TEMPO.CO, Jakarta - The Supreme Audit Agency (BPK) said that Freeport Indonesia has committed six environmental violations in Papua, following an audit of the company’s contract of work for the 2013-2015 fiscal year.
The BPK revealed that Freeport has caused environmental degradation by dumping its waste to forests, rivers, estuaries and the ocean, that might have caused Rp185 trillion in damages.
“The figure was calculated by the Bogor Agricultural University which was studied by the BPK in relation to the state finance,” the BPK chairman Moermahadi Soerja Djanegara told Tempo yesterday.
Moermahadi revealed that the findings were based on an analysis and evaluation of data collected from various sources. Below is a list of violations committed by Freeport.
1. The use of 4,535.93 hectares of protected forest.
Freeport had not secured a borrow-to-use permit for the 2008-2015 term. The mining activities had violated Law No. 41/1999 and Law No. 19/2004 on Forestry. The potential state losses amounted to Rp270 billion in the form of unpaid non-tax revenue.
2. Overpayment of Freeport reclamation guarantee
BPK found an overpayment of reclamation guarantee amounting to US$1.43 million or Rp19.4 billion using the Bank Indonesia middle rate as at May 25, 2016. BPK views that the funds should have remained in the government’s coffers.
3. Underground mining without an environmental permit
Freeport carried out underground mining without an environmental permit. Its environmental impact analysis approved in 1997 did not cover underground mining.
4. Freeport mining activities caused environmental degradation
Freeport mining activities caused environmental degradation as it dumped operational waste to rivers, estuaries and the ocean. The government had failed to prevent such degradation as Freeport continued its production to 300,000 tons. The potential state losses were Rp185 trillion.
5. Freeport had not pay post-mining obligations for 2016 to the government
It caused potential state losses worth US$22.29 million or Rp293 billion.
6. Lack of government oversight
The Energy and Mineral Resources Ministry and Environment and Forestry Ministry failed to oversee land subsidence due to underground mining. The potential state losses caused were Rp185.56 trillion.