By its nature, mining creates impacts on local communities. Working with local stakeholders, we implement mitigation measures for unavoidable adverse impacts and seek to maximize the delivery of positive, lasting social benefits. 

We engage with local stakeholders and their legitimate representatives throughout project lifecycles to build relationships and the trust needed to create shared benefits. Our Community Policy mandates engagement and collaboration with local communities to minimize and mitigate unavoidable adverse impacts while maximizing opportunities to deliver value from our presence. 

CommunitiesOpen, transparent and regular engagement with a wide range of local stakeholders builds our understanding of their interests and concerns, encourages communities to provide input into our operations and development projects and promotes understanding of our business. This helps reduce risks to our operations and our ability to deliver on our community development and engagement plans. Open communication and dialogue with local stakeholders and their representatives take a number of forms – formally  through open house meetings linked to regulatory processes, informally through interactions with our community development specialists in the field and via community partnership panels, community investment funds or foundations and targeted capacity building efforts. 

 

PHOTO DESCRIPTION: (top) Cerro Verde is celebrating the 10 year anniversary of the Uchumayo nursery, an innovative research and training center with doors open to students and the general public. The non-profit nursery has supplied over 800,000 seedlings of various native species for reforestation efforts in Arequipa. (bottom) With a social investment from El Abra, 28 families in the indigenous village of Cupo now have access to clean, running water.

Assessing and Managing Impacts Community Grievance Mechanisms

We implement Environmental and Social Impact Assessments before greenfield or brownfield expansion projects. These assessments identify potentially affected stakeholders and their representatives, as well as potential impacts from the outset, and provide a framework for developing both stakeholder engagement and mitigation plans. Many of our operations use baseline assessment tools to help identify community needs and provide a baseline against which we can measure our performance over time. Our active mining sites have mine closure plans that specify measures for managing environmental impacts at the end of mine life, while our ongoing community investment programs aim to build community and individual capacity for sustainability post-closure.

Indonesia
In 1997, PTFI completed an Environmental Impact Assessment (AMDAL) in compliance with Indonesian regulations and the company’s policies and practices on management of the environmental and social impacts of our operations. The AMDAL, which describes PTFI’s management plans for environmental and social impacts, was approved by the Government of Indonesia. PTFI’s Environmental and Community Affairs departments compile data and program results for related quarterly Environmental Planning and Monitoring Reports submitted to the Government of Indonesia. 

Acceleration of sedimentation in the Ajkwa River estuary due to an increase in PTFI production was identified in the 1997 AMDAL. As predicted, sedimentation affects access through estuary waterways and inhibits community members’ ability to maintain traditional economic and livelihood activities. PTFI’s multi-stakeholder approach to mitigating sedimentation impacts includes both a water transportation program and economic development activities aligned with Kamoro culture.  The water transportation program  includes an integrated passenger boat and bus service, which was developed in consultation with community members to determine optimal routes and schedules.

The program provides regular transportation services between coastal villages to the east of the tailings deposition area and access to healthcare, education and economic trade facilities in the Timika region. PTFI receives and responds to grievances from community members regarding increased sedimentation that impacts local transportation routes and certain economic activities, including four in 2018.

In 2017, PTFI’s Levee Extension project resulted in the closure of the Minajerwi channel and Muamiua river historically used by local communities. Channel closure, as with sedimentation, had a negative impact on transportation access routes and local community economic/livelihood activities. In continuation of its mitigation measures, PTFI focuses on expanding existing partnerships with key stakeholders from government, religious institutions and local communities who jointly identify long-term solutions for communities impacted. Programs developed through this partnership emphasize strengthening indigenous livelihoods, building economic capacity, improving market access and establishing public transportation with government collaboration. Current initiatives include the establishment of an economic and transportation hub in Otakwa village in collaboration with the Mimika government, support for the establishment of an Integrated Center for Marine and Fishery Activities and an increase in water transportation access for communities located east of the current network. PTFI, in partnership with the Catholic Church, also provides village economic development programs aligned with Kamoro culture, including Tiga-S (sagu/sago, sampan/boat and sungai/river) that strengthen indigenous livelihoods. Refer to the Economic Impacts section for information on these programs.

Indigenous Peoples

Our local stakeholder engagement and social investment objectives include formal interactions with indigenous peoples in Papua, Indonesia, Native Americans in the United States, and the traditional communities of Alto El Loa in Chile. Through community engagement, cultural promotion and preservation projects, as well as training and development programs, we seek to address needs while being sensitive to cultures and customs of indigenous peoples near our operations. Engaging with groups focused on indigenous peoples rights at the local, national and international levels also is important for sharing information about approaches to effectively engage with indigenous peoples in diverse geographies. 

