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| II.
SOCIAL CHANGE AND DEVELOPMENT |
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LAND RIGHTS RECOGNITION PROGRAMS
Under the Indonesian constitution, all unimproved land is, by law, owned by the
government and all minerals belong to the government. PT Freeport Indonesia's
"January Agreement" of 1974 with the Amungme was the first recognition in
Indonesia of hak ulayat, or the right of traditional people to undeveloped land
they used for hunting and gathering. Subsequent to that agreement, the
government formally recognized the right to compensation for hak ulayat land
rights. Compensation in the form of rekognisi, or recognition, is paid to
communities for a release of hak ulayat rights, as hak ulayat is a communal
property right. PT Freeport Indonesia has paid recognition in several instances
over the years through programs mutually agreed upon with the affected local
Papuans and the government.
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Two such multi-year rekognisi
programs in 2003 were:
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The Kamoro Village Recognition Program, a five-year program
compensating for the release of land to the government by
five Kamoro villages in the lowlands, including land used
for the tailings deposition area, cargo dock facilities, the
port and electrical transmission line corridor.
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The Tiga Desa (Three Village) Development Program, a similar
program for three Amungme villages in the highlands. This
program provided additional recognition to the Amungme
living nearest the mine, who had been compensated in the
1974 agreement, for the expanded scope and continuing
success of our operations.
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These two programs provided millions of dollars worth of
infrastructure, social and economic development projects including
housing, school buildings and student dormitories, medical
clinics, places of worship, community buildings, office buildings,
roads, bridges, water tanks, electrical power, motorboats for
transportation and fishing, sports facilities and feasibility
studies for business opportunities.
In addition, the Land Rights Trust Fund for the Amungme and Kamoro
communities was created in 2001 to provide voluntary special
recognition for the holders of the hak ulayat, or traditional land
rights, in the mining area and for the expanded scope and
continuing success of the mining operations. PT Freeport Indonesia
provided $2.5 million initially and annual contributions
thereafter at a current level of $1 million annually, enabling the
Amungme and Kamoro tribes to use some of these funds to purchase
shares in Freeport-McMoRan Copper & Gold Inc., thereby becoming
stakeholders in the mine.
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Nearly half of the
homeowners
in the modern environmental planned community of Kuala Kencana
are indigenous Papuans. |
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SOCIAL AND HUMAN RIGHTS PERFORMANCE AUDIT
Our Social, Employment and Human Rights Policy reflects the
general standards for the social and economic development of the
people within PT Freeport Indonesia's Contract of Work area; the
commitment of the company to the increased employment of native
Papuans, both in number and positions of authority; and the
respect for and protection of the human rights of employees, their
dependents and the local community around our operations. While we
believe we have a strong policy, only effective implementation of
its goals will make it a reality. In 2003, Freeport-McMoRan Copper
& Gold Inc., PT Freeport Indonesia and the International Center
for Corporate Accountability (ICCA) announced that ICCA will audit
our policy, which has been adopted by both companies, to assess
its effectiveness and the extent of our compliance.
During 2003, teams from ICCA traveled to Papua to gather
information to be the basis of benchmarks in a reporting system.
Once the reporting system is complete, ICCA will review it with
our staff to ensure understanding. Following this process, the
formal audit will begin and is expected to be completed by the end
of 2004. ICCA will report its findings to the company, noting
areas where improvements are needed. The company will respond with
a plan to implement these improvements. Both ICCA's report and the
company's response will be made public.
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