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The company signed a memorandum of understanding with leaders of the Amungme and Kamoro peoples to establish what is being called “a mutually beneficial relationship based on the principles of equality, honesty and justice.” It was signed by James Moffett, Freeport’s chairman, and Thomas Beanal, a representative of the Amungme, who had previously been a vigorous critic of the company’s actions at Grasberg. It is aimed at improving the quality of life for the Amungme and Kamoro communities and ensuring that they benefit from the Grasberg operation.
“All we have ever asked is to be treated fairly and with dignity,” says Beanal. “That has not always been the case, but this agreement has been carefully and honestly negotiated and ensures that we will treat each other as equals from now on.”
Moffett is equally pleased with the outcome of negotiations. He says the deal shows that Freeport is committed to the social and economic well-being of the people living near the operation.
The agreement calls for a local company to be formed to maintain tailings levees and complete related earthmoving projects using local workers. PT Freeport Indonesia Co. (PT-FI), the major’s 81.3%-owned subsidiary, recently started a massive project to stabilize waste dumps, following a slide in May that killed four workers.
The agreement also creates an agriculture, marine and animal husbandry project, which will serve as a much-needed agricultural base for the Timika area while providing locals with a chance to learn employable skills.
The vast Grasberg operation is in the rugged highlands of the Sudirman mountain range in the Indonesian province of Irian Jaya. Only a few hundred people lived in the region when the deposit was found, though the subsequent mine development led to an influx of thousands seeking employment. Social unrest soon followed, in part because not all the people could be employed, yet also because of inter-tribal rivalries. Over time, local citizens grew to resent the fact that most of the mine’s proceeds were flowing to Jakarta. At the same time, human rights abuses perpetrated by over-zealous government forces were drawing international scorn, casting a further cloud over Freeport’s activities.
In the 1990s, Freeport began to address these and other grievances. The company launched several social, cultural and community development programs designed to reduce the impact of its operations on local villages. As well, it set about monitoring and mitigating environmental impacts.
Freeport’s environmental policy now requires an annual internal environmental audit, in addition to independent external audits by qualified experts every three years. In the first audit, in 1996, Dame & Moore made 33 recommendations, all of which have been implemented. The second audit, completed in 1999, found that the environmental management system developed and implemented at Grasberg was “exemplary and a showcase for the mining industry.” About 70 formal observers, including the World Wildlife Fund, were invited to participate in the audit site visit.
The second external audit found that Freeport’s environmental commitments will total US$1.6 billion over the mine life. It made specific recommendations, including the need for a comprehensive groundwater study and additional groundwater monitoring, as well as increased biological monitoring in estuaries downstream of the tailings deposition area. Other recommendations included modifications to the closure plan and continued development of technology for the treatment of acid rock drainage.
Tailings plan
Much scrutiny was devoted to Freeport’s tailings management plan, which is understandable, given that the deposition area is a flood plain of the Ajkwa River. The 1999 audit concluded that Freeport’s tailings management practices “represent the best alternative” under the circumstances. The tailings have an alkaline ph (measure of hydrogen ion concentration), meaning they are not producing an acidic condition. The annual average ph in the Ajkwa River (from 1994 to 1999) ranged from 7.5 to 8.1. (A ph of 7 is considered neutral, whereas a higher ph is alkaline and a lower ph is acidic.) Furthermore, water quality samples in the deposition area are meeting drinking water standards set by the U.S. Environmental Protection Agency and the World Health Organization.
Still, environmental due diligence is an issue that can never be taken for granted. Freeport is now carrying out an ecological risk assessment of its tailings management plan to examine impacts and risks in and beyond the deposition area, including the Arafura Sea. The company is examining potential copper uptake by aquatic organisms and any potential health implications, all in an attempt to guide future tailings management decisions. At the same time, plans are being drawn up for a long-term environmental monitoring plan to evaluate water quality, hydrology, sediments and air quality.
Reclamation is already taking place in the Ajkwa deposition area. Test projects have confirmed that numerous species of native plants, crops and fruit trees grow well on the tailings placed in the area. Similar programs will result in reclamation of wetlands and forests in areas disturbed by mining.
Moreover, local residents are being trained in environmental management programs and procedures. This “environmental technology transfer” should serve them well long after mining ends, because monitoring activities will likely continue for decades afterward.
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