We adhere to the ICMM Position Statement on Indigenous Peoples and Mining. The statement sets forth an obligation to work to obtain the consent of indigenous peoples for new projects that are located on lands traditionally owned by or under customary use of indigenous peoples. Additional commitments address engaging indigenous peoples, understanding their rights and interests, building cross-cultural understanding, agreeing to processes for consultation and engagement, and participating in decision-making.

United States
Indigenous peoples

In the U.S., we continue to build on our relationships with federally recognized Native American Tribes in the southwest, including the Hualapai Tribe, the San Carlos Apache Tribe, the Tohono O’odham Nation and the White Mountain Apache Tribe. We are engaging tribes that have historically occupied areas near our operations and those with ancestral connections to these lands. We are also evaluating how free, prior and informed consent fits within established regulatory processes in the U.S. 

We also engage with the Yavapai-Apache Nation and the Navajo Nation, who are key participants in the remediation of legacy sites in Arizona, New Mexico, Utah and the Four Corners region.  Several of our legacy sites are located on Indian reservation lands and are tribally occupied and under tribal control. Local, transparent, and consistent engagement with these Nations is key to fulfilling our remediation obligations.    

By engaging with the tribes and co-designing initiatives to meet mutual needs, we have been able to further advance our Native American Partnership Fund, Community Activities Contributions and Scholarship Program. Over the last five years, 243 college scholarships have been awarded to tribal members through our Native American College Scholarship Program. An additional 32 women entrepreneurs from our partnership tribes have been trained to start or grow small businesses on their respective reservations through Project DreamCatcher, a one-week, small business training program for women. Our technical training institute for tribal members interested in pursuing jobs in mining and related industries continues to be a mutually beneficial program, training 1,272 tribal members and placing 326 in trade jobs over the past five years. In 2018, we increased our engagement with the Yavapai-Prescott Indian Tribe, Fort McDowell Yavapai Nation and the Hopi Tribe. We look forward to expanding our relationships with additional Federally recognized Tribes in the U.S. 

In 2018, we supported the development of a Cultural and Heritage Tourism Micro Master Plan for the White Mountain Apache Tribe, which identifies local tourism opportunities to generate revenue for the Tribe.  We also supported the Tohono O’odham Nation’s environmental protection training and the Brownfields Tribal Response Program, which will assist the Nation in managing environmental programs unique to their reservation lands. Additionally, we supported the Tohono O’odham Nation’s San Xavier Co-op Farm, which aims to increase access to healthy foods and increase production of traditional food crops while increasing the organization’s access to urban markets. 

During the year, we supported the establishment of a recreational area in a remote part of the Navajo reservation where the next nearest recreational facilities are located 145 miles away. The company also invested in providing Yavapai and Apache language instructional books to support Native language use among the youth of the Yavapai-Apache Nation.  Through a cooperative agreement with our Sierrita operations and local Tohono O’odham Nation, Tribal Members accessed company land to harvest plant sources to support their cultural heritage, traditional customs, and traditional diet. Opportunities to engage in these types of cultural events exceed U.S. regulatory requirements and have evolved from years of  transparent relationships with tribal communities.freeport in my community

 

For more information about our community programs please visit: freeportinmycommunity.com

 

 

Chile
Indigenous peoples We continue to evaluate a large-scale brownfield expansion opportunity at our El Abra operation in Chile, where we maintain relationships with indigenous communities. As we advance studies to determine the scope and timing of the project, we are committed to respecting the rights, interests, aspirations, culture and natural resource-based livelihoods of these indigenous communities in project design, development and operation. We seek to achieve their free, prior and informed consent where significant adverse impacts are likely to occur, and capture the outcomes of engagement and consent processes in agreements or resolutions.

In Chile, our El Abra mine operates in close proximity to Alto Loa, which is comprised of 11 indigenous communities. Collaboration with existing communities and early engagement with two additional indigenous communities located near the potential expansion project’s power and water corridor continued in 2018, resulting in changes of the corridor route to an alternative proposed by both communities. Further engagement with eight additional indigenous groups in Calama, including the Indigenous Women’s Association and the Indigenous Traditions and Customs Alto El Loa Association Lickan Antay, was advanced, which allowed El Abra to better understand the communities’ relationship with the region. 

To complement the Indigenous Peoples Employment Program established in 2017, El Abra implemented a new apprenticeship program to provide work experience to students who have completed post-secondary education. Seven communities currently participate in the Indigenous People Employment Program and by the end of 2018, more than 50 positions had been filled by members of neighboring communities.

A Protocol for Early Participation was agreed upon with the Conchi Viejo, Ascotán and Ollagüe communities to enable an early consultation process associated with the potential El Abra expansion project. The Protocol involved a community participatory monitoring program related to the Environmental and Social Impact Assessment (ESIA) baseline studies.  The Protocol included three community training workshops to help potentially affected stakeholders understand environmental and social impact assessment and regulation in Chile.  Community members were provided advisory support from experts so they are  better equipped to understand baseline results and  assess potential impacts as well as associated mitigation measures. During 2018, the community of Conchi Viejo actively participated in training sessions and the review of baseline studies which continue in 2019 as work progresses on the impact assessment and mitigation measures.  In the Chug Chug area, 13 community members were hired as biodiversity monitors, nine as archeology monitors and five for water quality.

