Potential loss of revenue from Freeport has reached 6 trillion rupiah – West Papua No.1 News Portal
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Potential loss of revenue from Freeport has reached 6 trillion rupiah

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PT Freeport Indonesia mining area in Mimika Regency, Papua – Jubi / IST

Jakarta, Jubi – The Supreme Audit Agency (BPK) found that the potential loss of non-tax state revenues (PNBP) of PT Freeport Indonesia (PTFI) Contract of Work for the period 2009-2015 amounted to 445.96 million US dollars or Rp6.02 trillion exchange rateith, w assumption Rp13.500 per US dollar).

Supreme Auditor IV BPK Saiful Anwar Nasution said the Government through Government Regulation Number 45 Year 2003 as already amended by Government Regulation Number 9 Year 2012, has determined the amount of fixed contribution rate, royalty and additional royalty, but PTFI still uses the tariff stated in Contract of Work (CoW) which amount lower, and not adjusted to the latest tariffs according to the government regulations, thus resulting in the loss of potential PNBP.

Based on Government Regulation No. 9 of 2012, copper royalty rates are set at 4 percent, gold 3.75 percent, silver 3.25 percent. While in the work contract, the copper royalty tariff is 3.75 percent, gold 1 percent, and silver 1 percent.

“According to the BPK, the royalty must be in accordance with the PP, but it has been fixed, while the fix it too late,” said Saiful during a discussion at the BPK Office, Jakarta, Tuesday (October 3). The main problems, one of which is internal control in the Freeport Indonesia Contract of Work includes the implementation of policies that result in the loss of potential revenue.

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Nevertheless, Saiful confirms that BPK’s findings only show potential state losses, not state real losses.

“The potential is not really a material loss, if we do not do something, it could be a loss, so we recommend not to deposit it first, we recommend it to do something first, otherwise it is called a state loss” Saiful said.

Inspection of PT Freeport Indonesia (PTFI) Working Contracts (PTFI) for 2013-2015 is conducted at the Ministry of ESDM, Ministry of Environment and Forestry (LHK) and other relevant agencies. The examination of PTFI COW 2013-2015 aims to assess PTFI’s compliance with its tax obligations, non-tax revenues (royalties and fixed fees) as well as export duties, assess compliance with environmental regulations and examine whether PTFI’s extension of contract and divestment PTFI’s shares have been in compliance with the laws and regulations.

The examination results of PTFI CoW concluded that the management of mineral mining at PTFI has not been fully implemented in accordance with the provisions in place to ensure the achievement of the principle of sustainable and environmentally sound natural resource utilization for the greatest prosperity of the Indonesian people.

The conclusions are based on the weaknesses occurring in the PTFI CoW from the aspects of state revenue, the environment, the extension of work contract and divestment of shares, whether related to internal control or compliance with the provisions of the law.

Based on the BPK data, the examination results of PTFI KK in 2013-2015 revealed 14 findings containing 21 problems. These issues include 11 weaknesses of the Internal Control System (SPI) and 10 non-compliance with statutory regulations valued at 181.45 thousand US dollars, or equivalent to Rp2.41 billion.

Earlier, in 1967, the Government of Indonesia signed a first generation agreement with one of the companies from the United States. The COW Agreement was renewed to the V-generation KK in 1991. PT Freeport Indonesia’s working areas include Blocks A and B which are spread over seven districts in Papua Province.

In the period 1967-2015, PTFI experienced several changes in the composition of shareholder ownership. As of December 31, 2015, 81.28 percent of PTFI’s shares are owned by Freeport McMoRan (FCX), while the Government of Indonesia and Indocopper each have 9.36 percent. But to note, Indocopper shares are wholly owned by FCX.

The issuance of Law Number 4 Year 2009 on Mineral and Coal Mining becomes the strong legal basis for the government in encouraging companies to develop and increase the added value and benefits of mining business activities optimally. In accordance with the mandate of Article 169 paragraph (2) of Law Number 4 of 2009, the provisions in Article PTFI CoW shall be adjusted (renegotiation) with the Government of Indonesia no later than 1 (one) year since its enactment.

