In November 1995, a number of NGOs released the following statement at the Second Biodiversity Convention Conference of Parties, which was held in Jakarta, Indonesia, 6-17 November 1995. (The Biodiversity Convention is an international agreement ratified by over 120 countries, including Indonesia; the United States has signed but not ratified.) The Center for International Environmental Law, one of the NGOs that prepared the statement, is posting it on several IGC conferences, to inform IGC users of the implications that international treaty obligations may have for specific cases of environmental damage such as Freeport's Irian Jaya (West Papua) mine.

-- David Downes, Center for International Environmental Law (CIEL), Washington, D.C., U.S.A.

The Grasberg mine in Irian Jaya (West Papua) -- majority owned and controlled by the U.S. corporation Freeport McMoRan, Inc. -- illustrates some of the international dimensions of biodiversity loss which must be addressed under the Biodiversity Convention. The huge mine is a major environmental problem, massively altering the landscape, irreparably damaging the rich biodiversity of the area, and harming the health and sustenance of local indigenous communities. In addition, the government's own human rights commission has found that government security forces policing the mining area for Freeport have committed serious human rights violations. We urge countries involved to assess the mining's environmental and social costs, to consult with indigenous communities and protect their rights, and to take concrete steps consistent with the Biodiversity Convention to minimize impacts and where possible restore past damage. Until this takes place, this case raises questions about the adequacy of the Convention's implementation.

Background

The Grasberg mine in Irian Jaya (West Papua), owned and operated by Freeport Indonesia, has large deposits of gold, copper and silver worth an estimated $50 billion. It is controlled by a U.S. based corporation, Freeport-McMoRan, Inc.; most of the ore is currently smelted in Japan and Germany. Extending from the snow cap of Indonesia's highest mountain to the coast, Freeport's 2.6 million hectare concession includes ecosystems ranging from alpine meadows to wetlands and mangrove forest. The indigenous people, the Amungme, depend on many of these ecosystems for food, water, medicine and shelter. The area is believed to be rich in biodiversity, much of it endemic.

Freeport has profitably invested billions of dollars in the Grasberg mine since it opened in 1973, and royalties and taxes are a major source of Indonesian government revenues. The environmental cost, however, is large and growing. Dumping of overburden rock from the open pit mine (two kilometers in diameter) destroys alpine meadows, possibly extinguishing endemic species. Every day, Freeport dumps over 100,000 tons of tailings directly into the Ajkwa river -- although it is common practice in the U.S. to prevent tailings from entering water supplies by depositing them in enclosed ponds. This has caused flooding, re-routing of the rivers, and destruction of sago forests and indigenous hunting grounds. There are also indications that the tailings release toxins into the water, damaging drinking water supplies, fisheries and freshwater biodiversity downstream. Freeport has sought to retaliate against criticism, in one case asking the U.S. Agency for International Development to terminate aid to an Indonesian NGO.

Recommendations for Implementing the Biodiversity Convention:
Promote Use of Indonesian Law and Policy to Minimize Impacts

Article 8.j of the Convention requires protection of the traditional knowledge and practices of local and indigenous communities, and Article 10.c requires Parties to protect and encourage customary use of biological resources based on traditional sustainable practices. These provisions mandate protection of these communities' rights to their biological resources against interference from mining. Under Article 6.b, Parties must integrate conservation and sustainable use into relevant sectoral programmes and policies. In addition, Articles 7.c and 8.l require Parties to identify, monitor, regulate and manage activities that harm biodiversity. Thus, Indonesian mining policy and programmes should fully evaluate the Freeport mine's biodiversity impacts.

