1) In Papua, many still live in poverty despite abundant funds
2) Freeport may get lower duties after force majeure threat
3) FREEPORT SHOULD ALLOCATE SHARES FOR PAPUA PROVINCE: LEGISLATOR
----------------------------------------------------------------------------------------------------------------------------
1) In Papua, many still live in poverty despite abundant funds
Nethy Dharma Somba, The Jakarta Post, Jayapura | National | Wed, March 05 2014, 10:00 PM
Many residents in Papua are still living in poverty although the government has disbursed Rp 57 trillion (US$4.9 billion) in special autonomy, or Otsus, funds to the province since 2002.
“Such abundant funding could neither reduce the poverty level nor increase the human development index [HDI] in Papua. The funds channeled since 2002 to date have not yet been successful to move Papua from its current position as the province with the lowest HDI in Indonesia despite improvements,” said Supreme Audit Agency (BPK) member Rizal Djalil after a public lecture at the University of Cenderawasih in Jayapura, on Wednesday.
Papua Governor Lukas Enembe, Papua regional secretary Hery Dosinaen, University of Cenderawasih rector Karel Sesa and other academic community members attended the lecture.
Citing reports, Rizal said Papua’s HDI stood at 65.86 in 2012, up from 60.1 in 2002. The data showed that Otsus funds provided by the government to Papua positively impacted residents’ standard of living and quality of life but not in a significant way.
“Each Otsus disbursement of Rp 1 million increases Papua’s HDI by only 0.000001521, or approaching zero. In other words, increased Otsus funds have no significant impact on improving HDI in Papua,” said Rizal.
In Papua, 30.66 percent of the population is currently considered impoverished.
Rizal said the government should re-examine the Law No.21/2001 on Papua special autonomy based on results of a comprehensive evaluation on the implementation of special autonomy in the province.(ebf)
“Such abundant funding could neither reduce the poverty level nor increase the human development index [HDI] in Papua. The funds channeled since 2002 to date have not yet been successful to move Papua from its current position as the province with the lowest HDI in Indonesia despite improvements,” said Supreme Audit Agency (BPK) member Rizal Djalil after a public lecture at the University of Cenderawasih in Jayapura, on Wednesday.
Papua Governor Lukas Enembe, Papua regional secretary Hery Dosinaen, University of Cenderawasih rector Karel Sesa and other academic community members attended the lecture.
Citing reports, Rizal said Papua’s HDI stood at 65.86 in 2012, up from 60.1 in 2002. The data showed that Otsus funds provided by the government to Papua positively impacted residents’ standard of living and quality of life but not in a significant way.
“Each Otsus disbursement of Rp 1 million increases Papua’s HDI by only 0.000001521, or approaching zero. In other words, increased Otsus funds have no significant impact on improving HDI in Papua,” said Rizal.
In Papua, 30.66 percent of the population is currently considered impoverished.
Rizal said the government should re-examine the Law No.21/2001 on Papua special autonomy based on results of a comprehensive evaluation on the implementation of special autonomy in the province.(ebf)
--------------------------------------------------------------------------------------------------------------
2) Freeport may get lower duties after force majeure threat
Raras Cahyafitri and Satria Sambijantoro, The Jakarta Post, Jakarta | Business | Tue, March 04 2014, 11:58 AM
US-based mining giant PT Freeport Indonesia may finally get lower duties for its concentrate exports after intense lobbying of the government over a regulation on progressive export duties on semifinished minerals.
The Energy and Mineral Resources Ministry’s director general for minerals and coal, R. Sukhyar, said that his office would inform the Finance Ministry, which issued the controversial progressive export duty regulation, on Tuesday about “committed” mining firms, such as Freeport Indonesia, so they could receive an adjustment to export
duties.
“We are not in a position to give a percentage number. However, we need to give input on the calculation and evaluation [of the export duties],” Sukhyar said on Monday.
The government fully banned exports of unprocessed ore as of Jan. 12 as part of the implementation of the 2009 Mining Law, but has decided to allow semifinished mineral makers, including concentrate producers, to continue exporting until 2017. In return, the government has asked the semifinished mineral producers to pay export duties.
Under a Finance Ministry regulation, semifinished products are subject to progressive export duties of 20 percent this year, with the number set to increase to 60 percent by mid-2016.
Mining firms have been calling for an adjustment to the challenging duty scheme as their profit margins are only around 15 percent.
Freeport Indonesia, a subsidiary of US mining giant Freeport-McMoRan Copper & Gold Inc., said last week that it might declare a force majeure as the company had yet to resume its exports following the implementation of the law, and continued to object to paying the high duties.
Deputy Finance Minister Anny Ratnawati said on Monday that an adjustment to the export duties was possible as long as “there is a commitment to establishing a smelter” made by firms.
Meanwhile, the Energy and Mineral Resources Ministry is also working on two export recommendation requests from Freeport Indonesia and PT Sebuku Iron Lateritic Ores, according to Sukhyar.
Such recommendations are necessary to obtain an export license from the Trade Ministry, which has so far issued export licenses for nine companies.
Sukhyar said his office would screen Freeport Indonesia’s detailed plans of partnerships with other companies to build smelters.
Freeport Indonesia has said it is working with state-owned PT Aneka Tambang on a feasibility study for building a copper smelter and has also signed agreements to supply its concentrates to two other firms planning to build smelters, namely PT Indosmelt and PT Nusantara Smelting Corporation.
“Freeport has yet to determine the amounts of concentrates it will supply to its partners,” Sukhyar said.
He added that Freeport Indonesia would also have to put aside a security bond worth around 5 percent of the investment for the development of future smelters, before his office issued an export recommendation. “The export recommendation will be issued should the company meet the requirements [...] perhaps in the next two weeks.”
