Freeport writes a letter

Texas Observer
June 14, 1996

In your April 5th issue, Michael King, in an article entitled "A Tale of Two Islands," continues the efforts of your publication to vilify our company and its employees based on falsehood and innuendo.

I suppose I'm an unflagging optimist. I believe that even though you've provided your readers a large body of mean-spirited misinformation about us, a discriminating reader will find the few grains of truth you permit us to provide in response--even though you may surround them by fresh false attacks, as you did the last time I wrote.

In that spirit, then, I provide the following three points:

1. Dames & Moore, an internationally respected environmental consulting firm, conducted an exhaustive, seven-month independent audit of our mining operation in Irian Jaya and concluded, in a report released April 19, that our method of disposal of mine tailings is the "most suitable option" and that the tailings are non-toxic. The report, which was made public, also found that our operations pose no significant risk to Irian Jaya's biodiversity and that we are in compliance in all material respects with Indonesia's recently modernized environmental laws. Of the thirty-three recommendations made in the audit to strengthen our environmental programs, twenty-four are already being implemented and the remaining nine are actively being researched. The audit team wrote that, "once fully implemented, these programs should ensure that Freeport's environmental management performance meets world-class standards."
2. Encouraged by our willingness to undertake the voluntary Dames & Moore study and our continuing efforts to manage the environmental impact of the mine, the Overseas Private Investment Corporation (OPIC) has reinstated our political risk insurance until December 31, 1996. As part of the settlement, we agreed to create a trust fund to finance significant environmental remediation initiatives. We will make annual contributions to the trust fund beginning immediately, accumulating to a total of one hundred million dollars at the end of the life of the mine. OPIC will monitor the implementation of the Dames & Moore recommendations throughout the eight-month period of reinstatement.
3. As the result of a series of meetings with leaders of local indigenous tribes in Irian Jaya, we have agreed to continue to enhance direct benefits to those tribes whose lands have been impacted by our operations. We have dedicated at least one percent of our revenue over the next ten years for additional community development projects, expenditures that will be coordinated by the local people themselves and the Government of Indonesia. We have also agreed to double the number of local Irianese in our workforce within the next five years, and double that number again in the following five-year period. In addition, we will at least double the number of Irianese employees at the supervisory and managerial levels of the company. To help us reach these goals, we will establish a job skills and vocation training center, the second we have built in the area.

I hope you will report these developments with the same zeal you displayed in reporting OPIC's cancellation and the environmental and social allegations against us. To any reasonable person, these recent developments would suffice to end the controversy. We realize full well, however, that there are those who are not interested in truth or fairness who will continue to restate the false and discredited allegations made against us in order to further their own agendas.

We have never claimed to be perfect. And while all mining activities have some impact on the environment, what is important is that we are sincerely committed to minimizing that impact and to being a positive force in every community in which we operate while helping provide needed products.

We also believe it is essential to listen to our critics and to respond to their valid suggestions. I submit to you that the positive accomplishments I have cited here are the fruits of that beneficial process.

Thomas J. Egan
Senior Vice President and
Senior Administrative Deputy to
the Office of the Chairman
Freeport-McMoRan Copper & Gold Inc.
New Orleans

For the editors' response to Thomas Egan's letter, see "Primitive People", June 14, 1996.
See also Freeport's first letter, January 12, 1996.