Article 14.1.a requires Parties to introduce environmental impact assessment (EIA) procedures for proposed projects, minimizing adverse impacts, and providing for public participation. We urge the Indonesian government to ensure that the EIA procedure applied to the Freeport mine leads to minimization of the mine's impacts. A government-established commission oversaw an EIA of the mine, but the Mines and Energy Ministry allowed continued mining without consulting the commission and without implementing all of the commission's recommendations. Walhi (Indonesian Forum for the Environment), a coalition of Indonesian NGOs, recently filed a legal action in Jakarta Administrative Court challenging the ministry's action, arguing that Freeport's proposed environmental protection plan was inadequate. While affirming Walhi's standing to bring the action, the court rejected the challenge. Walhi has appealed, and the case's progress will be an important test of Indonesia's progress toward achieving the Convention's objectives. We suggest that the Parties consider this case as an instructive example of the Convention's application in national law and procedure, and note that Indonesia could discuss it in future national reports.

Countries Must Reevaluate Outside Economic Support for Freeport.

Under Article 11, Parties must develop economically and socially sound incentives for conservation and sustainable use of components of biodiversity. Parties must review existing incentives to ensure that they are available only to those who minimize impacts on biodiversity. Parties must also manage activities under their jurisdiction or control that impact biodiversity, regardless of where the effects occur, under Articles 4.b and 8.l.

Consistent with this, Freeport should not receive economic incentives for its activities without a review of the mine's impacts on biodiversity. For instance, the Overseas Private Investment Corporation recently canceled a US $100 million insurance policy on the mine that it had issued in 1990 to Freeport to cover the risk of loss of investment due to political changes. OPIC, a U.S. government chartered corporation, provides this protection to U.S. companies to encourage overseas investment. OPIC canceled the policy because it found that Freeport had created "an unreasonable or major environmental, health or safety hazard in Irian Jaya (West Papua)."

The Multilateral Investment Guarantee Agency (MIGA), a World Bank affiliate, also insured Freeport's mine in 1990 against political risk up to US $50 million. A number of Parties control MIGA through its governing structure. Those Parties should ensure that MIGA investigates the mine's environmental, health and human rights impacts and consults with local communities and concerned citizens.

Investing and Consuming Countries Must Take Responsibility.

While Indonesia has the responsibility to regulate mining within its jurisdiction, other Parties also have the responsibility to evaluate and manage overseas impacts on biodiversity caused by management and investment decisions made by corporations based within their jurisdiction, consistent with Articles 4.b and 8.l. We urge the U.S. to take action to ensure that Freeport reduces mining impacts. Japan and Germany may also wish to examine their responsibilities as major consumers of the mine's output. The overall balance between these two responsibilities is complex and controversial, and we urge the Parties to cooperate on this "matter of mutual interest" as required be Article 5. They could begin by cooperating to evaluate the impacts of consumption and investment patterns in key sectors on achievement of the Convention's objectives.

In conclusion, we reiterate our deep concern about the serious threats that the Grasberg mine poses to biodiversity, human health and local and indigenous communities' rights. We urge the countries involved to address those threats consistent with the Biodiversity Convention's requirements.

• David Downes, Center for International Environmental Law (U.S.A.)
• Emmy Hafild, Walhi (Indonesia Environmental Forum)
• Alejandro Argumedo, Cultural Survival Canada
• Arimbi H, ELAW-Indonesia
• Nishu Aggarwal, Environment Liaison Centre International
• Andrea Durbin, Friends of the EarthDUS
• Ian Fry, Greenpeace Australia
• Naoko Funahashi, Japanese NGO Network on Biodiversity
• Alistair Graham, Humane Society International
• Gudrun Henne, German Working Group on Biodiversity
• Tati Krisnawaty, Solidaritas Perempuan (Indonesia)
• Miguel Lovera, IUCN Netherlands Committee
• Gurdial Nijar, Third World Network
• A. Hakim Nusantara, ELSAM (Indonesia)
• Ashish Kothari, Indian Institute of Public Administration
• Bruce Rich, Environmental Defense Fund (U.S.A.)
• Laurie Macdonald, Sierra Club (United States)
• Catherine Tinker, TIILO (United States)
• Bambang Wijajanto, Indonesian Legal Aid Foundation
• R. Yando Zakaria INDISCA (Indonesia)

November 14, 1995

For more information, contact:
Center for International Environmental Law (CIEL),
e-mail cielus@igc.apc.org
or
Walhi (Indonesia Environmental Forum), e-mail
walhi@igc.apc.org.