REPUBLIKA.CO.ID, JAKARTA -- The Indonesian Chamber of Commerce and Industry (Kadin) has asked the government to manage the Freeport issues well, so that it would not become counterproductive. "The issue of PT Freeport should be properly managed, in a measured manner, and with a clear target," Deputy Chairman of Kadin for eastern Indonesia affairs Andi Rukman Karumpa said on Wednesday.

According to him, the turmoil between countries and some major corporations such as Freeport is a common one, such as the dispute between Aramco and the Saudi Arabian government in the past. As a result, Aramco fell into the hands of the Saudi government, he stated. "Contract dispute with multinational companies is common, but there should be measurable goals. The volatility is managed, so that it can be more productive in the long run or short term," he noted.

He remarked that Kadin supports the government's firmness against PT Freeport, because the enterprise is considered to have continued stalling its obligation to build smelters in the country. Freeport also left the impression that it always tried to dictate its will on the government. "It (Freeport) met 'stubborn' Minister Jonan who does not want to be dictated," he said.

However, Andi reminded that this issue would be managed well, because it affects the economy in Papua as well. He also noted that Freeport contributed to more than 90 percent of the regional gross domestic product (GDP) of Mimika District and about 37 percent of Papua Province's GDP. "I think the effects of economic and local politics must also be considered. That is why, we hope that the issue should be well managed," Andi said.

Earlier, Deputy Speaker of the House of Representatives (DPR) Agus Hermanto said Freeport, as a mining company operating in the territory of the Republic of Indonesia, must comply with regulations set by the government. "If Freeport wants to export concentrate, it should be through a Special Mining Business Permit (IUPK))," Hermanto added.

He asserted that the DPR supported the government's move to issue a rule requiring changes in the status of the Contract of Work (COW) to the Special Mining Business License (IUPK) for Freeport. Agus, who is a politician of the Democratic Party, said Freeport may not be pleased with such a rule, but the government's actions with regard to Freeport is clearly in accordance with the mining law.

A number of media reports said Freeport strongly rejected the regulation used by the government, namely the Government Regulation (PP) No. 1 of 2017, which requires the divestment of 51 percent and the prevailing tax provisions. Freeport and the Indonesian government will still be discussing this after 120 days. Freeport plans to take the government of Indonesia to the International Arbitration, If no agreement is reached between the two sides.

The vice chairman of the House of Representatives asked the government not to be afraid of facing the threat of the US-based Freeport which intends to sue the Indonesian government. 

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