from Thomas Egan of Freeport McMoRan
Texas Observer
Jan 12, 1996

Mark Twain once said that "A lie can travel halfway around the world while the truth is putting on its shoes." What he said a century ago still applies perfectly today, when a falsehood can be flashed electronically round the world in an instant, while truth may take months to catch up to it.

Such was the case with your November 17 issue and its two stories written by Robert Bryce, which repeated accusations aimed at Freeport-McMoRan Copper & Gold that had been disproven months before. Unfortunately, even with its shoes on, the truth may never catch up to Mr. Bryce.

Mr. Bryce spews numerous false charges in his articles, like layer upon layer of vilification, but at the core is the most malicious prevarication of all: that Freeport employees participated in murder and other human rights violations in the area of its copper mine in Irian Jaya, the eastern-most province of Indonesia. This allegation of Freeport participation in human rights violations is based on a report issued in April by a non-governmental activist group called the Australian Council for Overseas Aid (ACFOA).

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Mr. Bryce spews numerous false charges in his articles, like layer upon layer of vilification, but at the core is the most malicious prevarication of all: that Freeport employees participated in murder and other human rights violations in the area of its copper mine in Irian Jaya, the eastern-most province of Indonesia.

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The ACFOA report, however, has been disproven by two thorough investigations. Those investigations--by the Catholic Bishop of Jayapura, Irian Jaya, whose report was issued in August; and by the Indonesian National Commission on Human Rights, whose report was issued September 22--concluded that human rights abuses did occur in Irian Jaya, but that Freeport was not responsible for those tragic incidents.

Most troubling to us is the fact that the results of both of these reports were available well before your publication date, yet the truth--that they found no participation by Freeport employees in the human rights violations--was not reported in your articles. Instead, you repeated the false and anonymous allegations these reports had discredited.

I want to make it absolutely clear that Freeport deplores the human rights violations that did occur, including the murder of our own employee by a sniper. We have fully supported and cooperated with the official National Commission on Human Rights' investigation into these incidents, as well as the ongoing investigation by the Indonesian military, separate investigations by the International Committee of the Red Cross, and investigations conducted by representatives from several foreign embassies. Not one of these investigations has uncovered any evidence of wrongdoing on the part of Freeport or any of its employees.

Yet Mr. Bryce ignores these truths. Instead, he quotes the ACFOA report, then mischaracterizes the Catholic Church report by saying it "...corroborates parts of the ACFOA report" (italics ours) as though it supported the false ACFOA charges aimed at Freeport by ACFOA. In fact, the report by Bishop H.F.M. Munninghoff undermines the credibility of the ACFOA report, stating that "Because the sources of the (ACFOA) report were anonymous, we were not able to accept it at face value." Distressed about the continuing mischaracterizations of his report concerning allegations against Freeport, Bishop Munninghoff recently made public statements that "My report is not about Freeport and does not contain accusations regarding Freeport." The Bishop also said "Freeport is not at all involved in these violations of human rights." Most recently, even ACFOA's own executive director has retreated from the Freeport allegations, saying that they cannot be verified.

Our true record with regard to the Irianese people is clear. We implement in coordination with the Republic of Indonesia a comprehensive sustainable development program whose individual elements are based on the expressed needs of the people of Irian Jaya. These programs, totalling at least sixteen million dollars annually, bring schools to children who otherwise would not have had any educational opportunity; they provide health care though the construction of hospitals and clinics and reach out even to remote villages with company-supported medical visits. We are battling malaria in the tropical lowlands, both inside and outside our area of operations. These efforts have helped raise life expectancy, reduce infant mortality and dramatically reduce the incidence of malaria in Irian Jaya.

Economic development initiatives, including business incubators, have provided the capital and training for dozens of local entrepreneurs to start their own businesses. In these ways, we have worked to cultivate the well-being of the indigenous people and their future in Irian Jaya. We realize that these complex issues require input from a broad range of perspectives. That is one of the reasons which led to the formation of a Social and Cultural Advisory council-- including distinguished Indonesians, two of whom are from Irian Jaya--to provide expert advice and counsel on the company's efforts to address the social-cultural challenges in Irian Jaya.

These realities stand in stark contract to the numerous quotations in Mr. Bryce's stories from Steven Feld, a former University of Texas anthropology professor, who contends the local Irianese receive no benefits from our operations. It is worth noting that Steven Feld has never been to Irian Jaya, has never seen our operation and has no firsthand knowledge of our relationship with the local Irianese, although he consistently holds himself out to be an expert on these topics.

The other primary focus of Mr. Bryce's articles is the letter from the Overseas Private Investment Corporation (OPIC) purporting to cancel one hundred million dollars in political risk insurance on our Indonesian mining operations. We believe that OPIC--a quasi- government entity that supports U.S. investment abroad through loans, loan guarantees and political risk insurance--lacks a legal basis for its action and that the coverage remains in effect. The dispute has been submitted to arbitration as provided in our contract with OPIC. OPIC said it intended to cancel the insurance because an expansion of Freeport's Indonesian operations has created new concerns about the environmental impact of the mine, including the effects of mine waste or tailings--which are nothing more than crushed native rock. We believe OPIC's concerns are not supported by the facts. We are in compliance with Indonesian environmental regulations and have received all necessary environmental approvals from the Government of Indonesia after detailed review of our operations. Further, the expansion of the mining operation does not violate the terms of the insurance contract, which places no restrictions on the scope of mining activity.

The Company has implemented a variety of waste management programs to limit any environmental risks associated with tailings. Our extensive monitoring shows that the river carrying tailings from the mining operation meets U.S. E.P.A. Drinking Water Quality Standards for metals and that biological activity in the river is comparable to that in other nearby rivers that do not carry tailings. Moreover, our Indonesian operations are currently undergoing thorough environmental and social audits by two internationally respected consulting firms. The results of these audits, expected in the spring of 1996, will be made available to the public. We know of no other company in Indonesia that has undertaken voluntary environmental and social audits in such a cooperative and open fashion.

All of these facts were available to Mr. Bryce, who unfortunately chose to ignore them. We appreciate this opportunity to set the record straight.

Thomas J. Egan
Senior Vice President and
Senior Administrative Deputy to
the Office of the Chairman
Freeport-McMoRan Copper & Gold Inc.
New Orleans