Our Human Rights Policy, first established in the late 1990s and most recently updated in 2017, commits us to respecting human rights, conducting business in a manner consistent with the Universal Declaration of Human Rights, and implementing the United Nations Guiding Principles on Business and Human Rights (UN Guiding Principles).
To meet these commitments, we continue to conduct site-level Human Rights Impact Assessments (HRIAs) using a framework aligned with the UN Guiding Principles, the scope of which is summarized in our Human Rights Dashboard. In 2018, we focused on:
- Advancing action plans associated with the Cerro Verde HRIA
- Project scoping and implementation of the New Mexico Operations HRIA
We also continue to integrate human rights considerations across relevant business functions. In 2018, associated activities included:
- Launching a corporate-level Human Rights Working Group to support our site-level implementation of the UN Guiding Principles.
- Updating our Sustainable Development (SD) Risk Register Process to include additional categorical topics with more extensive definitions for risk evaluation, including consideration of the potential for human rights impacts across topics.
- Advancing the development of responsible sourcing due diligence programs for the goods and services we procure as well as for metals that we purchase from third-party sources for further processing.
- Continuing to engage the financial community, civil society, downstream customers, responsible sourcing initiatives, commodity and trade associations, as well as international governmental agencies on a regular basis. This included organizing a set of international-level stakeholder meetings to provide updates and receive feedback on our human rights program, including the results of the Cerro Verde HRIA as well as making presentations via multi-stakeholder forums.
We promote human rights awareness through engagement with host governments and local communities as well as by providing training to employees and contractors. We conduct our security activities using the Voluntary Principles on Security and Human Rights as guidelines.
While we seek to avoid causing adverse impacts, we acknowledge that they may occur despite our best efforts. We have multiple mechanisms for employees, community members, and members of our supply chain to report concerns. We are continuing our global grievance review project to test these internal and external grievance mechanisms against the UN Guiding Principles effectiveness criteria (i.e., legitimate, accessible, predictable, equitable, transparent, rights-compatible, a source of continuous learning, and based on engagement and dialogue). In 2018, this included internal benchmarking and leveraging an employee training platform and existing stakeholder engagement mechanisms to solicit feedback from employees, community members, suppliers (including contractors) and other third parties on their knowledge of and trust in our various grievance mechanisms as well as how these might be improved. These mechanisms help us address concerns early and remediate impacts directly. We do not tolerate retaliation against anyone who raises a question or concern in good faith and will protect the confidentiality of anyone who reports suspected violations.
Our participation in multi-industry dialogues on respect for human rights continues via:
- Business for Social Responsibility’s human rights working group,
- Sustainability 50’s executive-level, peer-to-peer collaboration forum on human rights,
- ICMM’s Community Support Working Group,
- The Voluntary Principles on Security and Human Rights.
We also continue to engage with the Corporate Human Rights Benchmark, which assesses our performance based on a set of publicly reported human rights indicators. The 2018 Benchmark ranked us 12th among 101 of the largest publicly traded agricultural, apparel and extractives companies. While we are pleased with our relative performance, we are continuing to advance the implementation of site-level HRIAs to further integrate human rights considerations across our business and enhance our reporting.
These external initiatives influence our human rights approach. We also continue to work with global risk analytics and advisory firm Verisk Maplecroft, which provides us with advisory support on our UN Guiding Principles implementation and assists in implementation of site-level HRIAs.
We are always open to direct engagement with stakeholders on our human rights approach.
Our Human Rights Policy commits us to respecting human rights. The policy has evolved since it was first established in the late 1990s, and was most recently updated and approved by our Board of Directors in August 2017. It includes a commitment to conducting our operations in a manner consistent with the Universal Declaration of Human Rights, the laws and regulations of host countries, and the United Nations Guiding Principles on Business and Human Rights (UN Guiding Principles). In the area of security, the Voluntary Principles on Security and Human Rights are the guidelines for our security programs, including interaction with host-government security personnel, private security contractors and our internal security employees.
