DTE 59 / November 2003: Protests over fatal collapse at Freeport/Rio Tinto West Papua mine

The fatal accident happened early on October 9th, when part of the southern wall of the vast open-pit mine collapsed, and 2.3 million tonnes of rock and mud crashed down, engulfing mineworkers and heavy machinery. US-based mine operators Freeport McMoRan confirmed that two workers had been killed, five injured and a further six were unaccounted for, presumed dead.

The day after the disaster, Mines and Energy Minister Purnomo Yusgiantoro said the mine would stop production for two weeks, while a government team investigated the cause of the accident. However, it then emerged that the mine would not be closed down after all - meaning that production in the unaffected parts of the pit would continue while the search for the bodies of the six missing workers continued. The company's underground mine, milling facilities and concentrate delivery systems remained unaffected.

The company issued only minimal information about the collapse, which it described as a "slippage of material" in a section of the Grasberg mine.

According to information published in the Sydney Morning Herald, the company had more than two days' warning that a landslide was imminent before it occurred. The company moved some equipment out of the way, but failed to prevent workers entering the danger area, because the slide was expected to be contained above them.

In another report, Suryatono, a mining ministry official who is leading the government investigation, said that an employee had told the head of mining operations at Freeport that there could be a landslide, but the head had made a "wrong decision". In previous statements, government officials had claimed the pit collapse was a "natural disaster".

Freeport McMoRan itself has been more forthcoming about the impact of the landslide on this year's gold and copper production targets - reassuring investors that business would be only slightly affected. The company has not yet given a reason why the mine wall collapsed, but has denied that it was due to excessive production.

There is no doubt that Grasberg is a top global producer: the mine contains the world's largest single gold deposit, and is among the top three copper producers. The huge pit was once a mountain-top in the rocky backbone of West Papua, now being gouged out at a rate of over 200,000 tonnes per day. After gold and copper extraction, the tailings are dumped into local rivers and carried downstream to a "deposition area" in the lowlands between the mountain range and the Arafura Sea.

There is also no doubt that maintaining these levels of production in an area of unstable geology is asking for trouble. During the past six years, there have been reports of at least four major accidents - three of which involve loss of life (see box below).

On October 28, 2003, hundreds of West Papuan youths from the West Papua Students Alliance protested outside Freeport's Jakarta office in Kuningan.

A statement issued by Papuan students association and the Papuan organisation Demmak, demanded that Freeport set up an independent body to investigate the environmental, spiritual, cultural, socio-economic and socio-political costs of the company's operations in West Papua. The protesters also demanded the immediate withdrawal of military around the mining areas and an end to Freeport's financial contributions to the military.

West Papuan and Indonesian community groups called a press conference in Jakarta on October 22nd, to coincide with President Bush's visit to Indonesia. The investigation into the killings of two Americans employed by Freeport-Rio Tinto was expected to be on the agenda for Bush's discussions with President Megawati. The groups demanded an in-depth investigation into what they termed the "real crimes" at the West Papua mine, and into the thousands of victims there.

"George W Bush demands justice for two American victims - Papuan people demand justice for THOUSANDS of victims of Freeport-Rio Tinto!"

The Jakarta protests were supported by activists in London who picketed Rio Tinto's offices in central London. The following day, Saturday 25th October, windows at both Rio Tinto and BP's offices were smashed. (BP is the other big multinational presence in West Papua, through the Tangguh gas project.)

WALHI, the Indonesian environmental NGO, demanded that the Indonesian government curb operations at the mine. "This event proves Freeport is not competent to handle the current high level of mining production. The government must immediately enforce a reduction in the Freeport production capacity," said WALHI director, Longgena Ginting. WALHI said that Freeport/Rio Tinto was well aware of the risk of its operations in an area of high rainfall and seismic activity, but that this had not stopped the company from raising production capacity "in the scramble for maximum profits." WALHI wants Indonesia's parliament to pressure the government to conduct a review of all mining contracts and improve the licensing system "which, until now, has given absolute rights to mining companies at the expense of the public."

