Jubilee Australia accuses Bougainville over ‘reckless land grab’ law changes

Panguna mine in operation … back in its heyday around 1971. Image: Robert Owen Winkler/Wikimedia Commons/PNG Mine Watch

Pacific Media Centre Newsdesk

The Autonomous Bougainville Government, led by president Dr John Momis, has been accused by a research and advocacy group of allowing a “reckless land grab” with its planned mining law changes.

The proposed amendments to the 2015 Bougainville Mining Act, along with accompanying legislation, will give the ABG the power to hand over mining leases to all parts of the island not under existing leases to Bougainville Advanced Mining, a new entity created for this purpose.

The ABG would have 60 percent ownership of Bougainville Advanced Mining, while 40 percent would be owned by a foreign partner.

READ MORE: Bougainville’s mining deal meets widespread opposition

Statements made President Momis last week suggested that Caballus mining, a Perth-based company headed by Jeff McGlinn, would be the foreign partner involved, said Jubilee Australia.

“These are radical changes and appear to be nothing more than a reckless land grab,” Jubilee Australia’s executive director Dr Luke Fletcher said in a statement.

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“First, this would hand over control of the majority of the island to the President and his foreign partner, Mr McGlinn.

“Second, the president would have the power to unilaterally distribute leases without any consultation or permission from landowners.

‘Cut out of process’
“As a result, landowners will be cut out of the process. These amendments undermine the principal of free, prior and informed consent,” said Dr Fletcher.

“Doing so is both anathema to Melanesian culture and vitally important in the Bougainville context.

“It is not clear to us that this legislation is even constitutional,” said Dr Fletcher.

“It is a startling and dangerous move. Given the disastrous history of the Panguna mine in Bougainville, which has caused irreparable environmental damage to the Jaba river and was the major cause of the Pacific region’s worst ever civil war, forcing through such enormous changes with very little consultation is a reckless and desperate ploy.”

President Momis told Radio New Zealand the move was justified to enable the Bougainville independence referendum taking place.

“The people of Bougainville are determined to have the referendum and they must find the money to fund the referendum,” the President reportedly.

“One way of doing it would be if we started our own company and generated the revenue to enable us to conduct the referendum. We cannot sit on our hands.

Dubious over plans
However, Dr Flectcher said: “As our recent study of the question demonstrates, we are highly dubious that mines like Panguna could ever raise enough revenue to satisfy both foreign investors and the people of Bougainville,’ said Dr Fletcher.

“It is certainly impossible that the mine will raise any revenue before the independence vote.

“It will take years for the building/repair of infrastructure, the completion of environmental studies and other importance processes that need to take place before the mine can generate revenue.”

The Panguna mine was one of the world’s biggest copper-gold mines until a 10-year civil war forced its closure in 1989.

The war cost up to 20,000 lives and displaced 10,000 people. The Panguna mine was a leading cause of the war and communities have not been offered redress for the damage.

Since 2009, there has been a push to re-open the mine, with proponents claiming that Bougainville needs the mine to be economically independent.

President Momis has been at the forefront of this fight, under the auspices of former operator Bougainville Copper Limited (BCL), claiming that it would be the best and quickest option to generate revenue.

In December 2017, however, the president announced a moratorium of mining at Panguna and revoked BCL’s mining licence, after a meeting of landowner meetings voted against such an extension.

Article by AsiaPacificReport.nz

MIL OSI – Source: Evening Report Arts and Media

Killings, arrests as military ‘flush out’ Mindanao environmental defenders

An international non-government organisation, The Global Witness, has reported that 48 individuals were killed in the country last year, a majority related to agribusiness. Image: Philstar

By KEN E. CAGULA in Davao City

The massive human rights violations committed against indigenous peoples or Lumads and peasants are designed to silence the opposition to the continuing operations of large-scale mining and plantations in Northern Mindanao and the rest of Caraga Region.

This was the assessment made by the environmental group Kalikasan People’s Network for the Environment or Kalikasan PNE.

“The military is trying to flush out the opposition to mining and plantation interests in Northern Mindanao and Caraga region,” said Kalikasan PNE coordinator Leon Dulce.

