Freeport: On mining companies and

colonialism
Published Date: 01-05-2001

The following is an interesting, and rare, exchange between what is probably the world's
major Marxist website and a former employee of Freeport in West Papua. The gulf
between the two is massive as you'd imagine though both unfortunately employ the term
"stone age" to describe the socio-economic foundations of Papuan societies before the
arrival of western-based entrepreurial capitalism.

On mining companies and colonialism

Britain WSWS : Correspondence

6 February 1999

The WSWS has replied to the following letter, sent by a former employee at the Freeport
copper and gold mine in the Indonesian-ruled territory of West Papua (Irian Jaya). The
letter was sent in response to a series of articles and an eye-witness account on the
WSWS exposing last July's military massacre on the West Papuan island of Biak.

To the editor,

Having lived in Tembagapura and personally observed the interaction between the
management of PT Freeport Indonesia and the Indonesian government and its local army
for five-and-a-half years (1989-1994), I can tell you that your reporting is very slanted
towards your "Socialist" perspective on how the world operates.

First of all, Freeport hires and trains up to 35 percent of its entire workforce of 18,000
employees from the native peoples of Irian Jaya. These isolated, stone aged headhunters
were actively involved in "revenge" type inter-tribal wars, decapitating their enemies and
eating their bodies up until the late 1970s when the Indonesian Army put a stop to all
their weekend "fun". The last reported acts of cannibalism occurred to a Dutch farmer
and his family in 1976 in the next valley over from the Freeport mining operation.

Many of the senior staff that I worked with at Freeport Indonesia were not "accountants"
but full-time missionaries, including the son of US Christian missionaries who had been
on the island since the 1950's. I saw this man and his group start the first commercial
fishing village with modern hospitals, proper training in basic safety in logging, home
construction and fish preparation, that would have never been taught to the Irianese if the
Americans had not come into their lives to build and expand the mine.
The senior staff at Freeport provided free medical access for all the local tribal peoples in
"Lower Wa," a village of 300 natives just below the main townsite at Tembagapura. They
built schools and health clinics in all the surrounding villages within helicopter flying
distance, as well. Freeport provides agronomists from the University of Texas at Austin
to assist in summer internships in these villages to educate these stone-age natives in
farming and animal husbandry sciences. Freeport would purchase the excess vegetable
crops after the local villagers had supplied their own needs, providing their first real
income from their farming efforts. All the while the company provided free medical and
educational opportunities to these local tribes.

The Indonesian government would never have provided these basic services because
these natives are Christians and not Muslims! If it were not for Freeport's presence in
Irian Jaya these past 30 years, I am convinced the corrupt and out of control Indonesian
army generals would have totally eradicated the entire West Papuan population of 1.8-
million people, decades ago. It is unfortunate that the world's largest and richest copper
and gold mine was discovered on Irian Jaya in 1969. Unfortunately, no one can turn back
the "hand of time".

There has been horrendous human suffering in the name of the great "Socialist"
Revolution in Eastern Europe that has claimed far more human casualties than all the
Indonesian atrocities combined. This is no justification to kill innocent women and
children who only want their freedom to worship as they please and have a safe home and
equal and bright opportunity for their children's futures. Maybe it's time the UN finally
stepped into the mess in Indonesia and set up an Atrocities Review Commission and high
court to hold the Indonesian officials responsible for their human rights abuses. This
should have occurred 20 years ago when the horrors of East Timor were first recorded
but it's never too late for justice.

Just because the "Capitalist" got to Irian Jaya before the "Socialists" did, or worse the
"Marxists," doesn't mean that Freeport hasn't tried out of its own pocket to help protect
and help these people in the process these past 30 years. Could they have done more?
Probably, but I can tell you from my own personal experience, the Indonesian
government has forced Freeport to limit the amount of aid, education and job
opportunities it has been able to provide these poor people. It was either "play by
Suharto's rules" or leave Irian Jaya and let the Indonesian government handle the "re-
location problems" without any outsiders to record the human atrocities that would had
been far worse if Freeport had not chosen to stay and fight the Jakarta corruption.

