Voluntary Principles

The Voluntary Principles on Security and Human Rights serve as guidelines for our security and human rights programs, interactions with host government police and military personnel, and with private security contractors. We have remained active in the Voluntary Principles Initiative since it was first established in 2000 and are currently serving a two-year term on the Voluntary Principles Initiative Steering Committee and Voluntary Principles Association Board of Directors. Our 2016 report includes country implementation details for Indonesia, Peru, and the DRC as these countries represented our higher risk environments in terms of security and human rights.

PT Freeport Indonesia
Security risks near our PTFI operations in Papua, Indonesia stem from the presence of in-migration, separatist activists and advocates in the region, the presence of illegal gold panners in the project area, as well as periodic social and ethnic tensions within the local community and in other areas of the province.

The PTFI Security and Risk Management Department employs approximately 700 unarmed security personnel and approximately 340 unarmed private security contractors and transportation/logistics personnel on a rotational basis. These security arrangements have been necessary to enhance the protection of our employees, contractors, and assets, especially considering the remote and challenging terrain.

In 2016, PTFI updated a Memorandum of Understanding (MoU) with the National Police. The MoU covers a three-year term and details the working relationship between the company and the public security personnel assigned to it, such as areas of support, coordination and commitment to PTFI policies and procedures, including business ethics and human rights. The Voluntary Principles are incorporated by reference and included as an attachment to the MoU.

From the outset of PTFI’s operations, the Indonesian government has looked to PTFI to provide logistical and infrastructure support and assistance because of the limited resources of the Indonesian government and the remote location of and lack of development in Papua. PTFI’s financial support for the Indonesian government security institutions assigned to the operations area represents a prudent response to its requirements to protect its workforce and property, better ensuring that personnel are properly fed and lodged, and have the logistical resources to patrol our roads and secure our operating area. In addition, the provision of such support is consistent with PTFI’s obligations under our Contract of Work, reflects our philosophy of responsible corporate citizenship, and is in keeping with our commitment to pursue practices that will promote human rights awareness. PTFI’s share of support costs for the government-provided security was $20 million for 2016. The supplemental support consists of various infrastructure and other costs, such as food, housing, fuel, travel, vehicle repairs.

Cerro Verde
Like all businesses and residents of Peru, Cerro Verde relies on the Peruvian government for the maintenance of public order, upholding the rule of law and the protection of personnel and property. The Peruvian government is responsible for employing police personnel and directing their operations.

Cerro Verde employs six security employees and approximately 330 private security contractors. Some private security contractors assigned to the protection of expatriate personnel are armed. Cerro Verde also has limited public security forces in support of its operation, with the arrangement defined through an MOU with the Peruvian National Police (PNP). Under Peruvian law, PNP officers may volunteer to be assigned to operations such as Cerro Verde during their regularly scheduled two-week leave. This allows the officers to supplement their government salaries at a rate set by Government. The MoU was last updated in 2016 and details the working relationship between Cerro Verde and the PNP, including areas of support, coordination and commitment to Cerro Verde policies and procedures, including business ethics and human rights. The Voluntary Principles are incorporated by reference. The total cost to Cerro Verde for this support totaled approximately $1 million in 2016. This support is primarily remuneration, but also includes a limited amount for daily bus transportation to and from the mine, food and incidentals.

Tenke Fungurume Mining
TFM faced a number of security and social risks, including those associated with illegal artisanal mining activity in the concession area, a rapid influx of migrants looking for economic opportunities, and political instability. TFM also recognized the risk of instability to the north of its concession potentially impacting the concession area.

TFM employed approximately 320 unarmed security employees and 810 unarmed private security contractors. In addition to these security personnel, the national government assigned 112 members of the Mines Police to the TFM concession area. The Mines Police are a division of the Congolese National Police (PNC) and are responsible for maintaining security in mining concessions throughout the DRC. Since 2008, TFM was a party to a MoU with the Mines Police assigned by the national government to maintain public security in the TFM concession area. The MoU detailed the working relationship between TFM and the Mines Police, including areas of support, coordination and commitment to TFM policies and procedures, including business ethics and human rights. The Voluntary Principles were incorporated by reference and included as an attachment to the MoU. TFM provided food, housing, medical services, supervised transportation, non-lethal equipment and monetary allowances as well as direct payments to the government for the provision of the security assigned to the concession area. The total cost to TFM for this support, including in-kind support, totaled less than $1 million through the date of sale.

Provision of support to host country security personnel in Indonesia, Peru and the DRC is consistent with our obligations under our agreements with the respective governments, our philosophy of responsible corporate citizenship and the Voluntary Principles. We facilitate host government security training on the Voluntary Principles and periodically review our support practices to ensure they are appropriate, lawful and properly controlled.

For further information on the Voluntary Principles on Security and Human Rights, refer to: 2016 Report to the Voluntary Principles Plenary.