El Abra continued implementation of the Environmental Management Plan for  the Ascotan Salt Flat by working with the Ascotán and Ollague communities.  More than 50 days of fieldwork resulted in planting 27,000 native flora seeds and a vegetation coverage increase of 33 percent in the Salt Flat.

El Abra’s cooperation agreement with the Taira community continued to advance social programs including indigenous recruitment and employment, postsecondary scholarships, internships and basic infrastructure repairs. The construction of a church in Taira, a key project of importance to the community, reached 70 percent completion,  and three community members were hired by El Abra.

El Abra completed an anthropological study with the Conchi Viejo community to gain a better understanding of the community’s cultural heritage and historical ties to their ancestral home located within the mine’s operational area. The study identified three cultural heritage sites critical to the identity of the community, including the village church, which was identified as the most important. The results of the study will assist El Abra and the community in working together to preserve cultural heritage for current and future generations.

In 2017, El Abra updated its employment application process tailored to neighboring indigenous communities with the goal of raising awareness of employment opportunities. El Abra also committed a number of positions to be filled by indigenous community members. Designated positions are open to the broader public only if the company is unable to fill these positions with qualified indigenous community members. In 2018, the site implemented a trainee/apprenticeship program to provide work experience to indigenous students who have completed post-secondary education. Seven communities currently participate in the Indigenous People Employment Program. At year-end 2018, more than 50 positions had been filled by indigenous community members.

Since 2013, more than 300 entrepreneurs in the El Loa province have graduated from Dreambuilder, our online women’s entrepreneurship training program. In 2018, 92 participants from the communities of Calama, Maria Elena, Tocopilla and Ollague graduated from the program. A DreamBuilder Entrepreneurship Fund was established in 2017 to further drive local economic development in the Antofagasta Region and provide graduates with the capital needed to advance their businesses. Ten women-owned businesses - ranging from agricultural and mining services to restaurants, artisanal craft stores and tourism services - were selected as award recipients.

Indonesia
Indigenous peoplesIn Papua, Indonesia, a culturally diverse region, PTFI has engaged with indigenous Papuan tribes for decades, including through multiple formal agreements that promote workforce skills training as well as health, education and basic infrastructure development. PTFI has financed several books documenting the social uniqueness of the Amungme and Kamoro tribes. PTFI also collaborates with an NGO focusing on the preservation and promotion of Indigenous art through regular exhibitions, school visits, and support for art festivals around Indonesia. 

PTFI continues to work with Kamoro community members to review and mitigate the impacts of the Levee Extension project, which helps us meet the requirements of the Environmental Impact Assessment approved by the Government of Indonesia that tailings remain with the Modified Deposition Area (ModADA). PTFI’s multi-stakeholder approach includes both a water transportation program and economic development activities suited for Kamoro culture. Under the program, developed in consultation with village members, PTFI operates an integrated passenger boat and bus service to provide regular transportation services between coastal villages to the east of the tailings deposition area as well as access to health care, education and economic trade facilities available in the Timika region to the west. PTFI works with the Kamoro to strengthen economic activities and support increased production and marketing of local commodities. This includes a fisheries program, which PTFI supports in partnership with the Catholic church; the introduction of cocoa as a cash crop and a karaka (mangrove crab) aquaculture program for Kamoro youth. PTFI also collaborates with the Mimika government to develop a coconut plantation in Manasari and is working with Kamoro community members to reinvigorate a sago plantation in Nayaro.

These programs support alternative income sources for Kamoro community members. For more information, refer to the Assessing and Managing Impacts section.

PTFI also is collaborating with the Ministry of Transportation and the Mimika Transportation office to add a transit stop to the existing Pomako-Agats-Pomako ferry route in Otakwa. Affected communities are consulted throughout the planning and implementation processes to help determine the most optimal routes and schedules with the goal of continuously improving livelihoods through sustainable community development activities. As a result, the Mimika Government has committed to add Otakwa to the route and to provide water taxis, which will commute between Otakwa, coastal and inland villages in the Manasari area. Once in operation, inhabitants east of the current network will have water taxis and ferry access to Timika and other regions in the west.

PTFI's "1974 January Agreement" with the Amungme was a recognition of the Indonesian concept of hak ulayat, or the customary right of indigenous people to land they traditionally used for hunting and gathering. Subsequent to that agreement, the Government of Indonesia formally recognized the right to compensation for hak ulayat (customary land rights).

