Freeport stays open; probe looming

Unswayed by the increasingly violent demonstrations against the massive gold and copper mine operated by PT Freeport-McMoRan in Papua, the government says it will honor the contract it signed with the U.S. company, The Jakarta Post reported on Monday.

Speaking after chairing a special meeting Sunday, Coordinating Minister for Political, Legal and Security Affairs Widodo AS said the government would order an integrated financial audit to determine ?whether the company does not benefit the local community?, as the protesters have alleged.

?PT Freeport runs its operation based on an amended contract signed with the government in 1991. The first contract was signed in 1967. Under the amended contract, the company provides funds for community development programs. In 2005 alone, it allocated Rp 400 billion (US$40 million) for this purpose, including Rp 5 billion each for the Amungme and Komoro tribes, the biggest tribal groups in Papua.

?The company has, also contributed to state revenue, either through dividends, taxes or royalties. It has also created thousands of direct and indirect job opportunities. We will perform an integrated audit to see whether those funds have been used properly for the benefit of locals, rather than simply closing the company,? Widodo said.

Attending the meeting Sunday were Defense Minister Juwono Sudarsono, Energy and Mineral Resources Minister Purnomo Yusgiantoro, National Intelligence Agency head Syamsir Siregar and State Minister for State Enterprises Sugiharto.

Purnomo said the audit would include audits of the environment surrounding the Freeport mine, of the company?s production activities, of state revenue from the mine and of the security arrangements surrounding the mine.

Citing the latest financial report, Purnomo said the government, which has at least a 10 percent share in the mine, earned at least $1.6 billion in revenue, including $740 million in ?indirect income?, from the Freeport mine in 2005.

Sunday?s meeting was held in response to heightened tension in Papua following a demonstration against Freeport on Thursday that turned deadly as about 1,000 rock-throwing protesters faced off with police near Cendrawasih University.

During the clashes, three officers from the police?s elite Mobile Brigade and a member of the Air Force were killed and dozens of other security personnel and civilians injured.

The violence was a demonstration of the hatred many Papuans feel for Freeport and for government security forces tasked both with protecting the mine and quelling a low-level separatist movement in the province.

Widodo, however, said the government would not review security arrangements at Freeport.

?It is agreed that Freeport must provide its own internal security system. While the police, and of course soldiers, will be deployed at a certain radius around the mine which is under their jurisdiction,? the minister said.

Meanwhile, the Papua office of the National Commission on Human Rights has established a team to investigate the violence on Thursday.

?The death of four officers is a strong indication that human rights violations have taken place. But before we jump to any conclusions, we will hold a thorough investigation,? commission secretary Friets Ramandey said.

The team will also investigate reports that following the killings, Brimob personnel acted ?excessively? in searching for those suspected of involvement in the deaths. (*)