READ MORE: Philippines had highest number of killed environmental defenders in Asia

Dulce points out that these Lumad and peasant leaders are the environmental defenders that continue to stand and oppose the large-scale mining and plantation operations in areas of Mindanao.

At present, these environmental defenders are protecting around 243,163 ha of forest and agricultural lands within their ancestral domains and farmlands against the encroachment of these extractive and destructive projects in Northern Mindanao and Caraga Region, he said.

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Hundreds of Lumad residents from Sitio Manluy-a, Panukmoan, and Decoy in Barangay Diatagon, Lianga town in Surigao del Sur fled from their homes after the Armed Forces of the Philippines (AFP) conducted a series of artillery bombardment and harassments last month.

On January 24, two Manobo farmers identified as Randel Gallego and Emel Tejero, all residents of Km. 16, Brgy. Diatagon went missing after they were allegedly fired upon by soldiers while hauling abaca products.

Dead farmers
The families of the two farmers found their dead bodies at a military detachment six days after they were reported missing.

The 401st Infantry Brigade of the Philippine Army claimed that Gallego and Tejero were killed in a clash between soldiers and the New People’s Army (NPA) rebels.

But human rights advocates belied the military’s claim, saying that the two were unarmed civilians.

“The Lumad communities in Lianga are standing firmly against the coal and gold mining exploration and development projects attempting to grab lands and resources from their ancestral lands ensconced within the Andap River Valley Complex. For this, they are constantly being attacked by the military,” Dulce said.

These areas in Surigao del Sur are one of the largely militarised areas in Caraga region, prompting the exodus of IPs out from their lands due to the continuing presence of soldiers and paramilitary groups in their communities.

Kalikasan PNE also slammed the “illegal arrest” of Datu Jomorito Goaynon, chairperson of the Kalumbay Regional Lumad Organisation and Ireneo Udarbe, chair of Kilusang Magbubukid ng Pilipinas in Northern Mindanao Region on January 28.

The police named the two leaders as “top NPA leaders” which Kalikasan PNE said is a “repeated accusation” to justify the illegal arrest.

“Goaynon and Udarbe are stalwarts of the struggles of indigenous people and peasants against agri-industrial plantations in Northern Mindanao. They have also effectively exposed military-affiliated indigenous paramilitary groups such as the New Indigenous People’s Army Reform who have been attacking Lumad lands to pave the way for mining deals,” Dulce said.

Martial law
With the continued declaration of martial rule, Kalikasan PNE said that attacks against environmental defenders continue to worsen.

At least 28 cases of environmental-related killings in Mindanao were recorded by the group since it was first declared by President Rodrigo Duterte in May 23, 2017.

They noted the “growing trend” of killed defenders vilified as members or supporters of the NPA

“The Duterte government is trying to depict our fellow environmental defenders as rebels or terrorists to justify the militarization of their bastions of natural wealth. We demand that Goaynon and Udarbe be freed and that military troops wreaking havoc in Lianga be withdrawn as soon as possible.

“Justice for the murdered defenders must be delivered and the bloody reign of Duterte’s martial law over Mindanao must be lifted immediately,” Dulce said.

Article by AsiaPacificReport.nz

MIL OSI – Source: Evening Report Arts and Media

Miriori fires broadside at ‘rogue’ Bougainville mining rights bid

Destruction in the Arawa Hospital during the 1980s Bougainville civil war, sparked by a mining and environment dispute. Image: PNG Mine Watch

Pacific Media Centre Newsdesk

A highly controversial proposal by an unknown and newly registered company, Caballus Mining, is attempting to grab a monopoly over all large scale mines in Bougainville, reports PNG Mine Watch.

It is alleged that the Caballus plan is to override the fundamental principle of the Bougainville Mining Act – Customary Landowner ownership of the minerals in Bougainville and confer ownership on a McGlinn entity, Bougainville Advance Mining (BAM).

“Are Caballus the next rogue that is trying to take advantage of us, the customary owners and steal our minerals?” asked Philip Miriori, chairman of the Special Mining Lease Osikaiyang Landowners Association (SMLOLA).

READ MORE: Bougainville mining plan faces outrage

Miriori claimed Caballus had no relevant mine development experience.

“Caballus has no assets, and yet is demanding a monopoly on all major large scale mining projects in Bougainville.

