Every two to three years, PTFI commissions the University of Indonesia’s Institute of Economics and Social Research to conduct an economic impact assessment of PTFI’s operations. The last study, in 2009, confirmed that the benefits of PTFI’s operations spread far beyond the immediate Contract of Work area, creating a multiplier effect throughout the local and national economy. The study concluded that the multiplier effect of PTFI’s workforce created 227,000 direct and indirect work opportunities in Indonesia, including 128,000 direct and indirect work opportunities in Papua alone.

PTFI also assesses indirect economic impacts that are generated through community economic development programs, such as the Small and Medium Enterprise (SME) Development program. As of December 2011, 139 Papuan-owned SMEs actively received technical assistance and training from PTFI. These businesses provided employment to approximately 1,046 workers (of whom approximately 609 are Papuan) and generated IDR 91.1 billion (equivalent to approximately U.S. $9.8 million) in revenue. In 2011, funding contributed by PTFI to the PTFI Partnership Fund for Community Development, which is managed by the Amungme and Kamoro Community Development Organization (LPMAK), provided additional support to over 1,500 micro businesses that were engaged in a range of services, trade and home industry businesses. These micro businesses in turn generate income, which leads to job creation and stimulates local economic growth within villages providing families with funds to pay for education and health expenses, as well as new investments for their businesses.

In 2011, PTFI and LPMAK had to temporarily suspend certain community development programs as a result of the labor strike, security incidents and vandalism to PTFI property. The prolonged interruption of PTFI and LPMAK’s community development programs adversely impacted some remote communities in the highlands and lowlands. For example, in the highlands, due to the limited availability of helicopter service, PTFI and LPMAK suspended routine transportation assistance to government health officers working in remote areas and to highlands patients seeking emergency care in Timika. In addition, PTFI
and LPMAK’s highland food agricultural development program was suspended and coffee production decreased by approximately 75 percent.

In the lowlands, approximately 268 community members receive medical services per month at the PTFI and LPMAK managed Nayaro clinic. However, due to the restricted road access to this remote area during late 2011, PTFI, LPMAK, and its partners could not implement its routine clinic activities, malaria monitoring, health education or mother and child programs. In addition, 396 employees (255 Papuan and 141 non-Papuan) from 23 Papuan owned businesses, which receive training from PTFI’s SME program, were unable to work as a result of the strike and security situation. Consequently, those employees lost approximately IDR 840 million of income per month during labor disruptions.

PTFI has not yet commissioned an independent third party to measure the impact of the 2011 strike on the communities living in and around the mining operations. However, PTFI and LPMAK, along with its implementing partners, continue to collect program data in the affected areas where possible. Local inflation rates, which may be impacted by PTFI worker compensation increases, will continue to be monitored.

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