Irian Jaya administration should own a stake at Freeport
Saturday, March 10 2001 - 04:00 AM WIB
Councilors at the Irian Jaya Provincial Legislative Council demanded that PT Freeport Indonesia, with its operation in Irian Jaya, found a way-out to allow local administrations in Irian Jaya to own a stake at the company.
They also demanded the company to be more transparent to the public about its production of minerals and income from its operation in Irian Jaya so that the local administrations would get the right amount of royalties and other levies from the company.
Councilor Paul Sumino from the Council's Commission B said that so far the Irian Jaya administration had been taken aside from the company's shareholding, as the company is 90 percent controlled by Freeport's parent company Freeport McMoRan, and 10 percent by the central government and private entities, including that owned by Muhammad "Bob" Hasan.
Sumino suggested that Freeport's stake owned by Bob Hasan be transferred to local administration. But the process of the transfer must be pursued by the central government, in this case the Ministry of Finance.
"It will be better if the local administrations own a stake at Freeport Indonesia so that they will have a sense of belonging and therefore are responsible to improve security and order at the company's sites," he said.
According to Sumino, in the company's 1998 contracts of works (COW), there is an article that gives opportunities to local administrations to talk with Freeport Indonesia over the company's roles in the development of Irian Jaya.
Sumino said that such an article had not been implemented optimally, and he hoped that Freeport would improve its cooperation with local administrations following the implementation of regional autonomy.
He contended that in the future, negotiations of contracts of works must involve local administrations. This not only covers COW with Freeport but also other contracts involving companies exploiting natural resources in the province, including BP Amoco's liquefied natural gas plant in Tangguh, Bintuni, Manokwari.
Currently, the Irian Jaya provincial administration receives 12 percent of Freeport net income, while Mimika district administration gets one percent of Freeport's gross revenues.
Meanwhile, councilor Sam Roesoeboen demanded the company to be more transparent on how many minerals it produces, how much money it gets from its operation in Irian Jaya, so that local administrations could get the right amount of royalties from the company. (*)