Gold and blood in the wilderness

Indonesia mine a blessing and a curse

February 21, 1996
Web posted at: 4:00 p.m. EST

From Correspondent Maria Ressa

IRIAN JAYA, Indonesia (CNN) -- The soaring mountain peaks and dense jungle of Irian Jaya on the eastern end of the Indonesian archipelago has been called one of the world's last great wilderness areas.

It is a region rich in natural resources such as gold, copper and zinc and, until early this century, was populated by only a few indigenous tribes.

But the Stone Age communities were forced to come face-to-face with the 20th century when the U.S. company Freeport-McMoran Copper & Gold began mining operations in Irian Jaya almost 30 years ago. Now, Freeport's massive mine near the town of Timka is at the center of a worldwide environmental and political dispute.

Tribal leaders and environmentalists claim the mine in the rugged mountains is the source of tons of toxic wastes that are killing portions of a river and acres of rain forest. Many of the tribes also complain that their land has been taken without compensation by the Indonesian government, and that human rights activists have been abused and some even murdered by the Indonesian military.

An awesome venture

The Indonesian government is struggling with the physical and financial pressures wrought by its population of more than 185 million people -- fifth largest in the world. As a result, it has accelerated development plans for Irian Jaya, including tapping its natural resources and building infrastructure such as roads and bridges. Government officials also have moved about 200,000 people into the region from the overcrowded island of Java.

More than 17,000 people work at the mine run by Freeport Indonesia. Freeport-McMoran owns 80 percent of the operation; the Indonesian government and private investors own the rest. Freeport mines about 125,000 tons of ore a day from what geologists say is the world's largest single deposit of gold. It's value is estimated at more than $50 billion dollars.

Critics not impressed

Angry opponents complain that water and sediment runoff from the mine is turning the nearby Ajikwa River a muddy brown. Emmy Hafild, a local environmentalist from the Walhi tribe, charges that the sediment, which many claim is toxic, has changed the course of the river and killed nearly 12 square miles of nearby forest.

Environmental critics also have accused Freeport of standing in the way of independent testing, although the company's senior ecologist, Bruce Marsh, denies that.

"They're free to take samples whenever they like," Marsh said. He notes that the river is within walking distance of the Timika Airport from which samples could be flown to an independent lab.

Marsh also says Freeport "has made a commitment that we will reclaim all the areas or revegetate all the areas that have been impacted by tailings." Huge piles of tailings contain the residue of the ore after the gold has been removed. Marsh says Freeport has built a $2 million laboratory to monitor the quality of the river and marine life, and insists the company is in compliance with applicable Indonesian and U.S. laws.

However, last October, the Overseas Private Investment Corporation, a U.S. agency, canceled a $100 million political risk insurance policy covering the mine after citing environmental concerns. Freeport says the action is illegal, and it has submitted the issue for arbitration.

A human rights flash point

The Freeport mine also is the focus of a long-simmering political dispute between the Indonesian government and the natives of Irian Jaya, located on the western end of the island of Papua, New Guinea.

A report by an Australian international aid organization details a confrontation at the mine between tribal people and Indonesian troops at Christmas in 1994. The report says soldiers opened fire, killing three civilians, while five members of the Dani tribe disappeared. The BBC World Service carried a similar report from one of its correspondents.

Paul Murphy, Freeport senior vice president, termed the Australian agency report "filled with half truths and exaggerations and, in some cases, outright lies."

The company has denied any involvement by its employees in the deaths or in any other alleged human rights violations in Irian Jaya. Murphy made the denials in -- among other places -- a January 1996 letter to the editor of The Texas Observer, which has printed several articles about Freeport Indonesia operations. In response, the editors said Freeport-McMoran "has been in a direct and mutually sustaining partnership with the Suharto government, by all objective counts one of the most corrupt and brutal dictatorships on earth."

Meanwhile, the Indonesian government's economic development of Irian Jaya continues. And Freeport Indonesia is spending $40 million a year to keep 600 people in the field searching for more mineral deposits like the nearly two billion tons of gold ore in the mine near Timiko.

But, unlike the miners, the government faces the urgent task of finding a balance between the Indonesian need for jobs, food and living space, and the fragile environment of Irian Jaya, where natives want to share in the economic prosperity while saving their homeland.

Editor's Note: Since this report was published, an independent audit has found that while Freeport-McMoran's mining operations have "significant impacts upon the environment," tailings produced by mining are non-toxic. The audit noted, though, that the waste makes the Ajikwa River visually and aesthetically "unsightly and unwelcome."

The Overseas Private Investment Corporation has since re- instated its insurance policy for Freeport-McMoran.

Prior to the report, the U.S. embassy in Indonesia found no evidence of human rights abuses on the part of company personnel.

And Freeport-McMoran said despite complaints that tribal land was taken without compensation, the company complied with Indonesian laws and a land rights agreement with the local people in acquiring land.

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