy issue for us," he said.
From the start, it has been sensitive for Freeport, too. The Natkimes are a case in point.
Freeport has already paid for Mr. Natkime's travel across the United States, financed his English language training in New Zealand and given him a house in Jakarta. In a further effort to placate his family's claims, it offered him the job in government relations.
But he wants more, not just for him but for all Papuans.
This contrasts sharply with how the company appeased Mr. Natkime's father, Tuarek, in 1967. Balfour Darnell, a self-described roughneck who built Freeport's first base camps, soothed Tuarek Natkime's suspicion of the outsiders with a simple tool that was half hatchet and half hammer.
"Boy, that did it," Mr. Darnell said of Mr. Natkime's evident pleasure, according to the account in the book "Grasberg," by George A. Mealey, a former Freeport executive. "He was in seventh heaven with that thing."
With the promise of a few sacks of salt, the tribal leader said he would clear a landing area for the company helicopter. "So we blasted off and that was the end of that meeting," Mr. Darnell marveled. "We were safe."
Now, in the age of Tuarek Natkime's more educated, more worldly son, it is not clear anymore how safe.
Jawawa.net: Indonesian Business and Investment News Aggregator