Since 2010 KK renegotiations have been implemented by several government-formed teams. In 2015 the results of the renegotiation emphasize on six strategic issues, namely the area of ​​work, the continuation of mining operations, the state revenue of processing and refining obligations, divestment obligations and liability of the use of goods, services, and domestic labor.(Antara/Zely Ariane)

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Economy

People not be provoked with rumours on Freeport’s operating area

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An illustration of Freeport mine. – the Courtesy of Jubi

Jayapura, Jubi – A provincial parliament member, the Rev. Nikolaus Degey, expects people of neighbouring regencies Mimika Regency in Papua Province, would not address rumours on Freeport’s operating areas seriously.

“Rumors say Freeport’s operating area has crossed the territory of other regencies. It’s not true. This issue is misleading,” confirmed the Rev. Degey to Jubi on Sunday (15/12/2019).

The operating area of PT Freeport Indonesia covers both mining and port areas, where located in Mimika Regencies. In 1972, Freeport started its ground mining exploitation which makes it the largest ground mining area in the world.

Along with advanced technology, Freeport shifted its operation into underground mining, in which activities are invisible from the public. This has raised speculations among people who believe the company’s operating area has crossed their regions.

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“We appeal to people living in Puncak Jaya, Paniai and Intan Jaya to not being provoked. Because this rumour might harm people,” he said.

Also, he said if Freeport’s operating area has crossed the border of the three regencies it would impact on people’s lives. According to him, if the rumours are true, people in Puncak Jaya, Paniai and Intan Jaya might have a similar experience as people of Mimika Regency. Amungme and Kamoro tribes are indigenous tribes who are the most affected by mining activities of PT Freeport Indonesia.

“I think this would be happening upon them [if the operating area of PT Freeport has crossed the border of Mimika Regency],” he said.

Moreover, the Rev. Nikolaus Degey asked those who spread this rumour to stop provoking people in these three regencies. Instead, he encourages them to bring this issue to the court rather than circulating rumours that potentially harm ordinary people.

Meanwhile, the former provincial parliament member and the Chairman of Paniai Customary Council, John NR Gobai, the issue of Freeport’s mining area should be solved before talking about the provincial or regional area split in Papua. It is important to ensure that the establishment of new administrative areas would not raise conflict of interest to get a share of Freeport mining activities.

Gobai said the corporate, indigenous council and the government must sit together to solve this issue. The Government also need to guarantee the future of people.

“If I was questioned, I would say it’s better to solve the mining and land-tenure rights of people living around the company. [If] the company has done all this business in its mining area, they would go. People would never go, they will stay. So it needs a guarantee [for them]” said Gobai. (*)

 

Reporter: Benny Mawel

Editor: Pipit Maizier

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Anticipating toxic spills in Papua New Guinea, DKP monitors fishermen’s catches at Hamadi fish landing

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Map of Papua Island showing the location of sea waters in Basamuk, Madang, Papua New Guinea. – Google Maps

Jayapura, Jubi – The Office of Fisheries and Maritime Affairs (DKP) of Jayapura Municipality continues to monitor local fishermen’s catches at Hamadi fish landing following the toxic spills in Madang, Papua New Guinea. Municipal DKP took a few samples of fish to a laboratory for further research whether the incident would impact to the local catchment or fishing ground areas.

The Head of Jayapura Municipal DKP Martheys Sibi said by Monday, his office is still waiting for a clarification from the Indonesian Ministry of Maritime and Fisheries (KKP-RI). “But, based on our observations, so far [the condition of] Hamadi Fish Landing (PPI Hamadi) runs as usual. Fishing activities at the local fishing ground by local fishermen have not yet had a significant impact,” he told Jubi when asked for confirmation via WhatsApp on Monday (18/11/2018).

Sibi further said by Monday the local fishermen continue to bring their catches to sell in PPI Hamadi and such fishes look normal. “However, we will continue to monitor the impact of nickel waste (on fish and catchment areas) while waiting for a follow-up from KKP-RI in Jakarta,” said Sibi.

Moreover, he said the fish monitoring in PPI Hamadi would keep running while awaiting the result from the laboratory. “If there would be a complaint from fishermen (about their catches), such fish would be taken to the laboratory for testing. We have communicated with the Fish Quarantine and Quality Analysis Centre of KKP in Sentani, Papua, to examine a few samples of fish from fishermen,” he said.

