MULT IN A T I ON A L

CO R P O RA T I ON
AY Y U N Q A LB I - 0 16 2 019 00032
ABDI H
BR M U N TH E - 01 62 0 19 00004
ARTA SALESTA
A M EI LA N IA - 0 16 2 019 0 0084
JESSICA RIVEN
C A R VA LH O - 0 16 20 19 0 020 7
JULIANO DICKY DE
K A R TI K A – 0 162 0 19 00 0 77
KEZIA
 HOW PT. FREEPORT INDONESIA EVOLVED OR
DEVELOPED INTO AN MNC
The Freeport Indonesia Company is a multinational company under Freeport-McMoran Inc. before being
transferred by the government to the Indonesian Asahan Aluminum Company.
During President Sukarno's administration, he refused all kinds of foreign investment in Indonesia
because he considered it a new strategy by the capitalists. However, during the Soeharto era, he allowed
foreign investment in Indonesia, which at the time made Indonesia give a contract to the Freeport Company
for 30 years on April 7, 1967 and from the Freeport operational period in 1973. In 1991, PT.Freeport
Indonesia re-establishing a contract of work II with the government that is valid for 30 years in 2021 and the
possibility of extension for 2 x 10 years until 2041.
So, to develop a company into a multinational company, the company must have several branches in
another country and be able to invest shares in that country. With that, the company will develop into a
multinational company.
 PT FREEPORT INDONESIA ADVANTAGES
Quoted from Ministry of Finance Indonesia, before Indonesia signed the Head of Agreement (HoA) with
Freeport-McMoRan Inc., Indonesia only had 9.36% shares in the ownership of the freeport. But now,
Indonesia already has a 51.23% shares through PT Indonesia Asahan Aluminum. PT Indonesia Asahan
Aluminum itself is a company under Badan Usaha Milik negara (BUMN).

PT. Freeport itself is derived from the

profit of mining management in Papua.
And this is a statistical data estimate of the
profit of PT. Freeport Indonesia under
PT. Indonesia Asahan Aluminum.
IMPACT PT FREEPORT INDONESIA TOWARD
INDONESIA
• Economics Field

1) PT Freeport Indonesia's contribution to Indonesia from taxes, royalties, export taxes, dividends and other
levies amounted to US $ 756 million in 2017, and became one of the largest taxpayers in Indonesia.
2) For the acquisition, PT Indonesia Asahan Aluminum reached US $ 3.85 billion or Rp 56 T. These costs
will be covered by PTFI's net profit, which on average could reach US $ 2 billion per year after 2022.
3) Based on the analysis of CNBC Indonesia's research team, with the agreement above, Indonesia finally
has control over proven and estimated reserves in the PTFI field which are roughly worth Rp 2,400 trillion,
consisting of 38.6 billion pounds of copper, 33.8 million ounces of gold, and 156.2 million ounces of silver
IMPACT PT FREEPORT INDONESIA TOWARD
INDONESIA
• Environment Field

The negative impact of mining PT. Freeport itself is a large-scale environmental damage. Based on a
2002 LANDSAT TM image analysis conducted by the WALHI team, Freeport's tailings were spread over
more than 35,000 ha in the Ajkwa watershed. Mining waste is still spread over 85,000 hectares in the estuary
area, which if added together is equivalent to Jabodetabek. This has caused people living around the mine to
experience a clean water crisis and also a continuing health crisis. At present, the government is still trying
to investigate environmental violations committed by PT Freeport Indonesia.
IMPACT PT FREEPORT INDONESIA TOWARD
INDONESIA
• Social Field

1) PT Freeport Indonesia has the capacity to provide 29 thousand jobs. The number of employees directly
recruited is 7,028 and around 2,888 are Papuans.
2) Of the participating shares owned by RI in Freeport, 10% will be owned by the local / Papua government.
This aims to improve the welfare of the Papua society.
3) The presence of Freeport also leaves the issue of human rights violations related to the actions of
Indonesian security forces in the past. But now, the Indonesian government is still trying to resolve the human
rights case in Papua.
IMPACT PT FREEPORT INDONESIA TOWARD
INDONESIA

• Politics Field

For Indonesian politics itself, Freeport has always been an issue of problems plus even more because of its
location in Papua. Since the days of Liberal Democracy in Indonesia, the quality of government has always
been seen from how the current government resolved the problem. This can be proven by the replacement of
several cabinet during the Soekarno government because it cannot overcome the Irian problem. Until now, the
Freeport and Papua cases are still an issue in politics in Indonesia.