Application of our Human Rights Policy is supported by our core Sustainable Development (SD) policies including:
Our policies apply to our employees and suppliers (including contractors). They are operationalized through:
- Our Principles of Business Conduct (PBC), which sets forth the global system of principles that our employees must follow in all activities. The PBC highlights our commitment to promoting the rule of law and respecting human rights.
- Our Supplier Code of Conduct, which is based on the PBC and provided to our supply chain partners (including contractors) to set forth our expectations in areas such as safety, respect for human rights, anti-corruption, community and environment.
These policies and codes of conduct along with relevant external standards and initiatives applied at corporate- and / or site-level form the overall framework that guides our SD programs and our management of salient human rights issues. Other external standards include the International Council on Mining and Metals (ICMM) Principles and position statements, the Voluntary Principles on Security and Human Rights, and the IFC Performance Standards.
The Corporate Responsibility Committee of our Board of Directors (Board) assists the Board in fulfilling its oversight responsibilities with respect to the implementation of our Human Rights Policy (i.e. respect for human rights). The Corporate Responsibility Committee also oversees the company’s SD programs, including respect for human rights. Please refer to Governance for more information on the role of the Corporate Responsibility Committee, as well as examples of the topics (human rights and other) the committee addressed in 2018.
Our corporate SD Leadership Team considers both imminent matters and emerging trends, while providing strategic guidance for our SD programs, including our human rights program. The team is sponsored by our Senior Vice President and Chief Administrative Officer, and is led by our Vice President Environmental Services and Sustainable Development. The team includes our Chief Operating Officer and business unit presidents as well as executives from Safety, Supply Chain, Human Resources, Sales, Security, Legal / Compliance, and Land and Water. Please refer to Our Approach for more information on the role of the Sustainable Development Leadership Team and the key issues and projects they reviewed and addressed in 2018 (human rights and other).
Scope of Potential Human Rights Impacts
As a first step in our United Nations Guiding Principles on Business and Human Rights (UN Guiding Principles) implementation, we developed a ‘dashboard’ of human rights issues related to our mining-related activities. The dashboard reflects the scope of our potential human rights risks and impacts. It also reflects the scope of our Human Rights Impact Assessment (HRIA) methodology and our efforts to embed respect for human rights across our operations. Each dashboard topic is mapped to recognized international human rights to support a comprehensive, rights-driven approach while organized in a way that is accessible to our internal and external stakeholders. Certain dashboard topics (like artisanal mining and indigenous peoples) may not be relevant at every operating location.
Salient Human Rights Issues
Our Sustainable Development (SD) framework is implemented based on operation-specific factors and influences, including regional context, type of operation and social setting. Our SD Risk Register Process plays an essential role in this regard, by prioritizing risks that could have the potential for negative consequences to our business and/or our stakeholders in relation to areas such as health and safety, labor relations, respect for human rights, the environment, community stability and economic impacts.
The global, prioritized outcomes of our SD Risk Register Process (Sustainability Focus Areas) are reviewed annually by our SD Leadership Team and communicated to members of our Board. We manage these priority areas on a daily basis, including associated potential impacts on rights holders. Examples include:
- Workforce safety, including fatality prevention and occupational health
- Labor relations, including working conditions, discrimination, and the right to freedom of association and collective bargaining
- Community engagement and development responsive to communities (including vulnerable groups and indigenous peoples), with a focus on assessing and managing impacts, land use and customary rights, economic activities/livelihoods, public health and artisanal mining
- Tailings management, including associated workforce and community health and safety
- Water supply and management, including water quality and quantity for local communities
- Security and human rights
- Climate-related impacts and opportunities, including pollution and exposure to natural hazards
- Product stewardship, including responsible sourcing of metals, goods and services
Our approach toward and performance regarding our Sustainability Focus Areas are described throughout our Annual Working Toward Sustainable Development Report.
