Henry Kissinger has one sweet deal in the Freeport-McMoran Copper and Gold Co (FCX on the NYSE). Not only does he make well over $500,000 a year just for sitting on the board of directors, his law firm, Kissinger & Associates rakes in $300,000 – 500,000 per year as the company legal advisors, making sure no pesky environmental regulations can ever be enforced and no poor native group can ever win a settlement for having their land poisoned. But best of all for him, he is also the majority stockholder in a company with reserves estimated at $60 billion, making it the single largest gold deposit in the world and third largest open-pit copper mine. Yep, Kissinger’s got a pretty good deal all right. Especially when you consider that FCX has never had to pay much of anything to anybody but a handful of stakeholders.
Bloody Hands Full of Gold: Henry Kissinger and the Freeport-McMoRan Gold & Copper Co: Part II
By Cheryl Seal
One Sweet Deal
Henry Kissinger has one sweet deal in the Freeport-McMoran Copper and Gold Co (FCX on the NYSE). Not only does he make well over $500,000 a year just for sitting on the board of directors, his "consulting firm" Kissinger Associates, Inc. rakes in $300,000 – 500,000 per year as the company corporate advisors, making sure no pesky environmental regulations can ever be enforced and no poor native group can ever win a settlement for having their land poisoned. Kissinger Associates, by the way, is one slippery outfit. Just try doing even an extensive Internet search and you will turn up billows of "smoke." There's a Kissinger Associates software outfit - no connection, apparently - and there are indirect references in other contexts to the consulting firm, but nowhere will you find a detailed description of just what these "consultants" do, although the closest we could figure is that they appear to play the role that corporate law firms usually do, but with some high-level arm twisting thrown in. For some of the "firm's" past overstepping of power and the law, check out http://www.fas.org/spp/starwars/congress/1992/h920428g.htm.
The best deal of all for Kissinger is that he is also the majority stockholder in a company with reserves estimated at $60 billion, making it the single largest gold deposit in the world and third largest open-pit copper mine. That is, he was the majority stock holder as of a few months ago - he may now be unloading certain damning assets as fast as he can dump them in the face of the growing international scrutiny by a list of countries he has harmed in the past 40 years.
In another ploy to throw the public off the scent, in January 2001, Kissinger named Roy J. Stapleton, a former U.S. ambassador to Singapore as “managing director” (i.e. head lobbyist) of Kissinger Associates. This accomplished two strategic things for Kissinger – it got his name off the “masthead” as "consultant" for FCX, and it will help carry on his own tradition of using inside government information to insure he gains an unfair advantage as a lobbyist.
Yep, Kissinger’s got a pretty good deal all right. Especially when you consider that FCX has never had to pay much of anything to anybody but a handful of stakeholders, which includes Kissinger, good ole boy Jim-Bob Moffett (who came on board as CEO in 1981) and their golf-playing pal Suharto (although I imagine his grip on the club might be a bit slippery, what with all that blood on them from the over one million men, women and children he has been responsible for slaughtering. If you want to get a feeling for just what sort of person “Jim-Bob” is, check out http://www.igc.apc.org/trac/feature/freeport/freeport.html - but take your airbag along.
The Irian Jaya "Pogrom"
Under Suharto’s odious Contract of Work, slapped together in 1967, Suharto handed 100,000 hectares of land in the southern area of West Papua, also called Irian Jaya, to FCX for its gold mine. Neither FCX nor Suharto cared that this was not their land to carve up, but belonged to the Amaungme and Komoro people, whose lineages go back as much as one million years, according to some anthropologists. The corporation simply seized the land and booted off the natives.. An estimated 2,000 people were shoved into concentration camp-like “settlements” over the next few years so their land could be turned into a giant gold mine, waste pits, processing buildings, airfields, roads, etc. (In FCX’s website, they claim no more than 1,000 people lived in the mine region at the start, but the statistics indicate this is a minimizing lie).
