Government
to Extend Freeport License beyond 2019
When it comes to the sanctity
(sangat penting) of a contract, the
devil is always in the detail. With both hands tied by legal constraints (kendali
hukum), the government had few options other than forging (memalsukan) a
deal with US mining giant Freeport McMoRan Inc. to assure the contract
extension of its local unit PT Freeport Indonesia (PTFI).
The Head of Public Relations for the Ministry of Energy and
Mineral Resources, Dadan Kusdiana, said that the final say will depend on
whether Freeport manages to change its' working contract (KK) into a special
mining license (IUPK) before its' original contract expires in 2021.
Dadan added that should Freeport's request for an IUPK is granted (disetujui), then it would be allowed to operate in Papua until 2041.
The extension request is to guarantee its planned US$17,3 billion investment -
consisting of US$15 billion for the development of underground mines and
infrastructure, and another US$2,3 billion for the construction of smelters.
“If we dig deeper into the matter, we are in a weak [legal]
position. If our decisions go against the contract, they can take us to arbitration,”
said Minister of ESDM, Sudirman Said. “The deal has nothing to do with the
supremacy of the United States. It’s more about common sense. We have to abide (mematuhi) by the terms of the contract if we don’t want to be
internationally isolated,” he said.
According to Sudirman, the ministry was in the process of
amending the 2010 regulation by extending the timeframe to submit a request for
contract extension to 10 years from the current two years before a contract is
set to expire.
Contract extension and the company’s future tax arrangements
remain the most contentious (yg paling diperdebatkan) and unresolved
issues after PTFI inked a Memorandum of Understanding (MoU) with the government
on July 25, 2014, adjusting the terms of its CoW. The MoU was first made during
the administration of President Susilo Bambang Yudhoyono.
PTFI has mostly agreed to demands made by the government in
the MoU such as an increase in royalty payments to 3.75 percent from 1 percent
for gold, 3.25 percent from 1 percent for silver and 4 percent from 3.5 percent
for copper.
If Freeport complied
(menuruti) with the regulation, it
could only apply for the extension in 2019, a time when Indonesia will hold
both legislative and presidential elections, and issues related with Freeport
will be politically sensitive due to company’s long-standing stigma as the
symbol of US business imperialism in the archipelago.
Let’s discuss:
1.
Tell us how far you
know about Freeport!
2.
Tell us how well
you consider about the condition in Papua!
3.
In your point of
view, how ready is Indonesia to explore its natural resources?
4.
In your opinion,
do we still a help from US to invest their money in our resources?
5.
What can you suggest
to our government related to Freeport issue?
6.
What can you tell
to your colleagues about the condition of Indonesia where most of our resources
are claimed by other countries?
BENTENG
PANYNYUA ENGLISH CLUB
(Social Institution for
Education and Human Resources Development)
Secretariat of Activities: Fort Rotterdam Jl.
Penghibur No. 1, Makassar
Secretariat: Jl. Tanjung Palette, No. Telp.
085342612767, FB: facebook.com/bpecMks
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