House to summon Freeport

The House of Representatives commission VIII on mining and energy will summon the giant gold mining firm PT Freeport Indonesia over the next two weeks, according to legislator Priyo Budi Santoso.

Priyo said that the commission would question Freeport on the allegation that the company had destructed the environment in Irian Jaya province.

He added that the other important issue was Freeport's divestment plans. He said that based on the second contract signed in 1996, the government and the national private sector should have been allowed to have up to 50 percent stake in Freeport. "Until now, it's nil."

Freeport has been under attack over allegation of environmental destruction and human rights violation. There has been strong pressure for the government to either revise the contract of work or terminate the contract, which was won by Freeport during the 32-year rule of the former corrupt government of Soeharto. Freeport has also been alleged of involved in corruption during the Soeharto era.

Meanwhile, Foreign Minister Alwi Shihab that the government expected a concession from Freeport to make the necessary correction as demanded by the public.

He said that terminating the contract might send a wrong signal to other foreign investors.

"If the contract of Freeport is terminated, it will create a legal uncertainty. This will be bad for us in terms of foreign investment. We expect a concession from Freeport. So what needs to be fixed, please do it to accommodate the aspiration of the people," Shihab was quoted as saying by Kompas daily.

Separately, Speaker of the People's Consultative Assembly (MPR) Amien Rais said that Indonesia should not be worried to be shunned away by foreign investors if it's committed to create a clean business.

He said that if Indonesia was free of corruption, collusion and nepotistic practices, foreign investors would rush in.

He said that the government had so far been practicing an upside down logic, in which the country avoids cleaning up dirty businesses to maintain foreign investment.

He stressed that Indonesia has the rights to make correction of a contract of company if it's deemed to be threatening the country like in the case of Freeport which is allegedly destroying the environment.

Meanwhile, the Bisnis Indonesia daily quoted secretary general of the Indonesian Transparency Society Erry Riyana Hardjapamekas as suggesting a new due diligence audit on Freeport by an independent international auditor to end the current controversy.

The president of state tin mining firm PT Tambang Timah said that the due diligence audit should focus on the company's financial aspect, contract of work and environmental aspect.

Separately, director of environmental NGO Walhi Emmy Hafild said that the due diligence should also focus on whether Freeport had provided a commission to the Indonesian authorities during the Soeharto era to ensure that the company had not committed a corrupt and collusive practice, and had not violated the international corruption act of the U.S.(*)