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“They are demanding an initial 40 percent interest, which will increase further over time, without any upfront cash and only a shallow promise of future money if he is granted those rights first.”

Miriori said that when Caballus was presented to representatives of SMLOLA earlier last year, they were officially rejected in writing.

Clear position
“This is where it gets confusing as despite that clear position from the owners of the minerals at Panguna, Caballus is now demanding that the most fundamental principle of the Bougainville Mining Act (BMA) – customary ownership will now be stripped from the BMA.”

SMLOLA special adviser Lawrence Daveona said that by avoiding all the protection afforded to them under the BMA, which is fundamental to the Peace Agreement and the Bougainville constitution – “in fact the very grant of autonomy”, they would be stripped of their rights.

“The central tenant of our Peace Agreement is good governance.

“We will fight this to the end and hope our ABG will step in first and protect all customary owners in Bougainville.”

Miriori said it appeared some people were trying to take advantage of a severe funding crisis which their government faced in the lead up to the referendum on Bougainville this year. They were promising money but only if they were first given the keys to every large scale mine in Bougainville with zero up-front investment – “unbelievable”.

“Whoever puts up the money will ultimately control BAM, and all of Bougainville’s mines.”

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MIL OSI – Source: Evening Report Arts and Media

Bougainville voters need to present unified front, says Momis

Bougainville President John Momis … need to be united. Image: Ramumine

Pacific Media Centre Newsdesk

The people of Bougainville should present a unified front at the dawn of the referendum to secure a viable option of self-determination, says Autonomous Bougainville Government President Dr John Momis.

If Bougainville can secure more than 90 percent of the popular vote next year, it would have the bargaining power to negotiate with the Port Moresby national government, he added, reports The National.

“After the referendum vote, we will still have to negotiate with the national government before the referendum result is ratified by parliament,” Dr Momis said.

“Securing a majority vote on one option of the referendum question secures support from the international community and it proves to the national government that this is what our people have chosen as the new path for our future.

“Apart from presenting a unified front, it is imperative that we implement the Bougainville Peace Agreement.

“It does not matter if the government is failing to honour the peace agreement, we must continue to strive to implement it so that when it comes to the ratification of the outcome of the referendum, we can proudly say that we implemented it in its entirety.”

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Dr Momis said it was the moral and legal obligation of the Bougainville government to honour the peace agreement despite capacity constraints which had hampered the full implementation of the autonomous arrangements on Bougainville.

He urged factions who have been causing problems for the government to end their dissension.

“We must realise that we stand on the threshold of a definitive period in our history yet we continue to be diametrically opposed to the government and the rule of law,” Dr Momis added.

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Ex-Bougainville VP blasts Canberra’s ‘top down’ interference in referendum

Bougainville MP Joseph Watawi … “Australians attempting to hijack our political system.” Image: Twitter

Pacific Media Centre Newsdesk

A former Bougainville regional vice-president has condemned Australia for political interference over the independence referendum process, saying Canberra would be better served dumping their diplomatic and aid corps in favour of “a drunk rugby team”.

Bougainville is preparing for a referendum on independence to be held on June 15 next year.

Joseph Watawi, Bougainville Member for Selau and former vice-president of the Autonomous Bougainville Government (ABG), Joseph Watawi has accused Canberra of “tokenistic efforts” and contrasted Australia with New Zealand’s “trusted and respected” role because of its cultural awareness.

Watawi is chair of Bougainville’s parliamentary select committee responsible for the referendum preparation, weapons disposal, peace and unification.

“Without consultation, the Australian government has sent ‘advisers’ to all of our political offices while making only tokenistic efforts to actually help the people here,” he said in a statement.

“Let us not be naive, Australian aid is not about helping people but about gaining political power and influence. The problem is that in Melanesian cultures the only way for outsiders like Australians to gain political power and influence is to actually start at the grassroots and help people and communities.”

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Watawi said the “top down approach” of the Australians in “attempting to hijack our political system merely confirms the suspicions of many Bougainville people that the Australian programme is one of spying and jockeying for position over our natural resources in the lead up to next year’s independence referendum”.

Real task
The real task facing the Australian government and their representativeness was to deal with Australia’s legacy issues.

