Resource-rich West Papua, but who benefits?

Indonesia is these days praised as a success story among the countries of Southeast Asia, with growth figures that compare favorably with its neighbors and an absence of conflict.

It is also the largest country in the region which enjoys an abundance of natural resources that have lured foreign companies to its shores.
Since the fall of Soeharto in 1998 and the end of his dictatorship, economic progress has fostered a growing middle class.

A referendum in East Timor 18 months after his exit secured that country’s independence after 25 years of devastating occupation, while in the other conflict-ridden province, Aceh, where thousands of people died from 1976 till 2004, a peace agreement has secured it an era of reconstruction, thanks largely to the devastating tsunami in December 2004 and to the agreement reached a year later between the Free Aceh Movement (GAM), and Jakarta.



However, the situation in its most easterly region, West Papua, is far from satisfactory and rarely draws international attention except when shooting incidents take the lives of foreigners employed by a mining company which is recognized as being Jakarta’s largest taxpayer.

While the media regularly reports on the huge remittances paid to Jakarta by Freeport, little else seeps out from this vast territory, access to which is largely denied to foreign journalists and NGOs.

Yet this is a territory where poverty is widespread, where AIDS is growing at an alarming rate, where the mortality rate among mothers and babies is the highest in the country and where many schools are empty much of the time because teachers lack basic living conditions and many children are too poor to travel long distances to school or purchase the books they need.

During the Sukarno era, the country rejected foreign investment but when Soeharto took power following massacres that spread across the country, laws governing foreign investment were largely absent yet geologists already knew about West Papua’s rich natural resources including the world’s largest gold
reserves and its huge reserves of copper.

It was in West Papua that Indonesia signed its first contract with a foreign multinational corporation, regardless of the fact that at the time, Indonesia did not have sovereignty over the territory.

It was not until August 1969 that the highly contentious “Act of Free Choice” resulted in the United Nations “taking note” of the Act in which just over one thousand tribal chieftains, under heavy duress from the military, took part, and removing the territory from its decolonization mechanisms.

As Denise Leith says in her analysis of Freeport’s presence in Indonesia, it was in April 1967 that “the unique and highly favorable first-generation contract written by Freeport was signed, making Freeport the first foreign company to sign with the new government and the only one to sign under such extraordinary circumstances”.

Among the many extraordinary aspects of the first contract of work which have persisted in the subsequent contract of work agreed in 1991, there were no Indonesian equity requirements, few controls over the use of foreign personnel and it did not hold the company under any obligation to the traditional Papuan owners of the land, the Amungme and Komoro peoples, who were excluded from the consultations, nor was the company required to pay compensation to the traditional land owners.

Moreover there were no environmental restrictions imposed on the mine’s operations.
Tribal people have filed several lawsuits against the company over the years in US and Indonesian courts dealing with issues such as illegal land acquisition, human rights violations and environmental damage, but without success.

The most recent attempt was in May last year, when the Amungme people filed a lawsuit against the company and the Indonesian Department of Energy and Mineral Resources for US$32.5 billion for the illegal acquisition of their land.

It argued that the land was forcibly acquired without the approval of its owners and that the traditional owners of the land have not received a fair share of the wealth generated by the copper-and-gold mine.

After filing the lawsuit, they felt they needed protection from the National Human Rights Commission, Komnas HAM.

Their lawyer, Titus Natkime, told the commission that his clients were receiving menacing phone calls, accusing them of breaking the law and alleging that they were members of the OPM (Free Papua Movement) which, as everyone knows, could mean facing the charge of treason (makar).

When the commission sought to investigate several shootings in July last year along the road leading to the Freeport mine in order to follow proceedings against seven local people who had been named as suspects, commission member Nur Kolis complained about the difficulty of access to the mining site. It created the impression, he said, that Freeport was “like a state within a state”.

On that occasion, the company’s vice-president for legal affairs, Tony Wenas confirmed that some locations within the site were “off-limits” to outsiders.

According to Nur Kolis, “the position of the local community in Mimika is very weak and they must accept every decision by the company which could trigger problems”.
Amazing as it may seem, Indonesia’s official human rights organization had been prevented from gaining access to the area to conduct field observations.

There have been numerous complaints ever since mining operations first began in the 1970s of the damaging impact on the local river system from the deposits of tailings from the mine

This is a company which is the largest taxpayer to the Indonesian state. In 2009, the company paid the Indonesian state no less the $1.4 billion in taxes, royalties and dividends (the latter for a government stake in the company), an increase over the previous year’s remittances of $1.2 billion.

All told, from 1992 till 2009, the company paid $9.3 billion to Jakarta. This alone reveals the enormity of the profits earned by the company from the copper and gold it mines and sells each year.

As for the Papuan people, their economic circumstances can only be described as dire. At a recent symposium in Jakarta, one contributor said: “Papuan people are still weighed down by poverty in a land that produces plenty of foreign currency for the national revenue.”

How much longer must Papuans suffer such appalling living standards in a homeland that produces such huge profits for a foreign company exploiting their natural resources?

While the media regularly reports on the huge remittances paid to Jakarta by Freeport, little else seeps out from this vast territory.


Carmel Budiardjo co-founder of Tapol and a human rights campaigner.