MPR speaker: RI has rights to amend Freeport contract

The Indonesian government has the rights to amend the contracts of works awarded to PT Freeport Indonesia, if the gold and copper mining giant is proven to have caused losses to the state such as destroying the environment, according to the speaker of the People's Assembly (MPR) Amin Rais.

"Basically, Indonesia is committed to honor the contract. But if there is some thing wrong with the company such as damaging the environment, the Indonesian people has the rights to amend the contract but not to revoke it," he said in Jakarta on Thursday.

The main solution to the problem, according to Amin, is that Freeport should be responsible to the environmental damages it has done on its massive mining sites in Irian Jaya and that the local people should be given a fair treatment especially related to the royalties provided by the gold and copper mining giants.

Pressure against the operation of the mining giant is growing following reports of massive environmental damages in its mining sites. The government's environmental agency, House members and green institutions have expressed similar concerns. They did not only ask the company to take a better care on its environment but also demand the government to revoke the relugation, which annuled the requirement imposed on the company to divest up to 51 percent of its stake to local companies.

Freeport denied all the wrong doings.

Former U.S. secretary of state Henry Kissinger recently met President Abdurrahman Wahid as part of Freeport's lobbying strategy to defend its control in the massive gold and copper mining site in Irian Jaya.

In the meeting Kissinger warned the government to honor the company's contract, saying that if it revoked the contract, it would certainly give a wrong signal to foreign investors, which are very much needed by Indonesia to help come out from its worst ever crisis.

Kissinger's warning however incited more opposition against the company. Some also criticized the president's decision to appoint the former U.S. secretary of state as Indonesia's international economic advisor.

Indonesia's Minister for Foreign Affairs Alwi Shihab came to the defence of Kissinger, saying his appointment had nothing to do with the Freeport problem.

Shihab said that Kissinger had every rights to defend Freeport and asked the government no to revoke its contract. " If you have a contract and you do not honor it, non more people will trust in you. It is the same with the contract given to Freeport. If we don't honor it, no more investors will come to Indonesia," the minister said.

Meanwhile Irian Jaya Governor Freddy Numberi said in Jakarta on Friday that the mining contract awarded to Freeport should be amended because it was no longer fit with the current situation.

He said that the amendment was possible because there was a clausal in the contract, which allowed both parties - the government and Freeport - to change the contract contents which are no longer relevant to the current situation.

"The amendment is needed for the interest of the government and Freeport itself," he said.

State Minister for Environment Affairs, Sonny Keraf, shared Numberi's view, saying that the amendment was also needed to ensure that Freeport would take a good care to the environment on its mining site. (*)