Note, however, that not all of our Sustainability Focus Areas are salient at every operation. Salient human rights issues vary by site and are identified through our site-level SD Risk Register Process as well as our site-level HRIA methodology. For example:
- Key issues identified in our Cerro Verde HRIA can be found at: Cerro Verde HRIA
- Key issues identified in our New Mexico HRIA can be found at: New Mexico Operations HRIA
All of our operating facilities have SD Leaders and SD Risk Register committees that operate under the leadership of the site President/General Manager. Operations also have Community Grievance Officers who are responsible for grievance management, including overseeing timely and transparent processing of complaints. At higher risk operations, our site-level Human Rights Compliance Officers oversee compliance and training activities, and manage grievance mechanisms for the reporting, documentation and remedy (to the extent possible) of human rights related allegations that are reported in our areas of influence.
In 2018, we launched an internal Human Rights Working Group to support our site-level implementation of the UN Guiding Principles and the integration of human rights considerations across our business. The team is sponsored by our Vice President Environmental Services and Sustainable Development, and is co-led by our Director-Sustainability Programs and Manager Business and Human Rights. The group is comprised of representatives from Safety, Supply Chain, Human Resources, Sales, Security, Legal / Compliance, Environment and Community Development. The scope of the working group is reflected in our Human Rights Dashboard, which summarizes the human rights issues relevant to our mining-related activities.
The group met five times in 2018 and addressed key issues and projects such as:
- Our Human Rights Policy and programs
- Human rights-related enhancements to our SD Risk Register Process
- New Mexico HRIA planning and implementation
- Cerro Verde HRIA results and next steps
- Our performance on the Corporate Human Rights Benchmark
We formally engage with a range of stakeholders including rights holders such as employees and community members and other interested stakeholders such as development institutions, investors, banks, NGOs, civil society, government, suppliers/contractors, downstream customers, responsible sourcing initiatives, commodity and trade associations, and international governmental agencies on an ongoing basis.
In the internal context, for example, employees are engaged on an ongoing basis through:
- Internal company communications
- Everyday interactions with line managers
- Formal internal grievance mechanisms
- Interactions with labor representatives
For more information on our ongoing internal stakeholder engagement, including examples of stakeholder input and how we have taken such input into account, please refer to Stakeholder Engagement and Workforce.
In the external context, each of our mining operations maintain five-year community engagement and development plans that identify affected or interested parties for ongoing engagement and consultation. Issues raised by community stakeholders help inform each operation’s SD Risk Register and assist in developing social investment strategies. Hundreds of individuals and entities are engaged annually through:
- Community Liaison Officers
- Community foundations
- Participatory group panels
- Town hall meetings
- Site-level community grievance mechanisms
External engagement also occurs through regulatory consultation processes with local governments and community groups, including indigenous peoples and vulnerable groups.
For more information on our ongoing external stakeholder engagement, including examples of stakeholder input and how we have taken such input into account, refer to Communities.
Human Rights Defenders
Violence against human rights defenders has become an issue of global concern. Our Human Rights Policy commits us to respect the rights of all individuals who may be potentially impacted by our business, engage with affected stakeholders in the development of our human rights approach and prohibit harassment including of human rights defenders. We do not condone any form of violence against those who peacefully promote and defend human rights in relation to our activities and expect our business partners to do the same. We recognize the value of an active and open society supported by the rule of law and believe it is important that our stakeholders are able to express their opinions in a safe manner without fear of reprisal or persecution.
Communication, Training and Awareness Raising
Employees. We are committed to the highest level of ethical and legal conduct. The Freeport-McMoRan Principles of Business Conduct (PBC) defines the expected behavior of all employees and our Board – including respect for human rights. It sets forth a variety of business principles, from promoting a safe workplace to complying with laws and avoiding conflicts of interest to treating each other and our stakeholders with respect and developing positive relationships with local communities. All employees receive PBC training annually, which links to our Human Rights Policy. Please refer to Business Ethics for more information on PBC training.
In addition to PBC training, we promote awareness of our Human Rights Policy and the Voluntary Principles on Security and Human Rights through a variety of mechanisms, including annual classroom and online training, the distribution of pamphlets and other media and periodic training . Refer to our 2018 Report to the Voluntary Principles Plenary for more information on human rights and security training for security employees, security contractors, and host government security personnel assigned to our operations.