“It was the Australian-owned mine at Panguna that started the Bougainville war that led to the deaths of at least 10,000 Bougainvilleans and it was Australian helicopters and pilots who contributed to that death toll [by] shooting people from the air and burning villages,” Watawi said.

“Australia [had] also contributed to the naval blockade of southern Bougainville, stopping essential food and medical supplies from reaching civilians in the conflict area.

“In the past 10 years we Bougainvilleans have put a lot of work into the reconciliation process among our various factions and language groups. Australia, as one of the key causes of the war, has been noticeably absent from this process.

“If you go to the Panguna [mine] pit today and ask the women who are the traditional landowners there they will tell you that in the life the wealthiest mine on the planet at the time, they did not get paid enough to buy food from the mine supermarket

“If Australia is genuine about rebuilding its relationship with us they need to send us useful people like nurses, doctors, teachers, engineers – not bureaucrats,” Watawi said.

“Australia would have won more power and influence here if they had sent us a drunk rugby team rather than their current batch of bureaucrats.

“Compare this to New Zealand [which has] slowly and carefully with great cultural awareness built the Bougainville police force and law and justice sector since the signing of the peace agreement in 2001,” Watawi said.

“The result is that New Zealand is a trusted and respected international partner and member of our community.”

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‘Staggering’ drop in PNG’s resource sector revenue hits development

Papua New Guinea’s mining, oil and gas sector … “precipitous decline in resource revenues” for the whole country. Images: Ramu Mine

By Glenn Banks and Martyn Namorong in Port Moresby

Government revenues from Papua New Guinea’s mining, oil and gas sector have essentially dried up.

With the ongoing effects of the devastating earthquake in Hela province, the eruption of election-related violence in the Southern Highlands, a significant budget shortfall, and a foreign exchange crisis driving business confidence down, the resources of the government are severely stretched… and the massively expensive APEC meeting looms in November.

In this context, the drop in government revenue from the resource sector is staggering. And accounts in significant part for the growing fiscal stress.

In 2006-2008, according to Bank of Papua New Guinea figures, the government collected more than K2 billion (NZ$0.9 billion) annually from the sector by way of taxes and dividends, on mineral exports that had just topped K10 billion (NZ$4.6 billion) for the first time.

In 2017, the figure is just K400 million (NZ$180 million) on exports of K25 billion (NZ$11.5 billion) – a revenue reduction of more than 80 percent in the same time that exports have increased by 150 percent.

Government dividends and corporate taxes made up just 1.6 percent of the value of exports in 2017 (and that was a significant increase over 2015 and 2016).

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If we take the long-term average share of the value of exports that the government has received (at a little over 10 percent), this points to a potential ‘‘hole’’ of at least K8 billion over the past four years, an amount that would go a long way to covering the current fiscal deficit.

Some precedents
There are some precedents for the rapid drop in government revenues from the sector. In 1990 and 1991 – just as the ‘‘resources boom’’ triggered by the Porgera gold mine and oil production at the Kutubu oilfield began – revenues collapsed, largely due to the closure of the Bougainville copper mine in 1989; and again, briefly in 2009 due to the onset of the global financial crisis in 2008.

But neither of these has been as deep or as sustained as the current hole.

A full explanation of the precipitous decline in resource revenues is beyond the scope of this analysis.

Clearly, a number of factors are involved, including a fall in commodity prices, major construction and expansion costs (which attract accelerated depreciation provisions) and generous tax deals.

The revenue dry-up of the past four years also reveals that the state bears a disproportionate share of the risks associated with resource projects and investments. If we go back to the original intent of the post-Independence mineral policy, it was to translate mineral wealth into broad-based development across the whole country:
“…known mineral resources should be developed for the revenue they can provide to the government” (PNG Department of Finance 1977: 2).

This clearly has not happened in the last four years. And certainly the Treasurer cannot be critiqued for commissioning yet another fiscal review: this seems appropriate, although whether it effectively addresses broader issues of a “fair share” of mineral wealth remaining in PNG remains to be seen.

While there is much less money coming from the resources sector, there is at least better data than there used to be. The Extractive Industries Transparency Initiative (EITI) is a global initiative begun in 2002 to give transparency to what were regarded as often opaque flows of resource revenues from multinational companies in the extractives sector (especially oil) to the state in the countries in which they were operating.

