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Freeport divestment through IPO only benefits wealthy businessmen

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Freeport’s underground mine. – Dok. PTFI

Jayapura, Jubi – A statement by the former Indonesian Minister of Energy and Mineral Resources Sudirman Said to suggest IPO mechanism to be used in divestment scheme of PT Freeport Indonesia (PTFI) is not right conduct.

A researcher from Alpha Research Database and author of ‘Freeport: Bisnis Orang Kuat Vs Kedaulatan Negara’ Ferdy Hasiman said IPO mechanism has never recommended by Law No.4/2009 on Mineral and Coal.

“If Freeport shares released through IPO mechanism in the capital market, it can only benefit rich businessmen, while the capital market players are only 0.6% of the Indonesian population. And also, many investors who buy shares in the capital market are foreign investors. That’s why if a crisis hits Indonesia, there might be a massive capital outflow,” said Ferdy.

Furthermore, he continued that through IPO mechanism, Freeport shares would be a target of local wealthy businessmen and politicians. For instance, he said, the release of Garuda Indonesia shares. In this case, former Treasurer of Democrat Party M. Nazarudin bought 400 million shares or equal with IDR 300 billion through his five companies, while a prominent businessman bought 351.6 million shares (10% of GIA shares) after gaining a loan from Credit Suisse.

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“This fact showed that the divestment option through IPO for PTFI is not a smart solution, but an instant one,” said Ferdy.

Moreover, when he was a minister, Sudirman Said seemed not able to provide a better solution compared to his predecessors in divesting mine shares. Therefore, Freeport IPO would be a mining landfill of some politicians and business groups for corruption and collusion practices. Besides this, Sudirman also responded to the contract extension and the construction of smelter.

Regarding Freeport’s contract extension to 2041, this is a business decision. Without this, Freeport would not invest in the underground mine which valued up to US$17 billion and the construction of smelter would not be started.

“So, the political reasoning would never able to understand why the government should extend the contract until 2041. The corporate mechanism taken by the government to take over Freeport shares is the most elegant move” said Ferdy.

“Sudirman might try asking the investors who want to build a copper smelter of US$2.3 billion values if their permit is not going to extend? How could they think reversely: build the smelter then extend the contract later. No wonder if negotiation related to its divestment with Freeport were not working,” explained Ferdy.

The Government of Indonesia through its holding company Inalum now officially holds 51.23% of Freeport shares at the end of the last year. The government then issued a Special Mining Business License (IUPK) with some notes that the Freeport’s contract would extend up to 2041, it’s obliged to build a copper smelter and the government guarantee the certainty of fiscal and investment for Freeport.

The government’s decision to extend the contract until 2041 might consider right because Inalum still requires Freeport to manage the high-tech and sophisticated infrastructure of the underground mine. The block caving method used in Grasberg’s underground mine for some mining geologists is indeed high risk and require considerable investment funds.

Many world-class geologists even said that the underground mine operation in Grasberg could not stop. If it does, it might raise the ground voltage that possibly causes the tunnel to collapse. That’s why Freeport has to build thousands of kilometres underground tunnels. If the underground mine not operates, it might cause a massive loss of up to US$5-10 billion. (NAD)

Reporter: Victor Mambor

Editor: Pipit Maizier

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Illegal gold mining in Jayapura has been happening since 2001

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Police arrested 17 people related to illegal mining in Buper, Waena, Jayapura City. – Jubi/Courtesy

Jayapura, Jubi – Jayapura Municipal Police arrested 17 people who allegedly were involved in illegal gold mining in Bumi Perkemahan (Buper) Waena, Jayapura City on Friday, 26 June 2020.

“These seventeen people are operators of heavy equipment and worker coordinators. There are about 70 people involved in this business,” Jayapura Municipal Police Chief Gustav Urbinas told reporters on Friday (26/6/2020).

