Freeport mining area in Timika - energytoday.com

Let’s Support PT. Freeport’s Divestment

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Freeport mining area in Timika - energytoday.com
Freeport mining area in Timika – energytoday.com

Jakarta, Jubi – International NGO Forum on Indonesia Development (INFID) expressed support for the government’s demand for PT. Freeport to divest its shares, saying it should be done within this year.

However, INFID executive director Sugeng Bahagijo said the organization has not conducted a study on the matter and was inviting other parties to support the divestment.
“I think the Minister Rizal Ramli has said enough and we, including people from Papua, must give him the support,” he told Jubi during the break in the Sixth Financial Transparency Conference held in Jakarta in the cooperation of the Financial Transparency Coalition, Prakarsa Jakarta and Transparency International Indonesia on Tuesday (20/10/2015).

According to him, although his institution has not yet conducted a research and study about PT. Freeport’s divestment in Indonesia, but the Minister Rizal Ramly has mentioned it for several times.
“About the sale of shares to other parties through the Initial Public Offering (IPO), we should be careful because Freeport might purchase it through other companies while the money was actually from theirs,” he said.

Earlier, the Minister of Energy and Mineral Resources, Sudirman Said, told reporters in Jakarta after meeting with the Commission VII/Indonesian House of Representative on Monday (19/10/2015) that PT. Freeport’s share divestment should be executed within this year.

According to him, the mechanism of divestment is delivered to the Ministry of Finance and the Ministry of State-Owned Enterprise because the Ministry of Energy and Mineral Resources is attempting the divestment could be realized within this year, said the Minister Said.

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Further, the Article 112 of Regulation 112 UU No.4/2009 states that after five years of operation, the business entities holding the Mining Business Permit (IUP) and Special Mining Business Permit (IUPK) whose shares owned by the foreign company must divest their shares to the Government, Local Government, State-Owned Company, and the Regional Owned Company as well. Further it’s regulated in the Government Regulation (PP) No.7/2014 about the implementation of the Mineral and Coal Business Activity. PT. Indonesia Asahan Aluminium Persero (Inalum) told Kompas.com on Monday (19/10/2015) about their readiness to divest PT. Freeport’s shares, but it still calculates the shares values it would take. Also it is still considering to take it by their own or incorporating with other companies.

“In term of internal cash condition, we’re ready. But related to the amounts (should be prepared), we should calculate it first,” said the Inalum Executive Director Winardi while saying the calculation would lead whether financing resource would be 100 percent from the company’s cash flow or credits from the bank.

He admitted buying Freeport’s divestment is the assignment of the Minister of State-Owned Enterprise (BUMN) Rini M. Soemarno. He said if State or State Company took over the shares, Indonesia would get more economic profit from PT. Freeport than by the Initial Public Offering (IPO).

Earlier, the Coordinating Minister of Maritime Rizal Ramli said the contract extension for PT. Freeport would not give benefit to Indonesia because it only pays one percent royalty. Ramli stated three points in regards to Freeport’s contract extension: first, he called the official who agreed about the extension as misguided, since the Indonesian Government is still not missing a lot of things, because during the period of 1967-2014, Freeport only paid one percent of gold royalty to Indonesia, while it paid 6 percent to other countries.

Second, Freeport was not responsive in managing the toxic waste which endanger the environment, especially in Indonesia. The third reason is Freeport has not implemented its obligation as the contract of work holder, namely divestment of some shares to Indonesian company. Further, the contract extension is illegal or against the law because the extension could be done at least two years before termination. (Dominggus Mampioper/rom)

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