In 1997, PTFI signed a Memorandum of Understanding (MoU) for the implementation of the Kamoro Village Recognition Program in Nayaro, Koperapoka, Nawaripi Baru, Ayuka and Tipuka that recognized the Kamoro’s hak ulayat in lowland areas and the coastal zone where PTFI developed its tailings deposition area, cargo dock facilities, port and electrical transmission line corridor. Under the program, PTFI constructed over 400 houses as well as roads, bridges, churches, schools, clinics, government buildings, clean water facilities, power installations and drainage systems. PTFI fulfilled its commitments under the MoU in 2009, and the infrastructure has since been handed over to the government, local churches and local communities.

In addition, PTFI created land rights trust funds for the Amungme and Kamoro tribes in 2001 to provide voluntary special recognition for the holders of hak ulayat. The company has contributed approximately $57 million to these funds through 2018. These agreements also were formalized via a MoU and stemmed from the creation of the Forum MoU 2000, a stakeholder body focusing on socio-economic resources, human rights, land rights and environmental issues. The Forum consists of representatives of the Amungme and Kamoro Tribal Councils and PTFI.

PTFI has sponsored research and publication of a series of books on indigenous Papuan cultures, including “Introducing Papua,” “Highlands of Papua” and “South Coast of Papua.” The Amungme and Kamoro Community Development Organization (LPMAK), which manages the Partnership Fund, also has published two books – one on Amungme and Kamoro folklore and another on traditional music. Refer to the Land Use and Customary Rights section for more information on indigenous peoples.
 

PHOTO DESCRIPTIONS: (top) Through a cooperative agreement with the local Tohono O’odham Nation, tribal leadership and members of the company’s Native American Affairs Division harvest plants at our discontinued Bisbee Operation in support of traditional customs. (middle) A book documenting the customs and traditions of the indigenous community of Chiu Chiu recently was published as a means to help preserve its cultural heritage. The publishing, with financial support from El Abra, followed a year of community-led research. (bottom) The Freeport Partnership Fund for Community Development in Indonesia provides access to education for more than 480 indigenous children from remote areas to schools such as the Taruna Papua School and Dormitory near Timika shown above. Since inception, the partnership fund has provided over 11,000 scholarships to Papuan students.

Land Use and Customary Rights

It is our policy to comply with host country laws regarding land and customary rights, from exploration to closure. Our site-level community grievance mechanisms are tailored to local cultures so that issues raised by community members are documented and responded to appropriately and in a timely manner. When community members report a claim or grievance regarding land use or customary rights, we work with local authorities to investigate the claim or grievance with the goal to reach a mutually acceptable agreement within the existing legal framework of the host government.

Community grievances typically are received by Community Liaison Officers (CLOs) in the field, through engagement at established company/community forums, in physical drop boxes, or via local hotlines. Regardless of how grievances are received, they are reported to the site Community Grievance Officer, who relays the grievance to the relevant department. CLOs help investigate grievances and work with community members and their legitimate representatives to address  concerns, solve problems and mitigate impacts before they escalate. For grievances with the potential for significantly adverse community impacts, company management is involved and appropriate government authorities are engaged as needed.

Indonesia

Land Use

The PTFI project area is located where indigenous peoples of Papua hold customary land rights. Specifically, the Amungme in the highlands and the Kamoro in the coastal lowlands are considered traditional landowners of the area, along with the Dani, Damal, Moni, Mee, and Nduga. All land used by PTFI has been legally and formally released by the customary land owners through the local government for use by the company through a Contract of Work with the Government of Indonesia. The Indonesian government granted PTFI an IUPK to replace its former COW, enabling PTFI to conduct operations in the Grasberg minerals district through 2041.  Please see Freeport-McMoRan’s 2018 Annual Report on Form 10-K for more information.

PTFI's "1974 January Agreement" with the Amungme was a recognition of the Indonesian concept of hak ulayat, or the customary right of indigenous people to land they traditionally used for hunting and gathering. Subsequent to that agreement, the Government of Indonesia formally recognized the right to compensation for hak ulayat (customary land rights). Compensation in the form of rekognisi (recognition) is paid to communities for a release of hak ulayat, as hak ulayat is a communal property right. Such payments are made in the form of mutually agreed projects or programs benefiting the communities. PTFI has paid recognition over the years through programs mutually agreed upon through consultation and guided by the laws of the Government of Indonesia. 

In the highlands, the Amungme’s hak ulayat is recognized by PTFI through a Memorandum of Understanding (MoU) signed in 2000 for the implementation of the Tiga Desa (Three Villages) Program in the villages of Wa’a Banti, Aroanop, and Tsinga. Under the MoU, PTFI committed to constructing housing and public facilities such as bridges, airstrips, roads, churches, sewage systems, and markets. Certain infrastructure development commitments under the MoU remain in progress. 