Voluntary initiative
It is a voluntary initiative in which countries (and companies) can elect to become a “candidate” country, and so long as they are able to be compliant with EITI standards, they can be admitted as a full member of EITI.

The key requirement is to be able to report in a reliable way (through third party audits) on the revenues paid by companies, and reconcile these with payments received by the different arms of the state.

The involvement of all parties – companies, governments and civil society – and public communication around the event and its products is also seen as central to both transparency and raising awareness of the nature of resource revenues and their destination.

Papua New Guinesa initiated its involvement in EITI in 2012. Four annual EITI reports have so far been produced (for the years 2013 to 2016). These reports provide an increasingly rigorous and transparent set of data on flows from the sector to the government, and identify additional revenue streams to the government than what BPNG use (and have used for the past 40 years).

When all the additional revenue streams that EITI identify are included, the total share of the value of mineral exports rises to around 6.5 percent for 2017, up from the 1.6 percent based on the BPNG data.

EITI is not without its problems and the most recent PNG country report identifies areas where it needs to be strengthened in PNG, and a focus on companies rather than operations can lead to the obfuscation of total flows and payments from each mine, oil and gasfield.

In the PNG context, an examination of the sub-national flows and audit trails is also significant, and an initial study into this is underway.

This article was originally published in the PNG Post-Courier.

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Papuans protest over ‘Act of Free Choice’ in 13 cities in Indonesia

By Kustin Ayuwuragil and Ramadhan Rizki in Jakarta

Papuans have launched protest actions in 13 cities across Indonesia to demonstrate against the so-called “Act of Free Choice” that enabled Jakarta to take control of the Melanesian region.

The Papuan Student Alliance (AMP) and the Indonesian People’s Front for West Papua (FRI-WP) organised the rallies in cities, including Jakarta, Bandung and Ambon.

AMP spokesperson Surya Anta said that they were taking to the streets based on two principal issues related to West Papuan independence.

“[Papuans had] already declared their independence in 1961, deciding not to be part of the 1945 [declaration of Indonesian] independence [from the Dutch],” Surya told CNN Indonesia in front of the State Palace in Central Jakarta last Thursday marking the August 2 date.

Surya said that at the time, the people of West Papua already had a state symbol, flag and currency, although no administration had yet been established.

The second reason was that the people of West Papua wanted to separate from Indonesia because for years and years they had suffered “slow-motion genocide”.

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This was in no way in accordance with the values enshrined in the state ideology of Pancasila in realising independence for all nations.

‘Oppression, slow-motion genocide’
“They suffer oppression, abuse, slow-motion genocide, rape, abductions, no freedom of expression and access to information, and many other things,” he said.

The problems facing the West Papuans also included the massive exploitation of natural resources, which according to Surya, is because of the PT Freeport Indonesian gold-and-copper mine problem.

Social inequality was also high compared with other parts of Indonesia.

Surya added that the West Papuan people wanted to separate from Indonesia because they did not feel Indonesian because of the numerous problems cited.

“Yes (they want to separate from Indonesia) because from the very beginning they did not feel Indonesian. Go ahead and check the [1948] Youth Pledge. Was West Papua mentioned there?,” he said.

Surya said that the infrastructure development which was being touted by President Joko “Jokowi” Widodo in Papua had not been enough to make the people feel Indonesian.

“Yeah, like the Dutch [colonial] period, we got schools, but did this then make us become Dutch citizens? No. We still felt convinced that our identity was different,” he said.

Widodo has become known as the Indonesian president which has most often visited Papua. His agenda has been varied but in his Nawa Cita [nine point priority programme], Widodo has prioritised the resolution of past human rights violations and the development of infrastructure in Papua.

‘Same old song’
Coordinating Minister for Security, Politics and Legal Affairs Menko Polhukam Wiranto referred to protests by Papuan pro-independence activists such as these as being a “separatist” action seeking to attract international attention.

“It’s a small separatist movement but by methods such as this [they] want to get world attention,” said Wiranto at his office in Jakarta.

The former commander of ABRI (Indonesian Armed Forces, now TNI) said that threats by Papuan pro-independence groups which had been widespread lately were just the “same old song” which had been played repeatedly for a long time.

