Exposing the One Percent - Occupy Emerges across the U.S.
Exposing the One Percent:
Freeport McMoRan Exploits Workers
and the Environment
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 dollars of annual profits. And the highest levels of US Government
encourage and protect the exploiters.
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 strike 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).
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.
In a transcript of Third Quarter statement for Freeport,
Kathleen Quirk, CFO, Executive VP, (annual compensation $8.6 million) reported,
“During the third quarter of 2011, our production and sales of copper and gold
were adversely affected by labor disruptions at PT Freeport Indonesia. The
estimated impact on our third quarter 2011 production, including the 8-day strike
in July 2011, and the ongoing strike that commenced on September 15 totaled
approximately 70 million pounds of copper and 100,000 ounces of gold in the
third quarter. Without these impacts, our third quarter 2011 sales from
Grasberg would have exceeded our forecasted production and sales because of
access to higher grade ore previously scheduled to be mined in future periods.
We’ve also developed revised operating plans to produce and ship concentrates
at modified levels with a reduced workforce and we sold concentrate from
inventory during the third quarter, which partly mitigated the lower production
levels” (Seeking Alpha, 2011).
Transcript of Third Quarter statement by Freeport President
Richard Adkerson showed,
“As Kathleen said, both the work stoppage in early July and
then the ongoing strike that started in mid-September reduced our third quarter
copper production by 70 million pounds from what it otherwise would’ve been,
and 100,000 ounces. So that is an adverse impact to us. It results in lower
taxes and royalties to the government of Indonesia then there otherwise
would’ve been because of that. And of course the workers who are on strike are
not being paid. So all of us, all the stakeholders have a strong incentive to
try to resolve this strike and we’re committed to trying to do that on a fair
basis. But we did revise our operating plans. We — our management team on the
ground at PT-FI, our Indonesian national staff people and contractors and some
of the workers that are [indiscernible] on the union allowed us to operate on a
reduced basis. Our mill has operated in recent days at 75% to 80% of capacity.
We’re operating in the mine at a roughly 2/3 of our normal rates.
Our underground operations have ramped up, and we’ve been
able to ship concentrate inventory with some disruptions. …Our hope is, and
what we’re certainly working towards, is to get this strike resolved on a
mutually satisfactory basis with all parties, so that we can go back to totally
normal operations. …In Indonesia, we have worked in good faith to reach a
mutually satisfactory agreement with the union. The strike really is — doesn’t
have basis under Indonesian law. We’re working cooperatively with the
government, which has designated our operations in Papua as a vital national object.
So the government recognizes the importance of our operations to the community,
to Papua, to the government itself. Our pay packages have been and continue to
be at the top of workers for workers in Indonesia. We are offering a
substantial increase to pay as we talk about the new 2-year contract. We see
our offer as being fair and generous. We have worked in a government-designated
process of having discussions, including participating with the union in a
mediation process. …The government of Indonesia came up with conclusions and we
accepted those conclusions. The union did not” (Seeking Alpha, 2011).
Freeport is connected to some of the most elite
transnational capitalists in the world. 7.8% of Freeport’s stock is held by
BlackRock, Inc., a major investment management firm based in New York.
BlackRock’s assets under management total US $3.66 trillion across equity,
fixed income, cash management, alternative investment, real estate and advisory
strategies. BlackRock, Inc. (NYSE: BLK) independent directors include: Abdlatif
Y. Al-Hamad, Director General/Chairman of the Board of Directors of the Arab
Fund for Economic and Social Development, James E. Rohr, Chairman and Chief
Executive Officer, The PNC Financial Services Group, Inc.. Sir Deryck Maughan Partner
and Head of Financial Institutions Group, Kohlberg Kravis Roberts, John
Varley
Former Chief Executive, Barclays PLC, David H. Komansky, Former Chairman
and Chief Executive Officer, Merrill Lynch & Co., Inc., John Varley, Former
Chief Executive, Barclays PLC, Thomas H. O’Brien, Former Chairman and Chief
Executive Officer, The PNC Financial Services Group, Inc.
Freeport strikers
have begun to win the support of the Occupy Movement. Occupy Phoenix activists
marched to Freeport headquarters on October 31 in support of the strikes in
Indonesia.
According to Marianne Kearney writing for The Age.com in 2006, “Freeport mine is polluting
West Papua’s rivers and estuaries and a world heritage-protected national park,
according to the company’s own environmental assessments and Indonesian
Government standards.” Documents leaked to an environment group show that the
world’s largest gold and copper mine has dumped a billion tons of mine waste,
known as tailings, into surrounding rivers, polluting forests and river systems
with heavy metals such as copper and arsenic, and endangering species such as
the flying fox.
The environmental risk assessments were leaked to Indonesian
environment group Wahli. “Freeport has known that their operation is
endangering the environment but they don’t do anything,” Wahli spokesman Torry
Kuswardono said. The environmental assessments show that the company’s tailings
are polluting the world-heritage Lorentz National Park, which stretches from
glacier-capped mountains to a tropical marine environment (The Age, 2006).
Multiple issues with international implications are
demonstrated by the Freepost strike in Indonesia. The wealth inequality between
the stock-holders of Freeport and the wage workers in their mines is a example
of how the top one percent of corporate capitalists of the world hold and
control vast private resources to the detriment of working people everywhere.
The Freeport case is also an demonstration of how holders of
private capital bribe and manipulate access to mineral resources that were
provided by nature that in reality belong to all living beings (Fair Share of
the Common Heritage), yet are used to further concentrate wealth among the few
creating massive environmental damage in the process. Freeport’s political
clout—reaching all the way into the Whitehouse and the highest levels of power
in Indonesia—uses the police power of the state to force workers into
compliance. The one percent transnational corporate class utilizes the power of
the military around the globe to protect their interests in the growth and free
flow of capital to the detriment of a vast majority of the rest of us
symbolized by the Occupied Movement’s mantra 99%.
Peter Phillips is a
Professor of Sociology at Sonoma State University and President of Media
Freedom Foundation/Project Censored.
Kimberly Soeiro is an
undergraduate Sociology major and Research Associate at Sonoma State
University. She has been working in multiple library settings since 2008. Her
concentration continues to be research and information.
For a 2005 NY Times Article on Freeport’s Military Bribes
and Environmental damage see: Below a Mountain of Waste, http://www.nytimes.com/2005/12/27/international/asia/27gold.html?pagewanted=1&ei=5070&en=0ee1bc8941899f9f&ex=1138078800
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Labels: News and Politics: NATIONAL, PERSPECTIVES