As the years went by, FCX gobbled up more and more forestland. Today, the operation consumes a monstrous 5.75 million acres. Instead of a few thousand natives scattered throughout the forest, able to sustain themselves off their land, FCX actually boasts in its website that Irian Jaya is now “home” to 100,000 people from all over the Indonesian region. It doesn’t add that most of them were displaced by other corporate or military operations or that they now live in congested, filthy shanty towns on the edge of the mining operation. The website says these people were drawn by the economic opportunity offered by the mine. What economic opportunity? There are only 7,000 or so jobs associated with the mining operation, most of which are filled by imported workers. The few jobs held by natives are unskilled.
But any protests by native peoples against the FCX “improvements” to Irian Jaya have been handled brutally. Thanks to Suharto and the steady supply of US weapons, FCX has been well-protected from uprisings. In fact, Irian Jaya is the most militarized zone in all of Indonesia – with a greater, more heavily armed military presence than even East Timor. There have been numerous human rights reports of atrocities by FCX’s “security forces.” Natives have been shot along the road as if they were objects for target practice, pulled off buses and murdered, others have been tortured, some have had their villages torched, yet others report being kidnapped and held prisoner in FCX packing crates. In one particularly horrendous instance, when natives blew up a slurry pipe carrying contaminated mine wastes, the military retaliated and slaughtered an estimated 900 people.
There is no doubt at all that Kissinger is completely aware of these atrocities. But then, according to a growing body of evidence, he was also aware of the atrocities in Chile, Cambodia, Argentina, and elsewhere – not only aware but, in some cases, was actively involved in helping to orchestrate them. In any case, there is no doubt he has been fully aware of the routine, environmentally devastating practices going on at the mine.
Environmental Nightmare Come True
Freeport-McMoran, which derives its name from its relationship with Rio Tinto, a British/Australian mining conglomerate that owns a 12% share in the operation, is outrageously wasteful by American standards (which themselves leave something to be desired). For every 300,000 tons of ore, only 0.42 parts per million in gold is extracted. This means that to get at the tiny fraction of gold, the mountain must, literally, be chewed to pieces. By 1996, nearly 400 feet had been ripped off the top of Puncuk Jaya Mountain – a mountain that was not only sacred to local natives, but also the highest peak between the Andes and the Himalayas.
Today, the rubble from FCX’s vast giant Grasberg Mine is dumped into two neighboring valleys. In the next few decades, the company expects to blast and bulldoze THREE BILLION TONS of rock, which will form vast mounds of dangerous, slide-prone rubble. Although it is illegal to dump tailings– a slurry of crushed ore, water, cyanide, arsenic, and other toxic chemicals used in ore processing - into American rivers, in Indonesia it is a routine practice. That’s because Kissinger and Jim-Bob are calling all the shots - they share equal billing at the FCX website, each being both CEO and chairman of the board of directors. Every week, millions of tons of tailings are dumped into the Ajkwa River. The accumulated waste has blocked and flooded the river several times, contaminating (cumulatively) over 100 square kilometers of once productive land. The contamination is, for all intents and purposes (as it may take hundreds of years to abate naturally) permanent. A recent study of abandoned gold and copper mines in the American west shows that land flooded by water laced by tailings is still contaminated decades after the end of mining operations. Some patches have become wastelands, while waters in some areas downstream of the origin of contamination are still barren. The toxics accumulate in tissues of animals, so the contamination level of fish and birds can gradually climb instead of abate.
The Freeport-McMoran operation has now thoroughly contaminated the region’s watershed, an area that is home to the Lorentz Reserve, a region rich in wetlands that contains one of just three equatorial glacier zones left on Earth. As far as 80 miles downstream from the mine, villagers have had to be relocated because of the danger that the dam holding back the huge, noxious lake of tailings might break. Some people have refused to leave. Said one elderly native: “God gave this land. I will not be moved from it. If I go, what is there for my children?”