As has been reported, the United Liberation Movement for West Papua (ULMWP) were holding actions in Jakarta and London to support a new referendum for the Papuan people.

At Thursday’s action in front of the State Palace the AMP and the FRI-WP expressed their support for West Papuan liberation from the NKRI or Unitary State of the Republic of Indonesia.

Responding to this, Wiranto suggested that people do not need to become upset or anxious about the frequent actions by such groups.

“This old song is the same as the one played in the past. We don’t need to get upset, we don’t need to get anxious, we will just fight it,” he said.

Wiranto also said that the government would not be influenced by the “separatist” threat from such groups.

He asserted that in principle the government still considered Papua would remain part of the NKRI forever and did not need to be disturbed by challenges by any party at all.

“It is clear that we have a principled and standing position which cannot be disrupted by challenges from movements such as this,” he said.

Soft diplomacy
Wiranto also insisted that the government had repeatedly made efforts to develop diplomatic relations with neighbouring countries in order to suppress “biased issues” related to development in Papua.

Wiranto claimed that heads of state in the Asia-Pacific region such as Micronesia, Nauru, and Australia were often invited to help in “suppressing” such groups.

“Soft diplomacy activities which we are carrying out in the South Pacific continue apace. They [the Papuan separatist groups] perhaps then feel angry about the soft diplomacy activities that we are conducting,” said Wiranto.

Wiranto claimed to have invited officials from these countries to see for themselves the current conditions and social developments in remote parts of Papua.

This is aimed at preventing countries in the Asia-Pacific region from “misunderstanding” the current social developments and situation in Papua.

“So we invite them to see the facts [on the ground]. As if we do not provide good education to our friends in Papua. This issue is being continually pushed, continually made an issue of, in Europe, the South Pacific, but you know yourself right, the reality is not like that,” he said.

Wiranto said that there were still potential threats from irresponsible parties which resulted in the emergence of separatist groups in Papua.

He was reluctant however to cite which parties he meant. Wiranto said only that these parties did not want Indonesia to be united and only wanted to take the profits from mining in Papua.

“Because there are still parties that do not want our country to be united, there are still parties which take the profits from mining activities”, he said.

Translated by James Balowski for the Indoleft News Service. The original title of the article was “Aksi Referendum Papua: Infrastruktur Jokowi Bukan Jawaban”.

Background:
In 1969, Pepera — Known as the “Act of Free Choice”, a referendum, was held to decide whether West Papua, a former Dutch colony annexed by Indonesia in 1963, would be become independent or join Indonesia. The UN sanction plebiscite, in which 1025 hand-picked tribal leaders allegedly expressed their desire for integration, has been widely dismissed as a sham.

Critics claim that that the selected voters were coerced, threatened and closely scrutinised by the military to unanimously vote for integration.

Although it is widely held that West Papua declared independence from Indonesia on December 1, 1961, this actually marks the date when the Morning Star (Bintang Kejora) flag was first raised alongside the Dutch flag in an officially sanctioned ceremony in Jayapura, then called Hollandia.

The first declaration of independence actually took place on July 1, 1971 at the Victoria Headquarters in Waris Village, Jayapura, when Oom Nicolas Jouwe and two Free Papua Organisation (OPM) commanders, Seth Jafeth Roemkorem and Jacob Hendrik Prai, raised the Morning Star flag and unilaterally proclaimed Papua Barat or West Papua as an independent democratic republic, complete with a National Liberation Army (TPN), a provisional constitution, government, senate and parliament.

One of the rallies in West Papua. Source: Voice West Papua

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Indonesian anti-corruption watchdog arrests nine, including House member

A masked supporter of Indonesian Corruption Eradication Commission (KPK) holds up a poster declaring “I am KPK” during a 2015 protest in support of the commission. Image: VOA file

Pacific Media Centre Newsdesk

Corruption Eradication Commission (KPK) investigators have arrested nine people during a raid in Jakarta, including a member of the House of Representatives, an expert staffer, a driver and a businessman, reports the Jakarta Post.

The KPK also seized Rp 500 million (US$34,692) as evidence, the newspaper said.

KPK chairman Agus Rahardjo alleged the evidence confiscated was related to a transaction involving the House’s Commission VII overseeing energy, mineral, research and technology and the environment.

