July 17, 2017

Freeport sanction still valid despite heads of agreement

( - strict environmental sanction imposed on Freeport by the Indonesian Ministry of the Environment and Forestry at the end of October last year remains valid and has not been lifted following the recent signing of a heads of agreement related to the acquisition process of a major stake of Freeport.

The decision to impose this sanction on Freeport was taken by the ministry to act on a number of recommendations included in a Supreme Audit Agency (BPK) audit report (April 2017).

As the imposition of this sanction against Freeport is tied to the BPK, the ministry is required to comply with it. This means that any lifting of the sanction would not be easy, despite the signing of the heads of agreement.

The following photos, taken by a ministry team in late September last year, depict the ground-based evidence in Papua's Grasberg mine which prompted the imposition of the strict environmental sanction on Freeport.

The contents of the environmental sanction against Freeport make it clear that if Freeport does not fulfill the order for legal compliance, it will be hit with an even more severe sanction.

This means that the lifting of the environmental sanction against Freeport depends solely on the level of compliance shown by Freeport itself, which is certain not to be legally influenced by the heads of agreement.

The photos below - taken during the last two weeks of September last year - document the environmental violations perpetrated as part of Freeport's operations. This formed the basis of the ministry's decision to impose the sanction on Freeport a month later.

Further sanction recommended

The supreme audit report also reveals that Freeport has expanded its mining operations - without permission from the ministry - to involve protection forests equivalent in size to nearly five thousand football pitches.

Even supposing that the environmental sanction on Freeport is lifted at some point, the mining company could still be subject to further sanction due to these illegal mining operations, as recommended to the ministry by the supreme audit agency.

Going forward, the supreme audit agency's report detailing the environmental violations committed by Freeport, alongside the environmental sanction already imposed on Freeport by the ministry, will serve as the main reference points for monitoring Freeport's level of compliance with its legal obligations.