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Social & Human Rights Performance Audit |
| Social and Human Rights Performance Audit |
| Our Social, Employment and Human
Rights Policy reflects high 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. We recognize that effective
implementation of our policy is required for its goals to be
met. Freeport-McMoRan Copper & Gold Inc. and PT Freeport
Indonesia retained the International Center for Corporate
Accountability (ICCA) to conduct a comprehensive audit of the
effectiveness of our policy and the extent of our compliance. During 2004, representatives from ICCA traveled to our operations in Papua to gather both quantitative and qualitative data for the audit report. Operational areas included were security, human resources, industrial relations, training, and social and educational programs. Over 400 interviews were conducted with employees to ascertain their understanding of the policy and their perceptions of PT Freeport Indonesia’s compliance with the policy. Based on the extensive data collected, ICCA reported its findings to the company in 2005. Their findings and the company’s response were made public and are available on the ICCA web site (www.icca-corporateaccountability.org). The audit confirmed that all potential human rights violations noted in the audit have been reported to the appropriate authorities and addressed in accordance with our human rights policy. None of the reported human rights violations involved activities of PT Freeport Indonesia’s security personnel, its other employees or the security personnel of the Government of Indonesia assigned to the protection of our operations and employees. The reported incidents fell within the realm of criminal acts and were dealt with accordingly. The audit said PT Freeport Indonesia’s human rights training programs are “carefully articulated and well suited” to the operating environment, yet pointed out that many employees still do not adequately comprehend concepts and applications of human rights. As a result, the company has taken steps to improve the effectiveness of its human rights training programs and appointed a Senior Human Rights Compliance Officer to oversee implementation of these training programs. ICCA’s report confirmed that PT Freeport Indonesia has fulfilled or exceeded its commitments to increasing the number of Papuan employees in the workforce as well as its commitments to the local community through social development programs. However, the audit also noted that the company faces challenges in the future in continuing to meet its commitment on Papuan hiring and found significant shortcomings in the educational programs carried out with the company’s Freeport Partnership Fund for Community Development (see next section). In response, PT Freeport Indonesia has implemented new initiatives in the development of Papuan employees, including mentoring and enhanced training, and is working with local educational authorities to improve the quality of basic education available in local communities. An important benefit of the audit has been that this process has provided a framework for the future for PT Freeport Indonesia to evaluate its performance in delivering on its commitments. The company has designed and implemented new operational procedures, management systems, performance evaluations and accountability measures to improve performance in those areas identified by ICCA as requiring improvement. In 2006, PT Freeport Indonesia engaged ICCA to conduct a follow-up to the original audit. This included assessment of our implementation of recommended changes identified in the first phase of the audit, as well as assessing company-funded healthcare programs and the compliance of major contractors and privatized partners with the company’s Social, Employment and Human Rights Policy. The follow-up report is to be issued in June 2007. |
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