In 1997, PTFI signed a MoU for the implementation of the Kamoro Village Recognition Program in Nayaro, Koperapoka, Nawaripi Baru, Ayuka and Tipuka that recognized the Kamoro’s hak ulayat in lowlands areas and the coastal zone where PTFI developed its tailings deposition area, cargo dock facilities, port, and electrical transmission line corridor. Under the program, PTFI constructed over 400 houses as well as roads, bridges, churches, schools, clinics, government buildings, clean water facilities, power installations, and drainage systems. PTFI fulfilled its commitments under the MoU in 2009, and the infrastructure has been handed over to the government, local churches and the community. 

In addition, PTFI created land rights trust funds for the Amungme and Kamoro tribes in 2001 to provide voluntary special recognition for the holders of the hak ulayat. The company has contributed approximately $57 million to these funds through 2018. These agreements were formalized via a MoU, and that stemmed from the creation of the Forum MoU 2000, a stakeholder body focusing on socio-economic resources, human rights, land rights and environmental issues. The Forum consists of representatives of the Amungme and Kamoro tribal councils and PTFI.

In 2018, PTFI recorded ten formal land rights grievances from members of the indigenous Papuan communities, including claims over land use and compensation requested for past land use agreements. Four were grievances related to the Grasberg mine area, four were related to Kuala Kencana and surrounding area, and two were grievances emanating from a Kamoro group. PTFI received and processed these community grievances through its community grievance mechanism. In response to land rights grievances, PTFI coordinated with local Mimika government authorities to investigate claims and then worked to reach agreement within existing legal frameworks. A 2014 land rights mapping study conducted by Cenderawasih University continues to assist the Amungme traditional council (Lemasa) and PTFI in mediating conflicts over land rights claims in highland areas. Refer to the Indigenous Peoples section for more information.

Resettlement

We are committed to respecting the human rights of community members and, when unavoidable, conducting community resettlement activities in alignment with international best practice. This commitment is reflected in our Community Policy and Human Rights Policy. We did not have any resettlement activities in 2018.

PHOTO DESCRIPTION: In the highlands, the Amungme people’s land rights are recognized through an MoU for the implementation of the Tiga Desa (Three Villages) Program. The new airstrip in the remote village of Aroanop, is the second airstrip built by PTFI in the highlands and it improves community accessibility to services and economic opportunities in the Mimika Region. 

Community Investment North America  |  South America  |  Indonesia

Community Investment

Freeport-McMoRan’s community investment strategy addresses high-priority needs and facilitates local capacity–building with the goal of enabling community wellbeing, resiliency, and sustainability. We are increasingly focused on investing in the “sustainability of people” – providing the skills and opportunities individuals need to reach their full potential and play a progressively active role in the prosperity of their own communities. Through our active engagement and capacity building efforts, we work with stakeholders to understand what contributes to community welfare, such as health, interconnection, learning, attainment, growth, economic opportunity, affordability, and financial security. By understanding more about what makes our communities thrive, we can work together to deliver more impactful investments. 

In partnership with communities and local governments, many of our social investment programs align with and advance the United Nations Sustainable Development Goals (SDGs) or help mitigate impediments to their realization, particularly the Goals of Good Health and Wellbeing (SDG 3), Quality Education (SDG 4), Gender Equality (SDG 5), Clean Water and Sanitation (SDG 6), and Decent Work and Economic Growth (SDG 8). 

In addition to direct community investment from individual operations and the Freeport-McMoRan Foundation, we have established community trust funds or foundations in Chile, Indonesia and the U.S. We maintain established Community Investment Funds for communities near our operations and a Native American Partnership Fund for tribal communities in the U.S. These funds are typically managed by community members who determine the allocation of resources to priority programs that strengthen the foundational elements of sustainable communities, including education, health, economic development and the environment.

With most of our mining operations located in rural and remote areas, Freeport-McMoRan maintains a significant focus on supporting efforts aimed at building capacity and increasing economic diversification to reduce dependency on our presence. This includes building a foundation of resiliency during times of commodity market fluctuations as well as a post-mining future. 

The company invests significantly in supporting development of small businesses and the ecosystems critical to their success. The centerpiece of this work is “DreamBuilder – The Women’s Business Creator,” our online entrepreneurship education and training program for women who want to start or grow their own small business. Now in its 9th year, we continued to expand and engage women in the U.S., Chile, Peru and beyond. Since inception, over 40,000 women across 65 countries have relied on DreamBuilder to equip them with the resources needed to become financially independent business owners. Further, Freeport-McMoRan’s Financing Your Dream companion course helped women create Capital Action Plans to identify and secure funding needed to start and sustain their businesses. The latest survey indicates approximately 56 percent of participants have increased sales, 34 percent hired additional employees, and 66 percent pay themselves a salary (as compared to only 18 percent who did so prior to DreamBuilder). DreamBuilder was recently selected to be the centerpiece program of the U.S. Department of State Bureau of Education and Cultural Affairs newly launched Academy of Women Entrepreneurs initiative.  The program will be translated into French and Portuguese, and U.S. Embassies in 24 new countries across the globe will promote and implement the program. A three-year longitudinal study conducted by Arizona State University’s L. William Siedman Research Institute is underway to determine DreamBuilder’s impact on women, their families and the accretive revenue generated for community-level development. 