Suppliers (including contractors). We have incorporated standard language on human rights into our corporate contract templates. Suppliers receive, and are expected to perform in accordance with, our Supplier Code of Conduct. Our Supplier Code of Conduct is based on our PBC and sets forth our expectations for suppliers (including contractors) in areas such as safety, respect for human rights, anti-corruption, community and environment. For the purpose of the Supplier Code of Conduct, supplier is defined as a business that provides goods or services to our company. A supplier may include suppliers, contractors, consultants, vendors, their subcontractors and any other contracted third parties.
On-site contractors are subject to an onboarding process, which consists of a review of company policies, procedures, and security protocols and validation of required certifications. Our health and safety performance and associated reporting encompasses our direct employees as well as on-site contractors. The Freeport-McMoRan Contractor Health and Safety Manual defines the minimum expectations and requirements for contractors working at our operations. As with our employees, site-specific health and safety training is conducted with contractors and tailored to task-specific hazards and critical controls.
Some sites also provide targeted training on human rights and/or the Supplier Code of Conduct in addition to the on-site contractor onboarding process. Refer to the Cerro Verde HRIA section as well as our 2018 Report to the Voluntary Principles Plenary for examples at our PTFI operation in Indonesia and our Cerro Verde operation in Peru.
Community members and third parties. Our Human Rights Policy, Principles of Business Conduct, Supplier Code of Conduct and other SD policies are available to external stakeholders (local and international) in multiple languages on our website.
Our engagement with local communities and other third parties on our Human Rights Policy and program varies by operation. Refer to our 2018 Report to the Voluntary Principles Plenary for examples of how we engage with host governments, community members and others on security and human rights at our PTFI operation in Indonesia and our Cerro Verde operation in Peru. Refer to the Cerro Verde HRIA section and the New Mexico operations HRIA section for examples of how we engaged with community stakeholders on our broader human rights program and associated due diligence.
At the international level, we engage the financial community, civil society, downstream customers, responsible sourcing initiatives, commodity and trade associations, as well as international governmental agencies on a regular basis to discuss and receive feedback on our Human Rights Policy and program via our Annual Working Toward Sustainable Development Report as well as both direct engagement and periodic international stakeholder teleconferences regarding our human rights program. Refer to Stakeholder Engagement for more information. Also refer to our 2018 Report to the Voluntary Principles Plenary for examples of how we engage on security and human rights with fellow Voluntary Principles members (government, NGO and corporate) at the initiative level.
Sustainable Development Risk Register Process
Our SD Risk Register Process facilitates the identification, prioritization and management of the most significant risks that could have negative consequences to our business and our stakeholders across areas including health and safety, respect for human rights, environmental management, community development, and economic impacts. Each of our operating mining and metals processing facilities maintains an SD Risk Register. SD Risk Registers are implemented by SD Risk Register committees led by an SD Leader under the leadership of the site President / General Manager.
We updated our SD Risk Register Process in 2018 to include additional categorical topics with more extensive definitions for risk evaluation. The potential / actual impacts on rights-holders are considered under each of the SD risk category definitions as outlined in our Human Rights Dashboard. When evaluating each of the SD risk categories, operations consider where they may be at risk of causing or contributing to adverse impacts to individual rights. This assists us in further integration of respect for human rights within our SD management systems. The update also reflects the due diligence priorities of actors in the metals value chain, including members of the Responsible Minerals Initiative.
Each year, we undergo external assurance of our Working Toward Sustainable Development Report in accordance with the International Council on Mining and Metals Sustainable Development Framework Assurance Procedure. Our SD Risk Register Process falls within this scope.
In addition to our SD Risk Register Process, our Project Development Sustainability Review process allows us to integrate sustainability considerations into mine development or expansion projects. The review is designed to help multi-disciplinary project teams to identify risks, unintended consequences, trade-offs and opportunities so they may be addressed early and during each stage of project development. Project Development Sustainability Reviews may occur at the scoping, prefeasibility, feasibility and / or engineering / construction stages of projects and also are applicable to exploration projects. Key areas of focus identified at different project stages include access to water, energy and materials, potential impacts to hydrology, air quality, biodiversity, human rights, community receptivity, economic impacts, and land acquisition and resettlement.