The mining advocacy network JATAM is demanding that the government reviews its decision to allow mining in protected forests, as exposing the underlying, unstable rock structures risks causing landslides in the wet season.

Fatal landslides, floods and pollution

Freeport claims to have a good health and safety record at the mine, but the October 9th disaster plus past incidents indicate otherwise.

In June 1998, an Indonesian newspaper reported that a 20 foot wave of waste water was released from Lake Wanagon, flooding Waa village.
In 1999 there was another overflow, but no casualties were reported.
In July 1999, local NGOs reported that 2 Freeport workers died during a series of floods and landslides near the mining town of Tembagapura.
A 1999 report by the Jayapura-based environmental organisation YALI and the Indonesian Legal Aid Institute indicated that five local indigenous Papuans died as a result of copper poisoning from eating molluscs and other living organisms from the river system affected by Freeport tailings.
In May 2000, four contract workers were killed when waste rock - overburden from the mine - collapsed into Lake Wanagon, sending a wave of water, mud and rock crashing into the valley below.
In April 2001, WALHI reported that tailings from the Freeport/Rio Tinto mine had polluted 35,820 hectares of land downstream of its operations and a further 84,158 ha offshore. The pollution had also reached the Lorentz National Park (see DTE 49). The pollution has killed river and forest resources, devastating the livelihoods of Amungme and Kamoro indigenous communities living downstream of the mine.

(Source DTE 39:6 Nov/98; DTE 47; Development Aggression, Observations on Human Rights Conditions in the PT Freeport Indonesia Contract of Work Areas With Recommendations, Prepared by Abigail Abrash, Consultant for the Robert F. Kennedy Memorial Center for Human Rights, July 2002)

The Indonesian government is under public pressure to take stern action against Freeport, but it lacks the political will to do so. A few days after the disaster, energy and mineral resources minister Purnomo Yusgiantoro said the government would halt operations at the mine for longer than two weeks if its investigation showed that production levels had been responsible for the accident. He said if Freeport was found to be violating its production permit, the government would impose a penalty. But it is hard to imagine Jakarta taking this kind of action. Freeport/Rio Tinto is Indonesia's biggest corporate tax payer and provides much-needed income for Indonesia's debt-laden economy. The company pays the government US$178 million in revenues including US$145 million in taxes and US$33 million in non-tax payments. Getting tough with Freeport would also risk putting off other potential investors, which Indonesia is desperate to attract back into the country.

The other compelling reason why the Jakarta government continues to be soft on Freeport, is the fact that the government is itself a minority shareholder in the company. It currently holds 9.36% of PT Freeport Indonesia, along with Freeport McMoRan 81.28% and Indocopper 9.36%.

The lone critical voice within the government has come from the environment ministry, which has consistently called for improvements in environmental management at the mine. Unfortunately, the environment minister does not have the political clout to take effective action and business interests have always prevailed over environmental protection and worker safety.

After the fatal accident in 2000, then environment minister Sony Keraf tried but failed to secure a temporary suspension of production. He only succeeded in forcing the company to reduce production from 230,000 to 220,000 tonnes per day for a short period (see DTE 47).

In 2001, Indonesia's environmental protection agency named the Freeport/Rio Tinto mine and Newmont's North Sulawesi gold mine as the worst polluters in eastern Indonesia. The agency's head, Sony Keraf, said Freeport's level of pollution was "severe" and warned that the government may require compensation for the damage caused (see DTE 49).

Current environment minister Nabiel Makarim, has continued to demand improvements from the company. In June, he told Freeport to improve its environmental record or face legal action. Makarim said Freeport would be taken to court if it failed to improve thoroughly its tailings disposal system by 2004. He said the company had two options: building a pipeline to channel tailings to the coast and dump them under the sea, or improving the current disposal area. Freeport has indicated that it prefers the latter option, for reasons of lower cost and risk.

