Competing Interests
at the Freeport mine in Irian Jaya
The analysis of the mining sector in Southeast Asia is still in its infancy and has attracted little of the interest shown in other resource sectors, such as forestry or agriculture. Yet mining offers an exceptional site for the analysis of competition for resource benefits between states, local communities, and resource development companies. The levels of capital investment and the potential financial returns involved in mining attract an unusual degree of political interest. Policies are developed, positions articulated and relationships developed over time in ways that are not commonly found in the other resource sectors. In addition, the lengthy duration of most mining projects allows for a form of analysis which can track change over generations in the triangular relationship between the three key categories of primary stakeholder: the state, the company, and the community.
By CHRIS BALLARD
The Freeport copper-gold mine in Irian Jaya, Indonesia's easternmost province, towers over the region's mining industry. Majority-owned by a US company, Freeport McMoRan, the mine has been in operation since 1967. With an estimated reserve value in July 1998 of approximately US $54 billion it is probably the world's single richest mine. Much of this wealth derives from a single orebody, the giant Grasberg find, only discovered in 1988. The mine has had a troubled history, marked from the outset by strong and persistent opposition to the loss of their land from the indigenous Amungme community. These protests have led in turn to severe repression by the army, which is responsible for the defence of the mine as a strategic national asset. Hundreds of Amungme have been killed during the past thirty years and many more have died of hunger and disease while hiding in the forest from the security forces. Critics have focused largely on the role of the company, which has indeed been grossly negligent in protecting the welfare of the Amungme and other indigenous communities. Less clear in these critical accounts are the parts played by different elements of the state and the military, and the details of their interactions with the different communities of the Freeport area. Analysis of the conflict at Freeport is thus animated by a particular sense of urgency and responsibility to identify accurately the points at which pressure might be most usefully applied to promote change.Useful and necessary though the three categories of primary stakeholder are as a means of initially distinguishing among the different interests that are brought to bear on mining projects, they tend to mask rather than illuminate the complexity of processes that are actually at play. Media reports on the positions adopted by 'the company' or 'the community' in a dispute provide no sense of the identities of the sources, or their individual positions or factional allegiances. Simple stereotypes are generated for each category which, while often reflecting some generalized truths about their respective capacities and overall interests, obscure the role of internal differences in promoting changes in position. What are the processes by which governments come to accept and formally acknowledge community claims to land rights? Which are the factions in the military that can be approached to reduce the incidence of human rights abuse? Who within a community has both the stature and the capacity to negotiate on behalf of others?
Multiple interests
The uniformity of opinion and purpose often assumed for corporations is starkly absent at Freeport. Here, decision-making powers are closely guarded by the head office in New Orleans, and employees often find themselves in competition, both between the Jakarta branch office and Irian Jaya 'job-site', and amongst themselves, for the attention of New Orleans. Major differences of opinion, strategy and personal ethos are evident among staff, and these are exacerbated by ethnic distinctions, between foreign and Indonesian employees, and within these groups, between people from different foreign countries or different provinces of Indonesia. The challenge facing a constructive analysis is to move beyond both the critics' stereotypes and the company's own public statements to identify where decisions are made and how and by whom they are then implemented.
The Indonesian state, which granted the mining concession to Freeport in return for royalties and taxes, claims the land and the minerals of the mine on behalf of the nation under the Basic Agrarian Law of 1960. In practice, however, the civilian elements of government have been largely absent from the mine for much of its operational history. Although there has been increasingly intricate politics at the national level in Jakarta concerning ownership of the mine and the granting of further concessions, the state is present at the mine largely in the form of its security forces. Since the Grasberg discovery in 1988, the level of military interest in Freeport has risen significantly. In response to a series of conflicts with the community, some of them apparently staged by the military, troop numbers have been increased dramatically, making the Freeport area one of the most heavily militarized zones in Indonesia. Different elements of the security forces, each with their own distinct commercial concerns, legal and illegal, have widely differing objectives and clash frequently with each other. However, the increase in military presence around the mine appears to have made the situation less, rather than more safe for many of its residents. A series of massacres between 1994 and 1996 were reported and drew international attention to the Freeport area for the first time.
If closer inspection reveals the 'company' and the 'state' to be composed of multiple and often contradictory interests, the third major category of stakeholder, the community, presents an overwhelming kaleidoscope of identities and opinions. Despite enormous pressure from the mine and from the military, the Amungme have maintained a remarkably uniform public position. Inevitably, however, this obscures increasingly divergent opinions, some of which lend themselves to alliances with particular factions within the company or the military. Papuan immigrants from neighbouring communities, such as the Kamoro, Dani, Moni, and Me, lack the relatively cohesive internal structure of Amungme society, and have proven more susceptible to approaches from state factions. The 'community' thus encompasses many disparate elements, some of them allied to company and military interests, while others seek to maintain a position in opposition to the claims of the state and the company on their land. Finally, there is a host of other secondary stakeholders, most acting ostensibly in support of one or another of the primary stakeholders, but often with quite distinct concerns of their own. In the Freeport case, these include company shareholders, financial institutions, local, national and international NGOs, Christian missions, transmigrants and voluntary migrants, to name but a few.
An explanation of the history of conflict at Freeport that is both necessary and sufficient in terms of its scope would have to embrace all of these different parties or stakeholders, while focusing attention on some of the key turning points and thus on critical decisions that serve to identify the operation of specific interests. Yet this would be a massive undertaking, requiring a team of scholars with different specialist skills. My individual research must take a more narrow approach, and I have chosen to review the history of the Freeport mine from within the context of the longer durée of Amungme history, reversing the usual pattern whereby accounts of Freeport encompass the Amungme experience. In preparing a monograph on this topic while based at the Amsterdam Branch of IIAS, my intention has been to provide a model for the analysis of resource conflicts, in mining and other sectors, as well as the documentation of its history for the Amungme community, albeit from the perspective from an outsider. *
Dr Chris Ballard was a Visiting Exchange Fellow (ANU) at the Amsterdam Branch of IIAS from May until October 1999.
Division of Pacific and Asian History,
Research School of Pacific and Asian Studies,
Australian National University,
ACT 0200,
Australia.
E-mail: chris.ballard@anu.edu.au