"Two wrongs will never make a single right" but at least the people I worked with at
Freeport in 1989-1994 did try and I believe made a remarkable difference to improve the
local natives' quality of life. There is only so much a non-Indonesian company can do
when they are constantly being reminded that they are only "visitors" whose visas can be
revoked on a minute's notice. Please try to tell both sides of this tragic story in the future,
that is if you young "Marxists" have the guts and freedom to do so.

Best regards, PW
5 February 1999

Dear PW,

Thank you for writing to the World Socialist Web Site. Our articles on last July's
massacre carried out by the Indonesian regime on the West Papuan (Irian Jayan) island of
Biak did not deal in any detail with the role of the Freeport mining operation.

We simply made the point that after centuries of Dutch colonialism and three decades of
Indonesian rule, West Papua has some of the worst social, health and education
conditions in the world, despite hosting one of the richest copper and gold mines in the
world -- the $40 billion Freeport mine, owned jointly by the Freeport McMoRan
company of the US, Rio Tinto of Britain and the Jakarta regime.

Nevertheless, your letter raises some underlying issues about not only the role of Freeport
but also that of colonialism and capitalism historically. You suggest that Freeport
remained in West Papua to fight the atrocities and corruption of the Indonesian regime,
rather than to make profits. In reality, the Freeport consortium entered into a lucrative
partnership with the Suharto family and its cronies in order to gain privileged access to
the mine's wealth. The company enjoys generous tax concessions, pays its local
workforce far less than workers in the US or Britain, and is notorious for toxic wastes
that devastate the downstream environment.

Even if some of the executives and senior staff involved, including yourself, approached
their work with the best intentions of lifting the living conditions of local people, the
objective requirements of corporate profit-making on a global scale dictate the payment
of the lowest wages possible and the cutting of all costs, including those for the
protection of the health and environment of the local people. In other words, the
staggering inequality observed in West Papua--a mining project pumping out billions of
dollars in revenue while most of the population lives in terrible poverty--is the necessary
outcome of global capitalism. The same can be seen across the border in Papua New
Guinea and around the world.

Your letter tends towards the centuries-old argument of the "white man's burden"--that
colonial plunder was necessary to wrench the primitive peoples of Asia, Africa and South
America into the modern world. Capitalism has certainly done so, but how and at what
cost?

In Capital, Karl Marx drew out the central role that colonialism played in the genesis of
industrial capitalism. More or less in chronological order, Spain, Portugal, Holland
France and Britain employed the most brutal means, including widespread massacres and
slave trading, to exploit the labour and resources of their colonial conquests. This, in turn,
provided the momentum for the violent transformation of their own urban and rural
populations into wage workers. These interconnected processes were, as Marx
established, essential for the original, primitive accumulation of industrial capital.

Drawing on contemporary records and accounts, Marx gave a picture of the methods used
by the Dutch authorities in the East Indies, now Indonesia. "The history of the colonial
administration of Holland--and Holland was the head capitalistic nation of the 17th
century--'is one of the most extraordinary relations of treachery, bribery, massacre and
meanness' (Thomas Stamford Raffles, The History of Java, London 1817).

"Nothing is more characteristic than their system of stealing men, to get slaves for Java.
The men stealers were trained for this purpose. The thief, the interpreter, and the seller,
were the chief agents in this trade, native princes the chief sellers. The young people
stolen were thrown into the secret dungeons of Celebes, until they were ready for sending
to the slave-ships. An official report says: 'This one town of Macassar, e.g., is full of
secret prisons, one more horrible than the other, crammed with unfortunates, victims of
greed and tyranny fettered in chains, forcibly torn from their families'" [Karl Marx,
Capital, Volume 1, Progess Publishers, Moscow, 1986, page 704].