What will come of this threat remains to be seen. Until now, the only successful legal action against Freeport has come from the NGO WALHI, not the government. In August 2001, South Jakarta District Court declared Freeport guilty of violating Indonesian environmental law (No.23, 1997), by deliberately concealing information, giving false explanations and misleading the public about the risks of the May 2000 Wanagon rockslide disaster. The court ordered the company to reform its waste management systems (see DTE 51). The case is currently under appeal in the Supreme Court.

Business interests and power politics have also overridden attempts to address human rights problems associated with the mine. Earlier this year the company was forced to reveal that it paid over US$11m over 2 years to the Indonesian military (TNI) for its security services at the mine (see DTE 57). Yet TNI security personnel have been responsible for severe human rights violations at the mine during its 27-year history. There has been no government instruction to stop this relationship however, because of the military's increasingly powerful role in Jakarta decision-making. Freeport has never committed itself to ending the financial relationship with TNI, as this could provoke a violent incident instigated by the military to show the company how much TNI protection is needed.

Instead of suspending operations and insisting on a proper investigation of human rights abuses associated with the mine, Freeport has attempted to buy local communities' favour by devoting 1% of profits for community development. In June, the company announced the community development budget for 2004 at $18.3 million. One could argue that at least this is higher than the amount committed to the military, but the fact is that these funds are not directly controlled by communities. At the same time, the threat of human rights abuses will continue as long as the military retains its presence at the site.

Freeport McMoRan's 16.5% shareholder, the British/Australian mining company, Rio Tinto, has remained silent about the tragic events at Grasberg. Yet this is the company which provided the funding to allow Freeport to increase production from 125,000 tonnes per day in 1997 to the current levels of 240,000 tonnes per day. In principle, the company is permitted to go even higher to 300,000 tonnes per day under its 1997 agreement with the Indonesian government. In return, Rio Tinto gets a 40% share in the profits from the expanded production.

Rio Tinto - itself the world's second largest mining company after BHP-Billiton - depends on Grasberg for a substantial share of its profits and production. In 2002 Grasberg accounted for 20% of the group's net earnings (US$132m out of $651m).

In terms of production, Grasberg also makes a huge contribution to Rio Tinto's totals: also in 2002, the group's share of Grasberg's gold ouput was 1m ounces, more than 40% of the group's total gold production. Its share of copper was 225,500 tonnes of copper - 25% of the company's total copper production.

Rio Tinto has come under attack year after year for its role in Freeport and the ongoing human rights violations and environmental disasters associated with the mine. This latest tragedy will serve as yet another reminder that this company is failing to fulfil its responsibilities to workers, the environment and the communities affected by its operations.

STOP PRESS:

Military to pull out of mine security?

On November 11, media reports quoted the head of Indonesia's military forces as saying he wants to withdraw troops guarding the country's biggest mining and energy operations - including the Freeport/Rio Tinto mine.

"We are not mercenaries. We have never signed any contract [with companies]", said military commander General Endriartono. "The military needs more time to focus on conflicts that demand our attention. We proposed in a November 4 cabinet meeting not to guard these companies any more."

The announcement may be linked to behind the scenes pressure from the US which is blocking US$400 million in military aid to Jakarta over the killing of two American teachers in an ambush near the Grasberg mine in August 2002.

The withdrawal of military guards from 'vital projects' has been a major demand of human rights defenders in both West Papua and Aceh. In Aceh military officers guard the gas installations of the giant US oil corporation, ExxonMobil. Their presence has been linked to a series of gross human rights abuses which form the basis of a court case in the US, filed by the International Labor Rights Fund - see DTE 53/54. In West Papua, communities and NGOs concerned about the developments at Freeport and at BP's huge Tangguh gas and gas processing project planned for Bintuni Bay, will be watching closely to see whether Endriartono really means what he says.

Military withdrawal would not mean that the notorious police mobile brigade (Brimob) would also give up their lucrative security deals to guard company facilities.

(Source: Mining News Net 11/Nov/03)