Audits and Assessments
To facilitate implementation of our policy commitments and objectives - (including those related to human rights), we utilize a combination of audit and assessment programs along with an annual program for independent, site-level assurance of our sustainability framework - including the implementation of our commitments under the ICMM Sustainable Development Framework). Our site-level human rights impact assessments help us apply a human rights lens to our established management systems and test their effectiveness in identifying, mitigating and remediating human rights risks and impacts. Please refer to Audits and Assessments for more information.
Human Rights Due Diligence Site-level HRIA Methodology | Cerro Verde HRIA | New Mexico Operations HRIA
Human Rights Impact Assessments. We work with global risk analytics and advisory firm Verisk Maplecroft to implement Human Rights Impact assessments (HRIAs) using a framework aligned with the United Nations Guiding Principles on Business and Human Rights (UN Guiding Principles). To date, we have conducted four HRIAs:
Freeport Compliance eXchange. Our online due diligence platform, the Freeport Compliance eXchange (FCeX), is a survey-based software platform designed to assess risk related to a range of legal, regulatory and reputational risk areas, including human rights. The system issues a risk assessment questionnaire that must be completed before new business partners at higher risk operations are approved. FCeX is managed by corporate- and site-level Compliance officers and has enhanced our ability to identify, assess and mitigate compliance risks on an ongoing basis.
Responsible Sourcing Program. In 2018, we advanced the development of responsible-sourcing due diligence programs for the goods and services we procure as well as for metals that we purchase from third-party sources for further processing. This included collaboration with Verisk Maplecroft to develop two training modules to help inform the direction of a pilot framework. Early in 2019, we designated a Global Supply Chain Sustainability Manager and appointed a new Product Stewardship Director to help lead these efforts. The development of these programs is partly linked to the site-level HRIAs we have conducted to date, which have highlighted the need for more visibility into potential human rights risks within our supply chains.
We have multiple mechanisms for employees, community members, those in our supply chain and others to report concerns. These channels help us address concerns early and remediate impacts. Our grievance mechanisms support our remediation commitment.
As highlighted in our Principles of Business Conduct (PBC), we have an open-door culture whereby employees are encouraged to openly discuss any questions or concerns about the way we conduct business. This open communication is vital to our growth as employees, a team and a company. Each of us has a responsibility to report suspected violations of the PBC, our policies, procedures or the law to the appropriate personnel (supervisors, local or corporate Human Resources representatives, local or corporate Legal department, local or corporate Compliance Officer or other) as quickly as possible.
Our global, publicly available reporting channels associated with our Principles of Business Conduct are available to our employees. They also are available to members of our supply chain via our Supplier Code of Conduct. Such channels include:
- The FCX Compliance Line, a phone system managed by an independent third party that allows for anonymous reporting of issues or concerns relating to our PBC, policies or procedures
- A similar, web-based reporting system, also operated by a third party
- The option to send a direct email to our corporate Compliance Department
In addition to making our global, publicly available reporting options open to those in our supply chain, we expect our suppliers to establish and maintain grievance mechanisms to record and address concerns in a timely and transparent manner.
We also maintain long-established, site-level community grievance mechanisms at our operating facilities per our Community Policy, as well as dedicated human rights grievance mechanisms at higher risk operations. All of these grievance mechanisms are available in local languages.
We do not tolerate retaliation against anyone who raises a question or concern about our business practices in good faith. We are committed to:
- Protecting the confidentiality of anyone who reports potential violations should they request it
- Cooperating with human rights-related investigations
- Supporting appropriate remediation for proven violations
Per our Human Rights Policy, use of our internal and external grievance mechanisms does not preclude access to judicial or other non-judicial grievance mechanisms. In the event of accusations made via a state-based non-judicial grievance mechanisms (e.g. such as proceedings through the OECD National Contact Points), we would participate in related proceedings constructively, cooperatively and in good faith.