In their operation, the Police also seized two units of construction equipment, six excavators, liquid mercury and eleven jerrycans of diesel fuel.

Police Chief Urbinas said he received a report on this illegal activity two months ago, but at that time he could not arrest those who were involved because they escaped the mining site.

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Illegal miners have carried out their activity in Buper, Waena, since 2001 because this sector was promising to generate income.

Four years ago, a gold miner Frans told suara.com about his experience regarding this illegal activity. He said people only need simple equipment such as a hoe, pan, and sifter for doing this activity. He further explained that all panning processes were traditional, starting from finding rocks, crushing it and putting the grinds in the pan. After mixing with water, the grids would look like porridge, and through the panning process, we can see gold flakes. However, to get gold containing rocks was not simple. People should dig at least three meters depth under the ground.

“But not all rocks we met contained gold. We would find out about the weight and type of gold after mixing it into liquid mercury,” he told suara.com.

Considering this, the income of gold miners was uncertain. If they were lucky, he and his friends could get 20 to 100 grams of 24 carats which could trade at Rp 400 thousand per gram.

“It’s all depending on the current gold price. It fluctuated following the increase in the oil price. But its price now is Rp 400 thousand,” he said.

Ten years ago, the Jayapura Municipal Government had attempted to stop the illegal mining in Buper that has been happening since 2001. But, the Ondofolo (Tribal Chief) of Kampung Babrongko Waena, Ramses Wally, disagreed with the city government.

At that time, Ramses said if the city government banned this panning activity, they should provide job opportunities to those illegal gold miners. (*)

 

Reporter: Victor Mambor

Editor: Pipit Maizier

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The way Papuansphoto Community calls to protect Cycloop

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A performance held in the environmental action by Papuansphoto Community on Saturday (8/2/2020). – Jubi/Dok. Whens Tebay

Jayapura, Jubi – Papuan youth from Papuansphoto Community held an environmental action to protect the buffer zone of the Cycloop mountains where precisely located at the rectorate of the University of Cenderawasih.
Around 50 participants joined in the event held on Saturday (8/2/2020) in Waena, Heram Sub-district, Jayapura City. They planted trees and took photos of the natural surroundings.

The Papuansphoto General Chairman Whens Tebay told Jubi on Sunday (9/2/2020) that this action was to demonstrate their concern for the Cycloop area.

“Our concept of photography is to save the forest and humans. So, it was two activities in one event. We planted 50 various tree seedlings,” said Tebay.

The various tree seedlings which brought from the Papua Provincial Forestry Office are the banyan, pine, acacia and weki.

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“This is the first event in 2020. There would be more events such as training or workshop on photography to be held in Jayapura,” he said.

Furthermore, Tebay who obtained his bachelor degree from the International Relations of Science and Technology University of Jayapura (USTJ) warned the city and suburb residents of Jayapura to protect their environment, especially Cycloop Mountains as a water source for dwellers living in both areas.

Earlier, Tebay said Papuansphoto had conducted a similar project titled “Save Water, Forest and the Land” on 1 February 2019. At that time, the community worked with native Papuans and Elenggen Art studio.

In the meantime, Gamel from Rumah Bakau Community thinks the concept of event held by Papuansphoto was creatively interesting because they were not only planting trees but turning such activity to be the artwork of photography.

According to him, for those who do not really like reading, have little interest in literacy, the photography at least can bring the actual pictures contained environmental messages.

“While our community has started the environmental action since 1 January 2020 by collecting rubbish leftover from the New Year’s Eve and run some ‘goes-to-school’ events related to environmental issues. The motivation of young people must always be maintained and never stop to try,” he said.

Jayapura City is located in the Cycloop mountainous area and often hit by floods and landslides during the rainy season. It is also said the water flow rate in the Cycloop buffer zone continuously declined.

While, on the other hand, waste and rubbish scatter everywhere and deforestation by irresponsible people has been continuously happening. As a result, the water surface at Kampwolker River, for example, has gradually dropped.