Reports circulated that the lawmaker in question was Eni Saragih, the deputy leader of Commission VII, and that she was arrested in the residence of Social Affairs Minister Idrus Marham. Both are Golkar Party politicians.

Agus said the arrests were conducted of Friday following anonymous tip-offs, reports the Post.

Golkar politician Maman Abdurahman immediately dismissed the report of the arrest, saying that the KPK had merely “picked up” his colleague “ES” from Idrus’ residence while the minister was throwing a birthday party for his youngest child.

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Maman was also present at the party.

“I didn’t know what reason the KPK had for picking her up. We should wait for the KPK to release an official statement. I hope she stays strong,” he said in a statement.

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Freeport’s $3.8b divestment mine deal – what it actually means

By Stefanno Reinard Sulaiman in Jakarta

Four Indonesian ministers gathered to witness the signing of an agreement between state-owned mining holding group PT Indonesia Asahan Aluminium (Inalum) and Freeport-McMoran (FCX) to take over Papua’s PT Freeport Indonesia (PTFI) in complex deals worth $3.85 billion.

Under the agreement, Indonesia will take control of 51 percent of Freeport Indonesia’s equity, and hold a majority stake in the company that operates the world’s largest gold mine, Grasberg in Papua.

The signing was the culmination of years of negotiations, preceding the current administration of President Joko “Jokowi” Widodo, and a tug-of-war between Indonesia and the American company.

The presence of four ministers at the signing was an indication of the economic and political importance of the deal to the Jokowi administration. But it is not yet a done deal, as officials have liked to claim.

The agreement requires the two parties to conduct further negotiations to finalise the details of the divestment. The government expects to finish ironing out the details sometime in August.

Freeport’s footprint in Indonesia
Here is your guide to understanding the seemingly never-ending negotiations, and why it matters for Indonesia to cement the deal as soon as possible:

  • Freeport-McMoran has operated in Indonesia since it signed its first contract in 1967 in a deal that was good for 30 years. In 1997, it received an extension for its operation until 2021. The two contracts in essence covered mining for copper, with gold and silver treated as associated resources found alongside copper ores.
  • Both contracts were signed during the regime of president Suharto. The first contract in 1967 was widely hailed as a landmark moment, symbolising the ushering in of Indonesia’s open-door policy to foreign investment under the pro-Western General Suharto, who had just taken over power from the socialist-leaning Sukarno a year earlier.
  • Developing the mines deep in the mountainous jungles of Papua required huge initial investment to build core infrastructure, including roads, housing and power plants, as well as preparing the pool of workers. In return for this investment, Freeport received generous tax breaks.

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Freeport’s first phase of operations exploited the Ertsberg Mountain in Mimika regency. Once the mountain was flattened, Freeport turned to mining the adjacent Mt Grasberg, which turned out to contain even larger reserves. Freeport is looking to mine the large gold reserves underground, assuming the latest agreement holds.

Bloomberg Intelligence estimates that the reserves at the world’s biggest gold deposit and second-largest copper mine are worth about $14 billion.

Freeport-MacMoran’s operations in Indonesia accounted for 47 percent of its operating income in 2017, according to Bloomberg.

Freeport’s huge profits have been a source of contention with long-standing criticism that the tax and royalty revenues paid to the Indonesian government represent only a pittance of its true income.

Indonesia’s 9.36 percent stake in PTFI, as stipulated in the 1991 contract of work (CoW), also does not amount to much, particularly as Freeport has at times withheld paying dividends.

For example, PTFI paid Rp 1.4 trillion in dividends in 2017 after three years of failing to make any payments, according to the Finance Ministry.

Freeport has also attracted controversy for the environmental and social impacts of its operations in the heart of Papua.

Last year, the Supreme Audit Agency (BPK) came out with a damning report claiming that Freeport had caused $13 billion in environmental damages.

Wind of change for Freeport
In 2009, Indonesia passed the Coal and Mineral Mining Law, or Law No. 4/2009. The law requires all foreign mining companies to divest 51 percent of their shares to the Indonesian government, state-owned or regional-owned enterprises or private Indonesian companies within 10 years of the start of operation.

Freeport has managed to work its way around the regulation by indicating that it is operating under a CoW, which is good until 2021.

