Indonesia: Human Rights Body Questions PT Freeport on CSR Funding

Gold and copper mining company, PT Freeport Indonesia, has been question by the National Commission on Human Rights on the matter of its local CSR funding. According to the Jakarta Post, representatives of three villages near Freeport’s operation area had recently filed reports with the commission requesting greater transparency in the distribution of the company’s fund.Commission chairman, Ifdhal Kasim, told The Jakarta Post

Since 1995, the company has had an agreement with the local people to donate 1 percent of its gross profit to foundations to be distributed for development projects… The villagers want the company to be clear on where the money goes and who receives it.

Ifdhal commented that any action which could be taken to be a non-transparent move could create conflict among villagers. However, he said that the company were cooperative in explaining how the fund worked. Nevertheless, Ifdhal refrained from commenting on how much money Freeport distributed every year and who the recipients were.

The newspaper reported that, even though the commission had not reached a conclusion on the matter, it hoped to resolve the problem within a month.

Freeport Indonesia is the local subsidiary of US-based Freeport McMoRan Copper & Gold, the world’s largest publicly traded copper company. The company’s spokesperson, Mindo Pangaribuan, confirmed the meeting with the commission, and was quoted as saying:

We were explaining Freeport’s community development programmes through our corporate social responsibility, including the provision of a voluntary fund for social development through an independent institution… The partnership fund is managed by, among others, the government, local customary groups, Freeport and local figures.

He added that the programme and the fund went through an independent auditor annually. According to him, the partnership fund went to the Amungme Kamoro Societies Development Institution (LPMAK) and that they had “channeled US$330 million by 2009, since the programme started in 1996.”

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