Freeport last year paid the government US$2.4 billion in taxes and royalties; it spent an additional $3 billion in operating costs including salaries, goods and services — mostly within Indonesia.
Yes, it took home a 15 percent profit, which is extremely marginal considering the high-risk nature of the business it is engaged in. Over the years, Freeport has contributed hundreds of billions of dollars to the Indonesian economy. Where did the money go?
Everyone says Papua is not seeing sufficient returns. The question everyone one should be asking is where did the money go? According to government regulations, Papua should have received $2 billion — 80 percent of the $2.4 billion.
This is a lot of money considering that there are only 2.8 million people in Papua. While the House of Representatives and the government talk about renegotiating mining contracts and wanting more of the pie, what they should be investigating is where did the money go?
It obviously did not go to the people of Papua. While it is easy to criticize Freeport for the way they have engaged the local population over the 40 years they have worked in Papua, the social issues they now are confronted with are not entirely their responsibility.
The contract was given to them by president Soeharto and the troops were sent in to deal with locals. This was considered the way to control security in those days, if obviously not the best way today.
For large developmental projects in remote locations to succeed today, there must be an open, transparent working relationship between the contractor, the government and the local people.
The welfare of the people is the responsibility of the government, not the contractor. Clearly the government has not done a good job of distributing the earnings it has received.
Mark Johnson
West Australia