Govt reaffirms commitment to honor Freeport mining contract

Secretary General of the Ministry of Mines and Energy Djoko Darmono said on Friday that it's the rights of the House of Representatives to issue a vote of no confidence to gold mining giant PT Freeport Indonesia, but stressed that the government remains committed to honor mining contracts.

Djoko was responding to earlier statement made by legislator Pramono Anung, a member of the House commission VIII on mining and energy, that the House could issue a vote of no confidence to Freeport if the company had truly deviated from its contract of work.

He said that the vote of no confidence would provide the government with a political back up to renegotiate the contract with Freeport.

But Djoko said that the government must honor business contract to maintain legal certainty here and to create a conducive investment climate.

He pointed out that if the government unilaterally revise the contract, the long overseas trips made by President Abdurrahman Wahid to allure foreign investors would be fruitless.

But Djoko said that the government would renegotiate contract that would benefit the two sides. He exemplified that when Freeport wanted to increase its daily production from 160 thousand tons to 300 thousand tons, the government demanded a greater portion of royalty.

Asked on the issue of environmental problem, Djoko admitted that Freeport must work much harder to prove that it's operation was environmentally sound.

Freeport Indonesia is 80 percent owned by Feeport McMoran Copper & Gold, 10 percent government of Indonesia and another 10 percent by the Nusamba group, a company owned by the family of former president Soeharto.

Renewed attack on Freeport was launched by the House commission I on human rights and security affairs following its visit to the Irian Jaya province. The commission recommended the government to revise the contract with Freeport because the gold operation had failed to improve the welfare of the Irian Jaya people.(*)