Freeport head office in Phoenix, Arizona, USA - Supplied

Freeport Owes Ten Trillion in Debt to Papua Government

Freeport head office in Phoenix, Arizona, USA - Supplied

Freeport head office in Phoenix, Arizona, USA – Supplied

Denpasar, Jubi – Head of Papua Energy and Mineral Resource Office Bangun Manurung said PT. Freeport Indonesia has failed to pay the water surface tax amouting to about Rp 10 trillion.

He said Freeport should have paid for the use of water surface since the signing of its second contract of work in 1991 to present.

“What we asked is clear; it is very confirmed and clear. We are optimistic that the Tax Court would agree with us and could see this clearly. In my opinion the government’s credibility is tested,” he said after attending the meeting with the Special Committee on Freeport Issue of Papua Legislative Council that held in Nusa Dua-Kuta, Bali on last week.

According to him, Freeport’s annual obligation to the local government is Rp 400 billion. If this amount was counted since 1991, the total amount would reach more than Rp 10 trillion,


“It should be Rp 10 trillion, but based on the tax legislation, it’s only counted for the last five years. So, it would approximately Rp 2.7 trillion. I am not sure whether our claim since 1991 would be counted or not. Well, about the legal aspect we don’t know. But we prepared all technical materials,” he said on Wednesday (25/5/2016).

Though he had no idea about why Freeport filed a legal notice against Papua Provincial Government related to tax payment, he thought it is an obligation for Freeport to pay the water surface tax.

“If not, we have not considered yet for further solution. Regarding to the committee’s advise to Papua Provincial Government to present an expert, it’s a good idea. We will see the progress in the court. It’s very good to strengthen the bargain position of Papua Provincial Government whether it is related to the contract of work or regional regulation,” he said.

Meanwhile the First Deputy Chairman of Papua Legislative Council Edoardus Kaize said Freeport’s legal notice against Papua Provincial Government was not make sense, because it was filed when Papua Provincial Government demanded its rights.

“Freeport should have a good ethics. It’s ridiculous if it filed a charge against the government. This company gets a permit from the government to conduct the mining operation in the territory of the Republic of Indonesia, in particular Papua. Because of it did not run its obligation properly or did not want to pay its debts, then filed the legal notice against the government,” said Kaize.

According to him, instead of filing a charge, Freeport should fulfill its obligation by paying its debts of more than Rp 2.7 trillion to Papua Provincial Government.

“What it should pay is not for debts from decades. It is only for certain period. Freeport should not make it a problem to file a charge against the government,” he said. (Arjuna Pademme/rom)

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