The Energy and Mineral Resources Ministry’s director general for minerals and coal, R. Sukhyar, said that his office would inform the Finance Ministry, which issued the controversial progressive export duty regulation, on Tuesday about “committed” mining firms, such as Freeport Indonesia, so they could receive an adjustment to export
duties.
“We are not in a position to give a percentage number. However, we need to give input on the calculation and evaluation [of the export duties],” Sukhyar said on Monday.
The government fully banned exports of unprocessed ore as of Jan. 12 as part of the implementation of the 2009 Mining Law, but has decided to allow semifinished mineral makers, including concentrate producers, to continue exporting until 2017. In return, the government has asked the semifinished mineral producers to pay export duties.
Under a Finance Ministry regulation, semifinished products are subject to progressive export duties of 20 percent this year, with the number set to increase to 60 percent by mid-2016.
Mining firms have been calling for an adjustment to the challenging duty scheme as their profit margins are only around 15 percent.
Freeport Indonesia, a subsidiary of US mining giant Freeport-McMoRan Copper & Gold Inc., said last week that it might declare a force majeure as the company had yet to resume its exports following the implementation of the law, and continued to object to paying the high duties.
Deputy Finance Minister Anny Ratnawati said on Monday that an adjustment to the export duties was possible as long as “there is a commitment to establishing a smelter” made by firms.
Meanwhile, the Energy and Mineral Resources Ministry is also working on two export recommendation requests from Freeport Indonesia and PT Sebuku Iron Lateritic Ores, according to Sukhyar.
Such recommendations are necessary to obtain an export license from the Trade Ministry, which has so far issued export licenses for nine companies.
Sukhyar said his office would screen Freeport Indonesia’s detailed plans of partnerships with other companies to build smelters.
Freeport Indonesia has said it is working with state-owned PT Aneka Tambang on a feasibility study for building a copper smelter and has also signed agreements to supply its concentrates to two other firms planning to build smelters, namely PT Indosmelt and PT Nusantara Smelting Corporation.
“Freeport has yet to determine the amounts of concentrates it will supply to its partners,” Sukhyar said.
He added that Freeport Indonesia would also have to put aside a security bond worth around 5 percent of the investment for the development of future smelters, before his office issued an export recommendation. “The export recommendation will be issued should the company meet the requirements [...] perhaps in the next two weeks.”
---------------------------------------------------------------------------------------------------------------------
3) FREEPORT SHOULD ALLOCATE SHARES FOR PAPUA PROVINCE: LEGISLATOR
Jakarta, 4/3 (Jubi) – Freeport should allocate shares for the Papua provincial governmentas part of efforts to improve local people’s welfare, a legislator said.
House of Representatives deputy chairman Priyo Budi Santoso made the calls on Monday during a meeting between the Monitoring Team for Special Autonomy with the central government and PT Freeport Indonesia in Jakarta.
“It’s also a form of implementation of Freeport’s responsibility to Papuans. It has operated in Papua for years, but until now the people of Papua are still living in poverty,” Priyo was quoted as saying by the House official website www.dprri.go.id.
A member of the monitoring team, Bobby Adhityo Rizaldi, said the government should not extend Freeport’s contract if Indonesia did not benefit from its operations.
“There should be a strict standard of conduct shown by Freeport to determine whether it is still worth keeping. If the government wants it to be nationalized, which one of the state-owned companies is ready to replace it?” he said.
Earlier, Minister of Energy and Mineral Resources Jero Wacik said in the meeting that the government made clear its views to PT Freeport.
“The government has asked PT Freeport to sell 40% of its products to domestically, and 60% of them can be exported abroad,” the minister said.
He also stressed that Freeport should not fire workers because mass layoffs could trigger instability. The minister said all foreign companies operating in Papua are required to sign a commitment of Corporate Social Responsibility (CSR) showing their funding pledges to local communities.
Meanwhile the CEO of PT Freeport, Rozik B Soetjipto said at the moment the central government has 20% of Freeport’s shares, up from 9.36% previously. PT Freeport’s Contract of Work will end in 2021 and there are plans for 20-year extension. (JUBI / Oyos Saroso/rom)
House of Representatives deputy chairman Priyo Budi Santoso made the calls on Monday during a meeting between the Monitoring Team for Special Autonomy with the central government and PT Freeport Indonesia in Jakarta.
“It’s also a form of implementation of Freeport’s responsibility to Papuans. It has operated in Papua for years, but until now the people of Papua are still living in poverty,” Priyo was quoted as saying by the House official website www.dprri.go.id.
A member of the monitoring team, Bobby Adhityo Rizaldi, said the government should not extend Freeport’s contract if Indonesia did not benefit from its operations.
“There should be a strict standard of conduct shown by Freeport to determine whether it is still worth keeping. If the government wants it to be nationalized, which one of the state-owned companies is ready to replace it?” he said.
Earlier, Minister of Energy and Mineral Resources Jero Wacik said in the meeting that the government made clear its views to PT Freeport.
“The government has asked PT Freeport to sell 40% of its products to domestically, and 60% of them can be exported abroad,” the minister said.
He also stressed that Freeport should not fire workers because mass layoffs could trigger instability. The minister said all foreign companies operating in Papua are required to sign a commitment of Corporate Social Responsibility (CSR) showing their funding pledges to local communities.
Meanwhile the CEO of PT Freeport, Rozik B Soetjipto said at the moment the central government has 20% of Freeport’s shares, up from 9.36% previously. PT Freeport’s Contract of Work will end in 2021 and there are plans for 20-year extension. (JUBI / Oyos Saroso/rom)