Marx quoted Raffles, once the British Lieutenant-General in the region, but the British
surpassed such cruelties in Africa and the negro trade to the Americas. Liverpool, as
Marx put it, "waxed fat" on the slave trade.

Nor were the aboriginal populations of North America or Australia treated any more
humanely by British colonialism. Indians and Aborigines were not enslaved; they were
massacred and the survivors driven from the land.

It took these means to establish on a global scale what is routinely presented as an

"eternal law of nature"--the transformation of the social means of production and
subsistence into capital, and the mass of the population into wage-labourers. Capital, as
Marx said, came into the world "dripping from head to foot, from every pore, with blood
and dirt".

All the while, the barbaric treatment of the native people, often still living in near stone-
age conditions, was sanctified by the Christian churches in the name of bringing God and
civilisation to the heathen. The missionaries frequently made a unique contribution to
these processes by corralling dispossessed native people into settlements where they were
ravaged by disease. Today's missionaries may provide rudimentary facilities but they do
not challenge the operations of companies such as Freeport. On the contrary, by
encouraging the creation of private property rights over land and the introduction of cash
crops and other commercial enterprises they facilitate the emergence of an indigenous
capitalist layer.

It is true, as you say, that no one can turn back the "hand of time". The people of West
Papua can and must be provided with the best that modern science, technology and
society have to offer. But this will only be achieved on a truly voluntary, democratic and
humane basis by reorganising society as a whole so that human need, not corporate profit,
is the guiding principle. That is the basic perspective of socialism.

You equate socialism with the Stalinist regimes that existed in Eastern Europe. These
bureaucratically-dominated states were the antithesis of Marxism, based on the
suppression of working class democracy, social inequality and a nationalist outlook. Our
movement, the Fourth International established by Leon Trotsky, has an unbroken history
of struggle against Stalinism. Of course, this question cannot be adequately dealt with in
a letter such as this, but if you wish to examine the issue, there is ample material on the
World Socialist Web Site.

Yours sincerely,

Mike Head

for the World Socialist Web Site

Copyright 1998-2004
World Socialist Web Site

West Papua: Freeport Mining Must Close

Down, United States Should Be Held
Responsible For Crimes Against
Humanity
Freeport McMoRan copper and Gold should be closed down and the United States should
be held responsible for crimes against humanity and against the environment in Papua.

The history of Papua is a history manipulated by the political and economic interests of
other countries, especially the United States which eventually encouraged Indonesia to
carry out the annexation of West Papua. The political process that occurred prior to the
implementation of the 1969 Act of Free Choice is a process in which the ideological
interests of the world played an important role in the process of the history of Papua. The
Capitalist Bloc (the West) led by the United States and the Socialist Bloc led by the
Soviet Union played a major political part in the political bargaining which led to the
decisions concerning the political fate of the Papuan people up until today.
On the one hand there was the United States which played a role in cutting off political
access of the Dutch Government to its colony in West Papua and in encouraging the
Netherlands to accept a project of political diplomacy drafted by American diplomat,
Elsworth Buncker, which resulted in the so-called Buncker plan in which important
political concepts were drawn in relation to the right to self-determination of the West
Papua people. The Buncker plan was at the origin of the famous document known as the
New York Agreement (NYA) signed by the Dutch and the Indonesians, under the
auspices of the United Nations, which established the technical principles regarding the
implementation of a process of consultation of the people on their right to self-
determination. This so-called Act of Free choice (Pepera) took place in 1969 and it was
unfair, undemocratic and highly discriminatory towards the people of Papua.

