Jakarta | July 29 2015 | 6:15 AM
The government and miner PT Freeport Indonesia are due to negotiate a contract extension two years before the current contract ends in 2021. The firm seems to have gained a green light through a special mining permit.
The history of environmental damage should be considered, in which Freeport’s destructive capacity increased after raising its production from 75,000 tons to 300,000 tons of ore daily. During 2006-2007, the Indonesian Forum for the Environment (Walhi) assessed that the damage caused by Freeport regarding its tailing dam alone reached the size of Bandung, the capital of West Java.
The tailing dam, now legalized as the Modified Ajkwa Deposition Area (ModADA), used to be the Ajkwa River, vital to the life of local people. Freeport first damaged the area as vast as Bandung and only later, by a ministerial agreement, was the flow of Ajkwa diverted and the vast tailing disposal area turned into the ModADA.
So far this damage has never been accounted for. Nor was there accountability for the loss of biodiversity, apart from Freeport’s program for biodiversity protection in another region. Freeport easily disregarded the damage due to its affluence. And the Indonesian government always bows to pressure in matters of environmental responsibility.
The government should acknowledge that the production increase licensing in the past was a mistake as it resulted in irreparable destruction. Thus strict conditions should be imposed to prevent further damage.
In the event of extending the mining contract the government should include provisions on the environment that are not related to those already contained in relevant regulations — which have been fulfilled by Freeport as evidenced by its annual Corporate Environmental Compliance Program rating of “proper” — but also related to critical issues such as reducing emissions from massive energy consumption, managing biodiversity, restoring natural habitats and correcting tailing disposal. The government should ask Freeport to offer its prior environmental commitment, beyond regulations, before specifying tougher prerequisites where necessary.
The other aspect is whether it is appropriate for President Joko “Jokowi” Widodo to decide on the future contract without consulting the people of Papua who are already placed at a disadvantage. The government’s position should be the outcome of its consultation with Papuans, especially those subjected to the direct impact of Freeport’s operations for almost 50 years.
The biggest environmental impact posed by Freeport concerns the massive change in landscape and the effect of river tailing disposal. Landscape change has to be recognized as a consequence of the government’s acceptance of Freeport’s operations through its Environmental Impact Analysis (Amdal); but its rehabilitation, including of biodiversity, should be clearly defined in the Mine Closure Plan.
River tailing disposal was also approved through the Amdal, but many experts brought further attention to the issue particularly after observing environmental impacts of the Ok Tedi Mine in Papua New Guinea. Freeport should be required to improve its tailing management, including the possible application of a less harmful tailing disposal method.
In anticipation of further environmental damage, there has not been any independent and transparent impact assessment. Moreover, Environment and Forestry Minister Siti Nurbaya Bakar indicated in February that the latest environmental audit was done in 1990. Thereafter, annual supervision was conducted and in 2011 this inspection was discontinued for security reasons. Ecologically, Freeport has caused remarkable damage — the problem is that it was with the Indonesian government’s permission through Amdal approval and operational extensions without any environmental audit in advance.
The formal obligations pursuant to government regulations have most likely been carried out, as reflected in its “proper” rating. However, many other things should be given attention if Freeport wishes to demonstrate its increased performance, notably in response to the expectations of local people and civil society organizations.
It is thus necessary to map the stakeholders and their respective aspirations regarding environmental performance, to which Freeport should respond with detailed corrective actions including their time frames and commitments to adequate resources. If some expectations are deemed as yet unfulfilled by Freeport, they should be prioritized in its action plan.
Various reports show that the tailing disposal dam known as ModADA has an area of 230 hectares, 120 kilometers from the coast. During normal Freeport production, the tailing deposited in ModADA reaches 230,000 tons daily, which is carried by rainwater, permeating the Ajkwa River.
The report “Indonesian seas in crisis” issued by Greenpeace in 2013 said that Freeport’s tailing runs into the Otomina and Ajkwa rivers at an estimated rate of 80 million tons annually, ending in the sea. President Jokowi should therefore conduct an independent and transparent environmental audit and consult with Papuan people before making a decision. Otherwise the risk of environmental destruction will continue. At a hearing with the House of Representatives Commission VII, the Environment and Forestry Ministry was instructed to demand Freeport’s environmental audit, which should be directly supervised by independent auditors and the ministry.
Jokowi has changed the Contract of Work into a special mining permit, which is correct and should be appreciated. This puts Freeport in a lower position (as a “contractor”) compared to the previous status (equal to the government), thus facilitating government control. It also gives the signal that Jokowi does not submit to US interests. But the status change will certainly be followed by bargaining between Freeport, or even the US government, and the Indonesian government. Transparency and benefits for Indonesia should be guaranteed.
The President should ponder the tasks and responsibilities of regional administrations as a consequence of the mining business license regime. Many regions, including Papua, are not prepared with adequate capacity to perform supervision over the licenses issued. The homework is therefore to undertake a crash course to increase regional administrations’ capacity.
Jokowi need not worry about urging guaranteed Indonesian interests in the negotiations. The fear of less state revenue is no more disquieting than the wasting of state funds on environmental restoration. The change of government should not merely be a changing of the guard, but should also provide the momentum to correct past errors.
From the viewpoint of the environment and the government’s performance in controlling and acting against the destruction taking place, the operational extension of Freeport virtually indicates unpreparedness. It is at least reflected in the absence of any government audit and supervision in the last four years.
In the entire process of negotiation, the government has been more inclined to make conventional economic calculations by ignoring the environment, with divestment and downstream operation as dominant topics. Increased ownership without reviewing the impact of landscape and ecosystem damage means greater government responsibility for restoration. The destruction should first be handled.
A correct environmental audit and assessment should be carried out before deciding whether or not Freeport can continue to operate. Even if the region’s mining operation is nationalized, there’s no guarantee for damage reduction as long as its production method and volume remain unchanged or sustained.
The biggest environmental impact concerns the massive change in landscape and the effect of river tailing disposal.
The writer is executive director of the Indonesian Forum for the Environment (Walhi).