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Earlier, the sea waters in Basamuk, Madang, Papua New Guinea has reportedly been contaminated by waste spills from China-owned nickel mining company. A report published by Dr Alex Mojon said pollution from Chinese-owned Nickel Ramu has caused fish to die around Madang sea. (*)

 

Reporter: Sindung Sukoco

Editor: Pipit Maizier

 

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CSOs decline logging company in Wondama

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Administrative map of Teluk Wondama Regency. – Jubi/manokwari.bpk.go.id

Jayapura, Jubi – Some Papua’s CSOs namely LP3BH Manokwari, YALI Papua, Yayasan Pusaka and Pemuda Suku Mairasi urge the Minister of Environment and Foresty to review the operation permit of a logging company PT Kurniatama Sejahtera (KTS) in Mairasi area.

The Mairasi tribal communities from Undurara, Wosimo and Inyora villages sent a statement letter stated on 12 May 2019 to oppose PT KTS to operate in Mairasi.

“People feel uneasy and disturbed due to the presence of the company and the military. It creates unsecured, disharmony and has no guarantee of providing economic benefit to the community,” Agust Veth from Pemuda Suku Mairasi told Jubi by phone on Sunday, 9 June 2019 in Jayapura.

According to Veth, people have not forgotten the incident of Bloody Wasior (2001) that allegedly triggered by logging activity from the timber company Darma Mukti Persana. Further, he said the human rights violation case in Wasior has not settled since then.

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“Now, the military along with some public leaders represent the LMA (Customary Council) who facilitate the meeting on ‘Social Communication’ allegedly want to intimidate and force the local community to approve the logging company to operate in Mairasi. However, the local community continue to decline the company and refuse to attend the meeting.”

Mairasi people have objected the timber activity of KTS since 2012, while in 2013, a military culprit based in KTS logging area in Sorong allegedly tortured three residents from Sararti and Ambuni villages. The incident then reported to the local government, the People’s Assembly of Papua Barat and the Minister of Forestry. No action towards both perpetrator and the company has yet taken.

“Some reports revealed that PT KTS had some internal and financial issues. The company cannot pay the IUPHHK-HA (licence for utilization of timber in natural forest) and has a deficit (source: www.nasional.kontan.co.id, 2010; PT. Inti Multima Sertifikasi, 2015),” added Vest.

The logging company PT Kurniatama Sejahtera obtained the IUPHHK-HA from the Minister of Forestry (now the Minister of Environment and Forestry) Nomor SK.648/Menhut-II/2009 on 15 October 2009 to permit it to operate in a concession area of 115.800 hectares located in Teluk Wondama Regency. PT KSP is a subsidiary company of Artha Graha Group operating in Teluk Wondama Regency.

Concerning the permit, the civil society organisations ask the Minister of Environment and Forestry to evaluate the permit of PT KSP and give penalties for their negligence.

“We also ask the Military Commander of XVIII Kasuari to urge the Military District Command Sector Wasior and other local military authorities to stop using the military approach and intimidation towards the local community and backing up the interest of PT KTS.”

“They should prioritise respect, protection and fulfilment on human rights and environment, especially the basic rights of Mairasi Tribe. Most importantly, they must prevent the reoccurrence of the same conflict. Therefore, the law enforcement and legal protection of Mairasi Tribe are in need.”

However, the Ministry of Environment and Forestry, Military Command of Kasuari and PT KTS have not confirmed this information. On the other hand, Konstan Natama, the Acting Sub-district Chief of Naikere, Teluk Wondama Regency told Antara on 18 January 2018 that he was concerned about the massive logging activity by PT KTS clearing out the ironwood trees in Naikere.

Meanwhile, Franky Sanperante from Yayasan Pusaka said another subsidiary company of Artha Graha Network is PT Papua Satya Kencana with IUPHHK-HA license No SK.647/Menhut-II/2009. It has a concession area of 195.420 hectares located in Teluk Bintuni Regency.

“Combined, the total concession of the two companies is about 79% of the total area of Teluk Wondama Regency (3,960 Km2) or fivefold of the area of Jakarta,” said Frangky.

In the report published by Research and Development Centre of Department of Health of the Republic Indonesia “Merindukan Hidup Sehat Orama Etnik Mairasi Kabupaten Teluk Bintuni, 2014”, it mentioned that trees with a diameter of one meter such as ironwood and mahogany found in that area.

In Naikere, PT KTS has cleared out the trees since 1990 and stopped the operation at the time of Wasior incident (2001). Timber trucks carried one or two logs of wood with a diameter of one or two meters three or four times a day at that time. (*)

Reporter: Timoteus Marten
Editor: Pipit Maizier

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