In addition to playing the role of political diplomacy in the Western Block, the United
States was also acting out of personal economic interests in order to safeguard its access
to the natural resources in West Papua, an area extremely rich in natural gas, mining
deposits, minerals, petroleum, forest products, fishery, plantations and a number of other
economic resources which proved to be very profitable for the interests of the
exploitation of foreign capital, especially for the United States, in Papua. Evidently, the
economic interest is Freeport McMoran Gold & Copper, with its basis in New Orleans,
one of the largest mining company in the United States, a company which would later
cause great problems concerning the political rights of the People of West Papua. The
political intervention of the United States and its behavior towards the Netherlands
resulted in an insignificant political support from the Dutch with regard to protecting the
right to self-determination of the people of West Papua. Also the backing by the United
States of the clique within the Indonesian army between 1965 and 1966 which facilitated
the coming to being of the New Order authoritarian militaristic regime under the
leadership of General Suharto, had as a direct result the annexation of West Papua,
turning it into a colonized area for economic purposes, as well as a killing field where
gross human rights violations were and still are perpetrated by the Indonesian army, an
area fully controlled by the United States and the economic interests of the capitalists.

It is common knowledge that the Freeport company funds the Indonesian military with
billions of rupiahs to secure the exploration area of PT. Freeport. In a report from the
New York Times entitled “The Cost of Gold, The Hidden Payroll: Below a Mountain of
Wealth, a River of Waste” (27 Dec 2005) it is clearly described how much dirty money is
received by high-ranking Indonesian military.

Over the past 32 years of control over Papua by the militaristic regime of Suharto, there
have been numerous cases of violations of human rights as a result of many Military
Operations conducted in Papua. This situation did not stop after the period of reform in
Indonesia in 1998. Regime change was not accompanied by fundamental changes to the
system in Indonesia. Evidence of continuous gross human rights violations by the
Indonesian military forces up until today can be seen, as two torture videos were
circulated on the Internet some time ago. These two films depicting scenes of torture
were published by the Asian Human Rights Commission (AHRC), based in Bangkok,
through the Youtube site. A few days later, after meetings with President Yudhoyono at
the State Palace, Co-ordinating Minister for Political, Legal and Security Affairs, Djoko
Suyanto, confirmed in front of reporters that gross acts of torture had indeed been
perpetrated by members of the military, on two civilians who were suspected of being
members of the Free Papua Movement (OPM) in the District of Puncak Jaya, Papua.
These cases of torture were committed by the Indonesian army, which has long
established ties with the American Government in the field of military cooperation.

Considering the complexity of the problems in which Papua finds itself today, where
there is no recognition of the democratic rights of the people of Papua, the Papuan
Students Alliance states its position as follows:

1. Freeport McMoRan copper and Gold in the land of Papua should be closed down
immediately and the United States should be held responsible for crimes against
humanity and against the environment in Papua.

2. We demand that the Government of the United States, the United Nations and
Indonesia be held accountable for the political conspiracy surrounding the 1969 so-called
Act of Free choice, which was in effect a miscarriage of justice and morality, an act full
of intimidation and manipulation.

3. We strongly call on the termination of the bilateral military cooperation between the
United States and Indonesia.

4. We demand that there be a thorough and comprehensive resolution of all cases of

human rights abuses.

5. We demand the withdrawal of the organic and non-organic military troops from Papua.

6. We demand the implementation of the right to self-determination or a referendum for

the nation of Papua.

We raise these issues in our statement to the American government, Indonesia, the United
Nations and all parties associated with the dark history of the Papuan people to date, so
that they may address these matters of concern in an urgent manner.

Jakarta, 9 November 2010

General Coordinator
Rinto Kogoya
Freeport obtains Indonesian approval to expand world's largest
gold mine
By Mike Head
20 February 1999

After a year-long saga, the Habibie government in Indonesia has given the US mining
company Freeport McMoRan approval to almost double production at the Grassberg
copper, silver and copper operation in West Papua (Irian Jaya). With reserves valued at
$40 billion, the Freeport project is the largest single gold deposit in the world and the
third largest open-cut copper mine.

Mines and Energy Minister Kuntoro Mangkusubroto announced the decision, which is
retrospective to the start of the year, on Monday. Some four weeks earlier, Freeport's
chief executive James Moffett held a private meeting with President B. J. Habibie to
discuss his difficulties in getting the expansion approved since ex-president Suharto
personally endorsed it last year.