|Grievance Mechanism||Target End User||Source||Examples of Grievances Received and Remedy Provided|
|Freeport-McMoRan Compliance Line||Employees|
|Site-level Community Grievance Mechanisms||Community members and their representatives|
|Site-level Human Rights Grievance Mechanisms||Employees, suppliers (including contractors) and community members and their representatives|
|Freeport-McMoRan Contacts||Employees, suppliers (including contractors), community members and their representatives, and others|
In 2018, we continued a project to review our employee and community grievance management procedures against the effectiveness criteria outlined in the United Nations Guiding Principles on Business and Human Rights (i.e. legitimate, accessible, predictable, equitable, transparent, rights-compatible, a source of continuous learning, and based on engagement and dialogue). This included internal benchmarking and leveraging our Community Partnership Panel meetings in the U.S. as well as an optional employee survey accompanying our global, web-based PBC training to solicit feedback from a set of employees and community members on their knowledge of and trust in our grievance mechanisms and how these might be improved. We also incorporated survey questions into Verisk Maplecroft’s engagement with employees, those in our supply chain (including contractors), community members and other third parties during the Human Rights Impact Assessment at our Chino and Tyrone operations in New Mexico. This initiative is in line with our policy commitment to engaging with affected stakeholders and their representatives in the development of our human rights approach.
While we seek to avoid causing adverse impacts, we acknowledge that they may occur despite our best efforts. Our Human Rights Policy outlines our commitment to remediating any proven adverse impacts on individuals and communities that are caused by or contributed to by our operations. Remedy can take a range of forms, including cessation of impact, apology, restoration of what was lost, compensation (cash or in kind), and/or rehabilitation (provision of medical, psychological, legal or social services). Remedy also involves the identification of lessons learned and taking steps to prevent the impact from recurring.
The Voluntary Principles on Security and Human Rights serve as guidelines for our security programs, including interaction with host-government police and military personnel as well as private security contractors. The Voluntary Principles serve as a core component of our broader human rights program, which includes implementation of the United Nations Guiding Principles on Business and Human Rights. Not all human rights issues are security issues, and not all security issues are human rights issues - it is at the nexus of human rights and security where our implementation of the Voluntary Principles resides.
We have remained an active participant in the Voluntary Principles Initiative since it was first established in 2000. Early in 2018, we completed a two-year term on the Voluntary Principles Initiative Steering Committee and Voluntary Principles Association Board of Directors. At the 2018 Voluntary Principles Plenary in Washington, D.C., we delivered a verification presentation on our Voluntary Principles implementation and participated in a panel discussion on model clauses for Memorandum of Understanding (MOU) with security forces. Furthermore, we participated in the VPI Implementation Working Group, the VPI Outreach Working Group and Corporate Pillar meetings throughout the year.
Our 2018 Annual Report to the Voluntary Principles Plenary includes country implementation details for Indonesia and Peru as these countries represent our higher risk environments in terms of security and human rights. The report includes information on a series of sporadic shooting incidents at our PTFI operation in Indonesia starting between August 2017 and August 2018, as well as security incidents at its Amamapare Port.
PT Freeport Indonesia
Indonesia has long faced separatist movements and civil and religious strife in a number of provinces. Several separatist groups have sought increased political independence for the province of Papua, where our Grasberg minerals district is located. In Papua, there have been attacks on civilians by separatists and sporadic but highly publicized conflicts between separatists and the Indonesian military and police. Security risks also stem from periodic social and ethnic tensions within the local community and in other areas of the province as well as the presence of in-migration.
Security Incidents. In 2009, a series of shooting incidents occurred within the PTFI project area, including along the road leading to our mining and milling operations. The shooting incidents continued on a sporadic basis through January 1, 2015. The next shooting incident occurred in August 2017, and a series of shooting incidents continued on a sporadic basis within the PTFI project area and in nearby areas through August 2018. Between August 2017 and August 2018, there were 37 shooting incidents within the highlands of the PTFI project area as well as nearby areas. There have been no shooting incidents since August 17, 2018.
These 37 shooting incidents resulted in 14 injuries to workforce members transiting the Main Supply Road, as well as two injuries to medical services contractors administering care to a community member (who was also injured). During related law enforcement actions, government security personnel suffered eight injuries and two fatalities. In response to these heightened security conditions, workforce dependents were temporarily demobilized from the affected project area from November 24, 2017 to January 8, 2018.