Meanwhile, a Waena resident Yustinus said locals recently are struggling to get water due lacking water supplies from Water Service Company (PDAM).

In Perumnas 2 (Waena), PDAM water supplies not operated for three days. Residents must buy some water at the nearest water depot for daily consumption, such as for washing and cooking.

“In the past, water from PDAM was available for 24 hours. Now, it changes drastically,” he said. Therefore, he asks everyone to protect the Cycloop area as the water source area. (*)

 

Reporter: Timoteus Marten

Editor: Pipit Maizier

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Raja Ampat Government accused to violate tenure rights over two years of land occupation

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A rally held by the community of AMAN (the Indigenous Peoples’ Alliance of the Archipelago) in Raja Ampat Regional House of Representative. – Jubi/SPC

Sentani, Jubi – The landowner of 3 hectares of the customary land asks the local government of Raja Ampat to return the land and pay the rent for two-years occupation.

The local government was permitted to use the land for two years, from 2004 to 2006, based on the mutual agreement. However, when the landowner asked the local government to return it and pay the rent, it found out the land was registered as an asset of the local government since 2007.

Following the land dispute, the customary people then brought the case to court. Here the statement declared by their legal counsel Haris Azhar from Lokataru, the Law and Human Rights Office to Jubi via WhatsApp on Tuesday (4/2/2020).

“The Local Government of Raja Ampat deprived the tenure land rights of indigenous Raja Ampat arbitrary. Therefore, Lokataru, the Law and Human Rights Office, as their legal counsel, condemns the land occupation by the local government over the tenure land owned by Hj. Salim family. The land is located in Waisai, Raja Ampat Regency. We found some facts showing the practice of deprivation over this land,” said Haris Azhar.

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First, the regional government of Raja Ampat has occupied the land borrowed from the customary landowner for more than two years. It violated the two years agreement, namely from 2004 to 2006. The local government never returned the land to the customary landowner until today.

Second, the Raja Ampat government deprived the land by proposing the Land-use certificate to the National Land Agency (BPN) of Raja Ampat which issued in 2007 and 2008.

“The local government of Raja Ampat have done it secretly without any permission and consent from the customary landowner on the transfer of the customary tenure land. The government’s action is violating the Government’s Regulation No. 24 of 1997 on the Land Registration,” he explained.

Third, the Raja Ampat government has vowed to provide compensation on the land in the hearing on the Regional Budget Revision of Raja Ampat on 20 September 2018. The compensation has been budgeting in the revision 2018. However, the Government of Raja Ampat has never paid compensation to the customary landowner.

Therefore, the government has broken its promise or conduct a fraud towards the customary landowner.
Four, the customary landowner has taken some persuasive actions and demonstrated their goodwill by visiting the government’s office and asking the Raja Ampat Regent for a dialogue on this issue. However, the local government was not willing to show their goodwill such as not giving any confirmation or explanation on the reason why they did not pay any compensation over the land.

“Based on these mentioned facts, we urged the Government of Raja Ampat, in this case, represented by the Raja Ampat Regent, to respect the law and pay attention to the rights of the customary people whose land deprived arbitrarily by the local government. Secondly, the local government of Raja Ampat, in this case, represented by the regent, to immediately solve the dispute by installing the agreed payments to Hj. Salim’s family as approved in the Regional Budget Revision Meeting of Raja Ampat in 2018,” said Azhar.

Meanwhile, Musa, a member of Hj. Salim’s family said as the customary landowner, he hopes the local government of Raja Ampat shows its goodwill to solve this issue as possible as it could.

“In the mutual agreement, the government only borrowed our land. But now they (the local government) had claimed to have a certificate on the land which issued since 2007,” said Musa by phone in Sentani, Thursday (6/2/2020). (*)

 

Reporter: Engelbert Wally

Editor: Pipit Maizier

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