Freeport´s Tactic to Protest Against Indonesia

Tuesday, 13 June 2017 , 12:00:00 WIB - Economy

Alliance of Social and Political Science Faculty (FISIP) Students from Jakarta, West Java, Banten are seen staging a demonstration at Jalan Cut Meutia, Bekasi, West Java, Friday (19/5). They asked the government to nationalize the strategic assets that are controlled by foreign private sectors, especially Freeport´s mining area, and stop intimidation against farmers. (ANTARA)

JAKARTA, GRES.NEWS – Indonesia for Global Justice (IGJ) urges the Indonesian government not to make an investment stability agreement that was requested by Freeport. "The Indonesian government must stop giving privileges to Freeport in upholding the Law on Mineral and Coal Mining," said the Coordinator of IGJ Research and Advocation, Budi Afandi, in a written statement received by gres.news, Monday (12/6).

Budi said that the investment stability agreement will only update the list of investment agreements that allow investors to protest against a country one-sidedly to the International Court of Arbitration. He asserts that Freeport’s temporary Special Mining Permit (IUPK) is a privilege provided by the Indonesian government, and legalized in the Energy and Mineral Resources Minister Regulation No.5/2017 that’s been revised to Energy and Mineral Resources Minister Regulation No.28/2017.

"Freeport’s temporary IUPK is only available until October 2017. If the negotiation doesn’t reach an agreement, the operations will be based on the Contract of Work (CoW). Despite this, Freeport has been advantaged by the concentrate export permit that’s still available until October 2017. This is the privilege given to Freeport that the other foreign mining companies don’t have," he explained.

Previously, Freeport asked the government to make an investment stability agreement that grants the equal rights as the CoW, such as nailing down the tax, contract extension guarantee, and the right to file a complaint to the International Court of Arbitration. Freeport has stated they will protest against the Indonesian government to the International Court of Arbitration for converting CoW to IUPK.

"The existence of investment stability agreement would be contrary to the spirit of the Mineral and Coal Mining Law that wants to take over the country’s independence in controlling and managing Indonesian mines. The agreement would negate the power of IUPK that puts the government’s position above investors," Budi added.

Meanwhile, Executive Director of IGJ Rachmi Hertanti explained that the investment stability agreement would still give a chance to Freeport to protest against Indonesia to the International Court of Arbitration. Despite this, the government has made a right decision by converting CoW to IUPK to stop foreign investors from making decisions arbitrarily.

"IUPK is administrative, and the management is one sided so the country has a bigger authority and the government may resolve disputes in the state administrative court. However, if the government makes the investment stability agreement, the government and investors are in the similar position, and the country has no authority to control investors. On top of that, the government must resolve civil disputes in arbitration agencies," she explained.

Rachmi also said that many foreign mining companies protest against Indonesia to the International Court of Arbitration because of the existence of investment agreements, both investment treaty and CoW. 50% of complaints filed by foreign investors to the International Court of Arbitration are from mining companies, such as Newmont, Churchill Mining, Planet Mining, and Indian Metal Ferro Alloys.

Despite this, the Indonesian government has tried hard to minimize the risk of being complained by foreign investors by reviewing and canceling investment agreements made by the government. "It’s obvious that Freeport urges the government to make investment stability agreement so they won’t lose their right to protest the Indonesian government to the International Court of Arbitration. If the investment stability agreement were approved, the government would suffer a setback in maintaining the state independence at mining sector," she said firmly. (dtc)

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