Although the majority of the shooting incidents have occurred along the Main Supply Road and nearby areas, a shooting incident also occurred in one of our residential communities. On June 5, 2018, shots were fired at a workforce member and his child as they walked from their residence to their vehicle. Their vehicle was struck several times, as was their residence. No one was injured.
The safety of our workforce is a critical concern, and PTFI continues to work cooperatively with the Indonesian government to address security issues within the project area and in nearby areas. We continue to limit use of the road leading to our mining and milling operations to secured convoys, including transport of personnel by armored vehicles in designated areas.
PTFI also experienced security incidents at its Amamapare Port in 2018. Please refer to our 2018 Report to the Voluntary Principles Plenary for more information.
Public and Private Security. The PTFI Security and Risk Management Department employed approximately 565 unarmed security personnel and approximately 800 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 nature of security challenges and the remote and challenging terrain.
PT-FI’s MOU with the National Police was last revised and signed in 2018. 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 PT-FI policies and procedures, including business ethics and human rights. The Voluntary Principles are incorporated by reference and included as an attachment to the MOU.
PTFI, like all businesses and residents of Indonesia, relies on the Indonesian government for the maintenance of public order, upholding the rule of law and protection of personnel and property. From the outset of PTFI’s operations, the Indonesian government has looked to PTFI to provide logistical and infrastructure support and assistance for these necessary services because of the limited resources of the Indonesian government and the remote location of and lack of development in Papua. PTFI’s financial support of the Indonesian government security institutions assigned to PTFI’s operations area represents a prudent response to PTFI’s requirements and commitments to protect its workforce and property, and better ensuring that personnel are properly fed and lodged and have the logistical resources to patrol PTFI’s roads and secure its area of operations. In addition, the provision of such support is consistent with the scope of PTFI’s project area comprising approximately 2900 square kilometers, our philosophy of responsible corporate citizenship, and reflects our commitment to pursue practices that respect and promote human rights. In 2018, the majority of PTFI’s security budget (68 percent) was directed to PTFI’s own industrial security requirements (including employee and contractor direct costs, and associated overhead). The remainder of the budget (32 percent) represented PTFI’s support costs for government-provided security and totaled $27 million. Please refer to our 2018 Report to the Voluntary Principles Plenary for more information.
Cerro Verde, like all businesses and residents of Peru, 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.
Public and Private Security. As of the end of 2018, Cerro Verde employed 11 security employees and 372 private security contractors. Some private security contractors assigned to the protection of expatriate personnel and explosives storage are armed.
In addition to these security personnel, the national government has assigned Peruvian National Police (PNP) to the site in teams of 17 on 15-day rotations in accordance with Legislative Decree N° 1267, Supreme Decrees 026-2017-IN, N° 003-2017-IN and N° 018-2017-IN, and Emergency Decree N° 006-2017 (article 11).
Cerro Verde also has limited public security forces in support of its operation, with the arrangement defined through an MOU with the PNP. Under Peruvian law, PNP officers may volunteer to be assigned to operations such as Cerro Verde during their scheduled leave. This allows the officers to supplement their government salaries at a rate set by Government. They retain their full powers as officers of the law when performing this role and wear their police uniforms, but are not armed. The MOU was last updated in December 2017. It covers a two-year term and details the working relationship between Cerro Verde and the PNP, including areas of support and coordination. The MOU also includes a commitment to the Voluntary Principles as well as the United Nations Code of Conduct for and Basic Principles on the Use of Force and Firearms by Law Enforcement Officials, Peruvian human rights law and the related the human rights manual, and other applicable national or international norms related to human rights and international humanitarian law. The total cost to Cerro Verde for this support totaled approximately $1 million in 2018. This support is primarily remuneration, but also includes a limited amount for in-kind support (e.g., daily bus transportation to and from the mine, food and incidentals) provided by the Company. Please refer to our 2018 Report to the Voluntary Principles Plenary for more information.