JAKARTA, KOMPAS – Indigenous communities holding customary land rights in PT Freeport Indonesia's operational area in Mimika Regency, Papua, want to be involved in the negotiation process. They also want ownership rights to the shares of the US-based mining company. So far, Freeport has stated its readiness to sell up to 51 percent of its shares to Indonesia.
“"We welcome Freeport's willingness to divest up to 51 percent of its shares to Indonesia. We want indigenous communities in the Freeport mining area to have ownership rights in the share divestment," said Odizeus Beanal, Chairman of the Amungme Tribal Consultative Council (Lemasa), on Monday (September 4), after meeting with Energy and Mineral Resources Minister Ignasius Jonan in Jakarta. According to Odizeus, indigenous communities in Mimika have never been involved in the work contract agreement between PT Freeport Indonesia and the Indonesian government.
Therefore, his party wants to be directly involved in the negotiations. "So far, we have only received corporate social responsibility (CSR) funds, which are actually the company's obligation," Odizeus said. Regarding the size of the shares, Odizeus continued, this will be discussed further with the government. Likewise, the mechanism, whether indigenous communities will receive them for free or must purchase them, is still under discussion. The amount of CSR funds received by indigenous communities, he said, ranges from IDR 500 billion to IDR 1 trillion annually, in the form of health facilities and services, education, and local economic development.
Separately, Iqbal Damanik, a divestment policy researcher at Article 33, a research institute for social change, said that in a number of share divestment cases in Indonesia, local governments, which also have the right to purchase shares, are suspected of lacking sufficient funds. A free share scheme could be a solution. "According to calculations, divestment costs are sometimes not cheap. The problem is that the central government, local governments, state-owned enterprises (BUMN), and regional-owned enterprises (BUMD) do not have sufficient funds to purchase shares. If the funds are obtained through debt, the dividends received (if any) are sometimes used to pay off debt installments," Iqbal said.
Currently, the Indonesian government holds only 9.36 percent of its shares for the 50th year of Freeport's operations in Indonesia. Under existing regulations, Freeport is required to sell its shares to Indonesian participants, with no less than 51 percent.
We welcome Freeport's willingness to release up to 51 percent of its shares to Indonesia. Ignasius Jonan
https://www.pressreader.com/indonesia/kompas/20170905/281908773291223