As part of a “G5 Collective”, a coalition of multi-sectoral partners, we have committed to invest a minimum of $5 million to implement additional activities focused on women’s empowerment in Chile, Peru, Indonesia and the U.S. by 2021. Members of the Collective are working to advance SDG 5, particularly focused on women’s economic participation, addressing violence against girls and women, and advancing female leadership in the private and public sectors. As part of this effort we embarked upon a new partnership with Vital Voices (VV) to develop a Fellowship program to support women’s leadership in public life. The VV Engage Program was launched in 2018, and the first cohort of 25 women Fellows from across the globe, including countries where we operate, was established. 

In Indonesia, PTFI has committed to provide one percent of its annual revenue for the development of indigenous Papuan communities through the Freeport Partnership Fund for Community Development. The Amungme and Kamoro Community Development Foundation (LPMAK) is the Papuan community organization that oversees disbursement of these program funds. LPMAK is governed by a Board of Commissioners and a Board of Directors, both comprised of representatives from local Amungme and Kamoro communities, local government, Papuan regional leaders, church leaders, and PTFI. PTFI’s contribution to the Partnership Fund was $55 million in 2018 and over $790 million since its inception in 1996. In 2018, PTFI and LPMAK signed an agreement extending the funding arrangement between the two organizations through June 2019. PTFI also initiated a process to convert the structure of LPMAK into an Indonesian foundation, a process expected to be completed by the end of 2019. During the transition, the Partnership Fund will continue to be capitalized with no interruption in implementation of approved health, education and economic development projects and programs. Once the transition is complete, a new Board structure and composition will strengthen the long-term effectiveness of the PTFI’s social investments with a goal that the new foundation will achieve financial self-sufficiency before mine closure.
 

community

PHOTO DESCRIPTION: Students take an educational tour of the Uchumayo nursery, an innovative research and training center managed by Cerro Verde.

Economic Impacts  North America   |  South America   |  Indonesia

community

community

Note: These amounts were derived primarily from Freeport-McMoRan's publicly reported segment data, including amounts for oil and gas operations. For disclosure of Freeport-McMoRan's segment data in accordance with generally accepted accounting principles (GAAP), see Freeport-McMoRan's 2018 Form 10-K, pages 166 – 170. 
a.  Includes parent company results.
b.  Excludes employee payroll taxes, dividends, property taxes and certain other taxes, which are included in payments to suppliers and dividends. A reconciliation to the 2018 Cash Payments to Governments schedule on page 18 can be found here.
c.  Includes costs for capital projects, i.e. additional payments to suppliers, employee wages and benefits, payments to providers of capital and payments to governments, not included in the table above.

community

Local Suppliers

Our global operations provide significant direct and indirect economic impacts when we purchase supplies and services in local economies. When we purchase locally, we provide the stimulus for community development and the potential for capacity building.

 
PHOTO DESCRIPTION: El Abra Operations in Chile

Public Health

Malaria, HIV/AIDS and tuberculosis remain the most common infectious diseases that impact not only communities near our Indonesian operations but also our workforce and their dependents. Recently, non-communicable diseases, principally cardiovascular diseases, diabetes, obesity, cancers and chronic respiratory diseases, also have become emerging threats to our local communities. 

In coordination with the local government and NGOs, the PTFI Community Health Development department, assisted by the company’s medical services provider, International SOS, implements programs for education, prevention, counseling, diagnosis and treatment of diseases within and around the project area. This includes a comprehensive public health program addressing HIV/AIDS, TB, malaria, mother and child health, and clean water.

In 2018, PTFI invested approximately $7.2 million in community public health programs. In the same year, the Amungme and Kamoro Community Development Organization (LPMAK) directly contributed $8.1 million to community health-care programs, both within and outside the PTFI project area. This included the operation of the community hospital in Timika and clinics in both the surrounding lowland villages and the Wa’a Banti villages in the highlands.

Together, PTFI and LPMAK’s community health-care programs support our commitment to the Sustainable Development Goals, particularly SDG 3 on ensuring healthy lives and promoting well-being for all. Many of the programs also support SDG 17 on partnerships for the goals.

