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Exposing the One Percent: Freeport McMoRan Exploits Workers and the Environment

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By Peter Phillips and Kimberly Soeiro

 

As the Occupy Movement emerges across the US and around the world, a prime example of greed and exploitation is occurring with very little coverage in the global corporate media. Members of the global top one percent are killing striking workers and using raw military power to protect their billions of dollors of annual profits. And the highest levels of US Government encourage and protect the exploiters.

 

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Freeport McMoRan (FCX) is the world's largest extractor of copper and gold and controls huge deposits in Papua, Indonesia. The Gasberg Mine in Papua employs some 8,000 workers at wages of $1.50 to $3.00 an hour. The workers have been on stike since September of 2011 for an increase in wages. In an attempt to block busloads of replacement workers, several strikers have been killed and several wounded by security forces financed by Freeport. Freeport has offered a 22% increase in wages, but strikers say that is not enough and are demanding an increase to the international standard of $17 - $43 an hour. The dispute over pay has also drawn in local tribesmen, with their own grievances over land rights and pollution, armed with spears and arrows to join Freeport workers blocking the mine's supply roads for food and fuel this week.

The Jakarta Globe reported October 28, 2011, that Indonesian security forces in West Papua, notably the police, continue to receive extensive direct payments of cash from Freeport McMoRan. National Police chief Timur Pradopo admitted on October 28 that officers had received close to $10 million annually from Freeport. Prominent Indonesian NGO Imparsial puts the annual figure at $14 million. Pradopa described the millions of dollars in additional payments made to the police by Freeport as "lunch money" (Jakarta Globe, 2011).  The payments recall even larger payments made by Freeport to Indonesian military forces over the years which, once revealed, prompted a US Security and Exchange Commission investigation of Freeport and questions as to Freeport's liability under the US law (the Foreign Corrupt Practices Act). Since 1991 Freeport has paid nearly $13 billion to the Indonesian government at a 1.5% royalty rate and remains one of Indonesia's largest sources of income.  

Reuters reported on October 25, "Miners have been striking at Grasberg, the world's second-biggest copper mine, since mid-September, disrupting output and stopping shipments. Violence has escalated in recent weeks with sabotage to pipelines and deadly attacks on employees. Angry workers and people from seven local tribes are blocking the main road near an airport in Timika that links Freeport's port to the Grasberg mine, and refused to shift after police gave them a deadline to move. "People fought back. The police gave several warning shots but they have left now," said a striking worker, adding that there were no casualties reported. "The tribes have conducted war ceremonies. They are ready to die for this" (Reuters Africa, 2011).

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Amnesty International has documented numerous cases where Indonesian police have used unnecessary force against the strikers and their supporters. It is stated in a recent report by West Papua Media that, "Indonesian security forces attacked a mass gathering in the Papua capital, Jayapura, and striking workers at the Freeport mine in the southern highlands. At least five people were killed and many more injured in the assaults, which show a renewed pattern of overt violence against peaceful dissent. A brutal and unjustified October 19 attack on thousands of Papuans exercising their rights to assembly and freedom of speech resulted in the death of at least three Papuan civilians, the beating of many, detention of hundreds and arrest of six, reportedly on treason charges. The Obama administration has largely ignored the egregious violation of human rights, instead advancing US-Indonesian military ties. US Secretary of Defense Leon Panetta, who arrived in Indonesia in the immediate wake of the Jayapura attack, avoided criticism of the assault and reaffirmed US support for Indonesia's territorial integrity" (West Papua Media, 2011). Panetta also reportedly commended Indonesia's handling of a weeks-long
Freeport strike.

"The global dimension of the issues raised by the Freeport confrontation [is] highlighted by the fact that workers at the company's Sociedad Minera Cerro Verde copper mine in Peru have been on strike since September 29. They are demanding pay rises of 11 percent, while the company has offered just 3 percent" (WSWS, 2011).

On November 7 The Jakarta Globe reported that, "Striking workers employed by Freeport-McMoRan Copper & Gold's subsidiary in Papua have dropped their minimum wage increase demands from $7.50 to $4.00 an hour, the All Indonesian Workers Union said. Virgo Solos, an official from the union, known as the SPSI, told the Globe that they considered the demands, up from the current minimum wage of $1.50 an hour, to be "the best solution for all." Virgo said Freeport management was currently offering $3.00 an hour (Jakarta Globe, 2011). Freeport-McMoRan's Grasberg mine, according to WSWS.org, is the ". . . world's largest and most profitable gold and copper mine. Buoyed by soaring commodity prices, the company's first half-year profit jumped to almost $3 billion, nearly double the figure for the first six months of 2010" (WSWS, 2011).

US President Obama is planning an Indonesia visit in mid-November to strengthen relations with Jakarta as part of Washington's escalating effort to combat Chinese influence in the Asia-Pacific region (WSWS, 2011).

Freeport operates in North and South America, Indosesia and Africa. In 2010, the company sold 3.9 billion pounds of copper, 1.9 million ounces of gold and 67 million pounds of molybdenum. Freeport McMoran has a over all revenue of $18.9 billion in 2010 and a net income of $4.2 billion. The Chairman of the Board is James R. Moffett owns over 4 million shares with a share value close to $42.00. Moffetts annual compensation from FCX was $30.57 million in 2010 according to the FCX annual meeting report in June of 2011. Richard C. Adkerson is President of the board of FCX and owns over 5.3 million shares. His total compensation in 2010 was also $30.57 million.

 

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In a transcript of Third Quarter statement for Freeport, Kathleen Quirk, CFO, Executive VP, (annual compensation $8.6 million) reported,

 

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Exposing the One Percent: Freeport McMoRan Exploits Workers and the Environment