US?s Pence visit seen to discuss Freeport issue
Monday, April 17 2017 - 03:04 AM WIB
US Vice President Mike Pence is scheduled to visit Indonesia on April 20-22 to discuss with President Joko Widodo (Jokowi) among others efforts to increase relations between the two countries including in terms of investment and trade amid accusations of protectionism by the US administration.
The planned visit also comes amid high profile dispute between US companies and the Indonesian government including tax issue faced by Google, recent termination of contract of JP Morgan by the Indonesian Ministry of Finance, and lingering dispute between gold and copper giant PT Freeport Indonesia with the Ministry of Energy and Mineral Resources.
Institute for the Development of Economics and Finance?s analyst Bhima Yudhistira Adhinegara was quoted by Kontan as saying Monday that Pence is expected to discuss among others the Freeport issue with Jokowi during his visit to Indonesia.
The Ministry of Energy and Mineral Resources has been locked in a dispute with PT Freeport, a local subsidiary of US giant Freeport McMoRan Inc, over new requirements for export of copper concentrates. PT Freeport has suspended its export after the government introduced a new policy requiring miners to convert their mining permit status into special mining business license (IUPK) from mining contract of work (COW) and make commitment to develop domestic smelters to be able to continue export of mineral concentrates. Foreign owned firms such as PT Freeport are also required to divest up to 51 percent shares to Indonesian investors. PT Freeport wants to convert into IUPK only if the new permit maintains similar legal and fiscal terms as those set out in the COW regime, a request which has been rejected by the government.
The government and PT Freeport have been engaged in negotiation talks since February, in the hope that they could reach amicable solutions by October 10. PT Freeport has previously threatened to go to international arbitration if no win-win solution can be achieved.
The ministry has recently issued a temporary IUPK for PT Freeport to allow the company to resume export, but the company has yet to apply for the export permit. (*)