Both the announcement and the tense manoeuvres that preceded it provide an insight into
the uneasy relations between the Habibie regime and the Western powers and
multinationals, in the wake of Suharto's fall. Freeport is a classic Suharto-period
development. The Louisiana-based company operates the mine in partnership with the
British and Australian mining conglomerate Rio Tinto, which holds a 12 percent stake,
and the Jakarta regime itself, which has 20 percent.

Freeport had a special place under the Suharto dictatorship. In April 1967 it became the
first foreign company granted an operating permit following the 1965-66 US-backed
coup that installed General Suharto. Former US Secretary of State Henry Kissinger is
credited with having arranged Moffett's introduction to Suharto. Today Kissinger sits on
Freeport's board, earning $500,000 a year, and Freeport also retains his law firm,
Kissinger and Associates, for a reputed $200,000 a year.

Under the Contract of Work signed in 1967, Freeport was given rights over 100,000
hectares on the traditional land of the Amaungme and Komoro people in the southern part
of West Papua. Despite strong protests, the rights of the local people were denied and
their interests were trampled on. Since then, some 2,000 villagers have been forcibly
removed to concentration camps to make way for mining, waste dumping and the
construction of townships, roads, airfields and military posts.

In return for giving the Suharto family and its associates a share in the considerable
profits generated by the mine--$208 million in 1997--Freeport obtained generous tax
concessions and virtual free reign over the tracts of land it mined, occupied and polluted.
Special units of the Indonesian military have guarded its operations.
When the mine first began in 1973, its output was limited. By 1978 it was 7,500 tonnes of
ore a day. The latest decision will allow the company to lift production to 300,000 tonnes
of ore a day from 160,000 tonnes, with further devastating consequences for the local
people and the region's environment.

Suharto reportedly approved the expansion with a handwritten note on a letter during a
private audience with Moffett in 1997. The company subsequently obtained all the
necessary formal approvals but after Suharto's resignation had difficulty in getting a final
sign-off from the key minister, Kuntoro, who faced objections within the Indonesian
ruling elite over the corrupt concessions given to Freeport and the benefits afforded to
Suharto and his associates.

Last September a report was presented to the Indonesian national assembly (DPR) by a
Commission VIII, consisting of members of the government-controlled parliament. They
urged approval of the expansion, while warning that an "explosive" situation existed in
the mining area because of the poverty of the local people and the damage done by the
mine to their hunting and farming lands. They admitted that the local peoples' welfare
had not improved, despite the earmarking of 1 percent of Freeport's revenues (about $2
billion in 1997) to a government fund for community and regional development, starting
from 1996.

The report recommended even greater military security for the expanded mine and
concluded: "Any disturbances and barriers experienced by PTFI (PT Freeport Indonesia)
can be interpreted by the world that investment in the region is unsafe, preventing
foreigners from investing in the region. This will not benefit the interests of both the
nation nor the region. As such, the existence of the PFTI must be maintained and secured,
and its benefits made use of to support the Regional Government in developing the
region."

Still no go-ahead came from Kuntoro. Moffett tried to break through the seeming impasse
last month by going back to his old style of dealings with Jakarta. He sought, and
obtained, a meeting with Habibie, who was apparently willing to oblige. Habibie signed a
letter the very same day telling his ministers to help Freeport. The Indonesian President
was not able to deliver the deal without further complication, however. Kuntoro observed
sarcastically later that everybody could meet the President but "we of course have
procedure and clear rules".

In the Freeport affair and other controversial cases, such as Caltex's bid to keep pumping
oil from central Sumatra, Kuntoro has been attempting to balance between conflicting
interests. First, he has endeavoured to appease international investors. They want secure
super-profits without having to make deals with Jakarta cronies, yet also oppose the
cancellation of previous Suharto-period contracts because of the precedents that might be
set for the abrogation of contracts in the future.