In January 2017, the government issued a new regulation requiring all mining contracting companies to switch to special mining permits (IUPK) in order to export products in the form of concentrates, which is one step above ore but still not refined.

Freeport refused to fully comply, arguing that the IUPK was not a nailed-down scheme because the stipulations, including the taxation scheme, could change according to changes in government regulations.

In February 2017, the Energy and Mineral Resources Ministry issued PTFI an IUPK saying the company had finally agreed to the terms, paving the way for the divestment deal signed on Thursday.

Series of agreements
In August 2017, following pressure from the government to divest its shares in PTFI, Freeport-McMoran’s top management agreed to increase Indonesia’s share in PTFI to 51 percent, as well as to develop a smelter and increase Indonesia’s revenue from PTFI’s tax and royalty payments.

The Indonesian government chose state mining holding company Inalum to become the majority shareholder in PTFI.

However, questions remain regarding the price tag and how Inalum will pay for its stake in Freeport. Inalum president director Budi Gunadi Sadikin said on Thursday that the company would have to pay $3.85 billion in August and that it had already secured loans from 11 banks.

What are the benefits of majority ownership in Freeport?

Bisman Bakhtiar, the executive director of the Center for Energy and Mining Law (Pushep), said it was time for Indonesia to take control over the huge gold reserves in Papua, as 50 years had passed since PTFI began operations.

“Too much of our resources have been exploited. Surely after 50 years, we have the capability to operate it ourselves,” Bisman said.

Indonesia will reap the largest share of the profits and dividends, which in the past had almost entirely gone to PTFI. The government will also continue to enjoy taxes, royalties as well as a cut of the revenue.

“There are many ways to maximise the benefits from PTFI for the people, and divestment is one of them,” he said.

However, Bisman urged the government to ensure that Indonesia benefited from the next phase of negotiations to finalise the divestment deal.

“Even though we will finally become the majority owner in August, we need to look at the tax, royalty and revenue sharing arrangements. Are they better or not?”

Stefanno Reinard Sulaiman is a journalist with The Jakarta Post.

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Article by AsiaPacificReport.nz

MIL OSI – Source: Evening Report Arts and Media

Indonesia beefing up disputed Papua border force in bid for minerals

Papua’s disputed border with Papua New Guinea … hunt on for mineral riches. Image: PNG Blogs

By Albert Agua in Waigani

Indonesia is driving towards the Papua New Guinea border because of a recent discovery of huge mineral deposits in the Star Mountain regency just at the back of Tabubil Ok Tedi mine.

“Reportedly, there is gold, copper, coal, and thorium – a safer radioactive chemical than uranium,” says president-director of PT Antam Tato Miraza, who was then Director of Development, reports Pusaka.

“Geological Survey shows its potential is good and promising.”

READ MORE: West Papua Liberation Army behind deadly Nduga attack

The core of the deposit is, however, found in the disputed area of the border between PNG and Indonesia.

The claimed Papua border “shift” – the red zone near Ok Tedi mine. Source: PNG Blogs

Recently, Indonesian troops patrolled to Korkit and surveyed the land just around 40km from Ok Tedi, less than 10km from the border marker in the Korkit village to build another military base.

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The citizens from Korkit village who are PNG citizens are moving into the new Indonesian village.

This is just 20km from the mineral deposit area.

Thorium, a weakly radioactive element that can be used as fuel in a nuclear power reactor, has been discovered in the disputed area and this has been the sole driver for Indonesians to force themselves into the disputed territory.

Also the “explorers” are actually the military carrying out the exploration.

The Indonesians have been transporting mining supplies to the area and the locals are prepared to wage war if the exploration continues under heavy military security.

Wutung border improvements
Meanwhile, major improvements in infrastructure and capacity are planned for the PNG-Papua border at Wutung, reports Loop PNG.

The improvements are planned as part of the PNG government’s West Sepik Special Economic Zone (SEZ).

National Planning Minister Richard Maru and delegates of a fact-finding mission to West Sepik visited the border area last week.

Loop PNG also reports that an international bus service and terminal are planned for the Wutung border post.

Albert Agua is an academic at the University of Papua New Guinea.

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Article by AsiaPacificReport.nz

MIL OSI – Source: Evening Report Arts and Media