Gov´t Must Stop Giving Privileges to PT Freeport Indonesia

Sunday, 16 July 2017 , 12:00:00 WIB -

A PT Freeport Indonesia mining area (ANTARA)

JAKARTA, GRES.NEWS – Research and Advocacy Institute for Global Justice (IGJ) Coordinator, Budi Afandi, said the government must stop giving special treatments to PT Freeport Indonesia, such as the issue of a government regulation that gives ‘security for the company’s investments in the country’.

"It was foolish move as the regulation would also apply for other companies. Yet, it was only issued because of the negotiations with Freeport," Budi said, in a press release sent to gres.news, Sunday (15/7).

Meanwhile, HUMA researcher Yustisia Rahman said the government should not be afraid of asserting the nation’s sovereignty when facing Freeport McMorran as the international law on investments has given some advantages to nations.

For instance, there is the Clausula Rebus Sic Stantibus principle that contradicts the Pacta Sun Servanda principle commonly used by investors to protect their interests.

"The [Clausula Rebus Sic Stantibus] principle states that agreements of treaties between nations can be invalidated due to fundamental changed circumstances that cause the agreement or treaty impossible to implement," Yustisia said.

The government can also use 1803 (XVII) Resolution on the Permanent Sovereignty of States over Their Natural Resources (PSNR). One point in the resolution stipulates that sovereignty over natural resources and other resources of a nation is the right of peoples and nations.

The second point says, all exploration, exploitation or other forms of mining operations must conform to the rules and terms that was issued by the respective nation and people because it was necessary.

"If the dispute is brought to International Arbitrage. All we have to do is argue our claims. The government does not nee to worry as there are examples in which the Clausula Rebus Sic Stantibus principle is taken into account in arbitrage courts," he said.

Gunawan from IHCS said the government is backed by strong constitutional foundation. He pointed out the Constitutional Court’s clear interpretation on the phrase ‘Rights of a Nation’. "The concept (of the phrase) was introduced solely for the welfare of the people and should not be interpreted as ownership concept found in civil laws," he said.

"The renegotiation on PT Freeport Indonesia’s Work of Contract (KK) should not have only changed the contract into a Special Mining License and require the company to build a smelter," Gunawan said.

Meanwhile, Agrung Budiono from PWYP Indonesia regrets the facet that the government has been closed about their negotiation with PT Freeport Indonesia. "Yet, it is crucial or the government to open the contract and negotiation documents," he said.

He reminded that the Supreme Audit Agency (BPK) has found misconducts by the mining company. Furthermore, Tax Court has also ruled in favor of the Papua Administration, but the ruling has not been executed.

However, international law expert Irfan Hutagalung said the government must be careful as the Pacta Sun Servanda principle cannot be neglected just like that, saying that there needs to be fundamental changed circumstances. Therefore, he sees that negotiations would be the best option for the government.

"The fundamental changed circumstances must not be created by any party in dispute," he said. (mag)

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