At the same time, Kuntoro faces pressure from nationalist business elements who were
excluded from the old crony relations, as well demands from regional and local power
brokers in the resource-rich provinces for a greater share of the proceeds from mining
operations. If these regional interests are not accommodated, the Indonesian capitalists
fear the emergence of secessionist groups in resource-rich areas, like those in East Timor
and Aceh, possibly seeking their own deals with transnationals.

In the end, Kuntoro declared that the Freeport expansion can proceed, but on two
conditions. The first is a doubling of the royalties paid to the government. For copper, the
new rate will be 3 - 7 percent, compared with the existing 1.5 - 3 percent, depending on
the price. For gold and silver, the increase is slightly greater--to 3 - 9 percent from 1 - 3
percent. This forms part of a plan to allocate more royalty revenue--perhaps 80 percent--
to provincial and local governments in mining areas.

The second condition is that Freeport meet certain environmental standards. This has
nothing to do with any genuine bid to halt the company's pollution, which has ravaged
the local land and rivers for 30 years. Throughout that period, the environmental
requirements have been non-existent or token. Any new rules will remain a formality,
except if they can be used as a pretext for future demands for changes to the financial
carve-up of Freeport's profits.

It is obvious that Freeport's expansion will magnify the mine's environmental impact.
Nearly all the 300,000 tonnes of ore to be crushed and processed each day will be
dumped as waste tailings in the Ajkwa River. Of the ore mined at Grassberg only about 1
percent is removed as copper metal and 0.42 parts per million as gold. Over the past three
decades, the waste residues have already choked the river, causing it to breach its banks
and flood as much as 50 square kilometres of productive land. By Freeport's estimates,
the future flooding will extend over 130 square kilometres.

The tailings have also rendered the river's water unfit to drink or use. Exposed to the
weather, the tailings leach sulphuric acid, copper, mercury and arsenic into the river
system.

In addition, the overburden from the expanded mine, the earth lying above the mineral-
bearing ore, is to be dumped into two neighbouring valleys. The ratio of overburden to
ore at Grassberg is about 3 to 1. Over the next 40 years an estimated 3 billion tonnes will
be blasted or bulldozed off Grassberg mountain, to form two giant, crumbling rockpiles,
prone to a range of risks, from leaching acid to subsidence and landslides.

Even greater are the social and health problems created by the mine. It has led to an
influx of people to work in and service the project, alongside 11,000 transmigrants from
Java and Bali, resettled by the government in nearby areas. Combined with the forcible
removal of mountain villagers to coastal areas, this has led to high rates of malaria,
cholera, tetanus and sexually-transmitted diseases.

Despite the riches being extracted by Freeport, the infant mortality rate in West Papua is
as high as 200 per 1,000; the maternal mortality rate is 4.5 per 1,000 in rural districts;
over 20 percent of the people in the central highlands suffer malnutrition; and women
have an average life expectancy of 50.3 years. Health Department records show that West
Papua's central highlands, with a population of 400,000, has only one hospital with 70
beds, and 15 health centres with a doctor.

Of Freeport's workforce of 17,300, only about 100 are from the immediate vicinity, all
unskilled. Their average wage is about 70 cents ($A) an hour. The Amaungme and
Komoro people have no access to the mine town of Tembagapura for shopping or
medical care. Freeport has built wire fences around the town, segregating the local
Papuans.

Resistance to the mine's operations, including protests and hostage-taking organised by

the Free West Papua (OPM) separatist movement, have been met with mass arrests,
torture, killings, and disappearances. More than 100 people were killed during 1994 and
1995. The military presence in the area includes an air force base, a naval base and 1,000
KOPASUS Red Beret commandos.

West Papua was effectively incorporated into Indonesia in 1962, when the Kennedy
administration in the United States backed demands by former Indonesian president
Sukarno for the Netherlands to quit its long-held colony. Indonesian rule was ratified by
an undemocratic, UN-orchestrated "Act of Free Choice" in 1969. Today, the Indonesian
capitalist class is desperately clinging to its control over the territory, with the Freeport
mine its central preoccupation.