Malaria
CommunityPapua province, in general, and Mimika Regency, where PTFI operates have the highest malaria prevalence rates in Indonesia. In almost every local community within our project area, malaria infection is the single greatest cause of morbidity and hospitalization. Coping with rapid population in-migration and growth is one of the biggest challenges for reducing the incidence of malaria in Mimika. Although declining, the health risks to PTFI’s workforce and surrounding local communities remains a concern. In response, PTFI continues to implement its integrated malaria control program focused specifically in the more urbanized areas of Timika.

Since 2013, PTFI, LPMAK and the local government jointly have operated the Mimika Malaria Center and its Timika Malaria Control Program (TMCP). TMCP coordinates all malaria prevention activities, such as indoor residual spraying of insecticides in homes, and bed net distribution among the PTFI workforce, their families and local communities. TMCP activities have resulted in reduced malaria incidence through significant expansion of coverage, improved coordination, surveillance and reporting of malaria data. In 2018, approximately 75,000 people in local communities were reached through malaria health promotion events. In addition, the malaria incident rate within the workforce stood at 82 per 1,000 – a 50 percent reduction from 2017. The number of detected cases of malaria at participating community clinics fell to just under 5,000 in 2018, nearly 61 percent less when compared to 2017. All 5,000 cases were effectively treated. As multi-drug resistance in malaria parasites is a significant challenge in Papua, all detected malaria cases are effectively treated with artemisinin.

HIV/AIDS
HIV/AIDS prevalence in Papua and Mimika Regency is predominately characterized by heterosexual transmission, with the greatest impact being on the indigenous Papuan population. PTFI continues to implement its HIV/AIDS prevention, outreach and treatment programs for its workforce and community members in collaboration with the local government health services. Results during 2018 were encouraging, with HIV/AIDS incidence in the workplace falling to 1.7 cases/1,000 –  a 29 percent decrease over 2017 – and the number of new detected cases falling 24 percent compared to 2017. Over 11,000 employees participated in HIV/AIDS-themed educational programs in 2018, and PTFI’s education and outreach activities reached approximately 47,000 community members.

PTFI consistently improves its HIV/AIDS Voluntary Counseling and Testing (VCT) service performance. In 2018, over 21,000 PTFI employees participated in VCT. Due to efforts to increase VCT uptake, PTFI is diagnosing HIV cases at an early stage, before AIDS-related complications arise. Antiretroviral therapy is provided free of charge by the Indonesian government to HIV positive cases among PTFI’s workforce as well as among community members. Early diagnosis provides individuals an opportunity to receive proper treatment that leads to a healthy life as well as helps prevent transmission of HIV to others.

PTFI also provides confidential HIV/AIDS VCT services for community members at all three PTFI-supported community clinics as well as at the Sexual Health and HIV Clinic in Timika operated by PTFI in partnership with the local government and LPMAK. In 2018, PTFI provided VCT to over 2,500 individuals from local communities.

Tuberculosis
The World Health Organization (WHO) still ranks Indonesia, including Papua, as having the second largest number of TB cases in the world. PTFI continues to implement its comprehensive TB program for both its workforce and surrounding communities. In 2018, PTFI continued its intensive TB outreach efforts in response to high-prevalence rates in Mimika Regency. The company organized one-on-one and group sessions that reached over 1,200 community members in 2018. Through active case detection, PTFI staff reached out to approximately 500 individuals who were in close contact with TB patients in the community, providing them with testing and TB education information. TB outreach events, such as World TB Day, reached approximately 5,500 community members and over 11,000 PTFI workforce members.

The PTFI TB Clinic located in Timika, which is operated in collaboration with the local government and LPMAK, follows the WHO’s recommended Directly Observed Treatment Short-course (DOTs) approach for active case detection and treatment of new TB cases. Among the 1,224 people tested for TB in 2018, 119 new TB cases were detected in the community and 68 new TB cases were detected in the PTFI workforce.

LPMAK Funded Health Programs
CommunitySince 2016, LPMAK has financed a floating medical clinic program to provide remote coastal communities with basic health services. The villages served by the Floating Clinic are located east of the project area and only accessible by river. The program enhances the level of care available through government-funded primary health-care centers by offering more complete diagnostic equipment and drug/non-drug services to assess and treat patients. The Floating Clinic is equipped with a patient treatment room, an operation room for minor injuries and several other health-supporting facilities. Services provided through the Clinic complement those of the health-care centers and other locally-based health organizations. Since 2016, the Floating Clinic has provided medical services and guidance to approximately 20,000 people in four districts. In 2018, 3,645 people received general medical treatment.

LPMAK’s contribution to community health-care programs also included an investment of approximately $690,500 toward a Healthy Villages Program. This program for 20 highlands and lowlands villages focuses on mother and child health, TB, HIV/AIDS, malaria, sanitation and hygiene, and eye health. In 2017, the LPMAK underwent a review and organizational restructuring to improve efficiency of the community hospital. Located in Timika, Rumah Sakit Masyarakat Mimika (RSMM) continues to focus on its contractual agreement to align future operational budgets with Indonesia’s national health insurance scheme and hospital unit-cost tariffs. In addition, the RSMM’s information system was upgraded, and a new referral clinic was constructed in response to the review and restructuring.
 

PHOTO DESCRIPTIONS: (top) PTFI takes part in malaria control in Mimika Regency through various malaria prevention programs including spraying, distribution of anti-mosquito bed nets, and anti-malaria education and case detection. (bottom) The floating clinic is one of PTFI commitments to improve the health sector along the coast by enabling communities to have scheduled visits and access to basic comprehensive and affordable health services like eye exams and cataract surgery. 

Artisanal Mining

Artisanal and small-scale miners, many of whom operate illegally, have limited equipment and expertise at operating in hazardous conditions and can create social and environmental impacts as well as place their own health and safety at risk. We recognize that no single solution will entirely address this issue as long as there is cultural esteem associated with artisanal mining, along with unemployment, poverty and buyers for illegal products. However, we believe that a multi-pronged approach that includes security risk management, government cooperation, stakeholder engagement and socioeconomic development for alternative livelihoods is essential.

Community

Indonesia

Community

  • PTFI uses controlled riverine tailings management to transport tailings and other sediments to a designated area in the lowlands and the coastal zone called the Modified Deposition Area (ModADA). An estimated 5,000 illegal artisanal miners pan for gold in the Otomona River system, which is downstream of the mill within the project area. The majority of artisanal miners are men, but women also are involved in panning activities. The artisanal miners in the highland area mostly come from the various mountain tribes of Papua. The artisanal miners in the lowland area closest to Timika are approximately 70 percent non-indigenous Papuan from various regions of Indonesia. PTFI’s community, security, tailings and river management, environmental, and government relations teams coordinate with local government and host-government security to manage the safety, security, environmental, and economic risks of artisanal mining, both to artisanal miners and to PTFI’s operations.
  • A series of shooting incidents occurred within the PTFI project area from August 2017 to August 2018. During that time, non-Papuan panners and shop owners departed the highland area and returned home or moved to Timika with many Papuan panners. Although there have been no security incidents since August 2018, panning in the highlands continues to be limited to several hundred Papuan panners, a reduction from normal numbers. The lowlands saw an increase in panner numbers due to relocation from the highlands as well as newcomers from outside Papua.
  • Operational changes at PTFI will have a significant impact on panners and the gold they can recover. Starting in late 2018, operations at the Grasberg open-pit mine decreased with plans to end operations in 2019 as PTFI transitions fully underground.  PTFI projects reduction in production for 2019-2020, and there will be a concurrent drop in recoverable gold for panners. PTFI’s Community Liaison Officers and third-party contractors in the field are proactively socializing these operational changes with artisanal gold panners to help manage their expectations and encourage them to seek alternative livelihoods. 
  • Challenges related to the presence of panners, levee maintenance and other earthworks associated with managing the ModADA continue. PTFI’s lowlands operations and community teams regularly coordinate to determine strategies for effective engagement with artisanal miners based on location and timing of operational plans. This coordination is important to help reduce the potential for pedestrian safety incidents. As part of this effort, PTFI contracts 30 former artisanal miners to work as pedestrian safety guards around the ModADA. They are responsible for informing artisanal miners about the movement of heavy equipment in the ModADA and educating them about the need to keep a safe distance from the equipment. This coordination also has helped address potential conflicts associated with illegal settlements and the operational footprint needed for maintenance of the lowland system.
  • In 2018, the Government of Indonesia undertook several actions related to panning, including a Ministry of Mines-coordinated seminar on artisanal mining in Surabaya and a police-led focus group discussion in Timika.  During the police-led focus group discussion, panners, gold shop owners, local government and security forces discussed options for reducing criminality related to panning as well as options for potential legalization.  
  • The potential use of mercury by illegal gold panners remains a concern as PTFI production decreases. PTFI regularly monitors for mercury use via routine environmental monitoring programs, and mercury has not been detected above natural background levels in the estuary ecosystem. PTFI also maintains a continuous air monitoring system for mercury in the town of Timika. Since 2010, mercury continues to be detected at elevated levels in parts of the town where gold shops are present. PTFI educates the proprietors of the local gold shops of the environmental and health risks of using mercury. Due to these monitoring systems and educational outreach, PTFI believes the risk of mercury use in the river system is reduced. Community Liaison Officers are routinely in the field to socialize the health and safety risks of artisanal gold panning.

 

PHOTO DESCRIPTIONS: PTFI’s community, security, tailings and river management, environmental, and government relations teams coordinate with local government and host-government security to manage the risks of artisanal mining, both to artisanal miners and to PTFI’s operations. Pictured: The Utekini Lama (top) and Wini (bottom) panning areas.

Freeport in My Community