The water in the Ajkwa river, which is the life blood of Irian Jaya , is now unfit to drink along much of its length. Native people, especially the elderly, who do not understand why they can no longer drink the water or eat the fish from their father’s and father’s father’s river, stubbornly persist. As a result, many have been poisoned and many have died from what the Indonesian medical personnel now call “mystery diseases.” Much like Gulf War Syndrome (which is believe to be caused by a mix of toxic chemicals), natives with “mystery diseases” develop strange skin lesions and rashes, chronic nausea, and may cough up blood. The natives have said that the sweet potatoes and taro they traditionally eat now have ominous discolorations, while the skin of the wild pigs that serve as meat appears diseased. To avoid being poisoned, natives must travel sometimes many miles to commercial markets and purchase food they once hunted and gathered for free, thus fueling their poverty even more.
Native Independence becomes Third World Squalor
Perhaps the harshest plight of all is that of the “relocated.” These once free, proud people of the forest are forced to live in squalid, crowded shanty town settlements – little better than concentration camps. There, they are plagued by high rates of malaria, cholera, tetanus, sexually-transmitted diseases, and malnutrition. Infant mortality is high - one in five infants do not survive – while the average life expectancy of adults is about 50 years (FCX’s “brochure” touts an increase in life expectancy in recent years, but, tellingly, fails to mention just what it is). Yet, West Papua’s central highlands have just ONE 70-bed hospital to serve 400,000 people. Despite the health risks posed by poverty coupled with a toxic environment, the Amaungme and Komaro people who chose to remain in their forest land near the mine have no access to any government medical care.
At the FCX website, there is a very long (too long – methinks they doth protest too much) section on how great things are going for the natives, how wonderful the environmental standards of the company are, how much the company has done for the natives. However, you will also notice that the “good example” being held up is not Freeport-McMoRan, but the Indonesian government’s smaller operation called Freeport-PI. But even the Freeport-PI accomplishments are somewhat pitiful. For example, we are supposed to be impressed that a whole $166 million was spent over an 11-year period on at least 100,000 people? That’s less than $200 per year per person. Meanwhile, Jim-Bob and HK probably hauled home at least $166 million between them from FCX during the same time!
The standard of life for the natives has little hope of improving. Freeport-McMoran’s labor practices systematically exclude natives, despite what their rosy little brochure would have you believe. Of over 17,000 workers (in 2000), just 100 or so were local natives, who were paid 70 cents per hour. FCX claims that as of 2001, just over 1,500 jobs are now held by natives – however, it doesn’t specify if those are local natives or just natives of Indonesia (i.e., workers imported from urban centers like Jakarta). The 1% fund the company set up for local natives has caused more problems and conflicts than it has helped – intentionally, say some human rights observers. Those overseeing the distribution of the funds are often corrupt; little of the money actually ever reaches those it was intended to help, and payments from FCX have been called arbitrary at best.
FCX’s approach to environmental outrages has consisted of liberal coats of whitewash. For example, FCX tried to make a $248,000 grant to HAMAK (Foundation for Human Rights Anti-Violence), an organization directed by Ms. Josepha Alomung, an activist who won the Goldman environmental prize in 2001. But Alomung was angered by the grant and refused to accept it. First of all, she had never applied for the grant, so it was obvious that FCX was trying to grab some “gain by association” it did not deserve through deceitful means. But even more glaringly, Alomung said she would never accept cash from an outfit whose activities ran so completely counter to her principles. Yet, in their website, FCX boasts that Ms. Alomung has been written them a letter of appreciation!
To date, FCX has never spent a dime on cleaning up the past devastation wrought by the mine – which is the equivalent in its extent of several of the largest “superfund sites” in the U.S.. The local people receive what amounts to $300 a piece per year compensation from profits – a gesture even more pitiful than Bush’s $300 per head tax rebate. Meanwhile good ole boy turned gold baron Jim Bob Moffett once scoffed at the idea that the monster mine was poisoning the river - dumping tailings into the Ajkwa’s waters was no big deal said Jim-Bob: “It’s the equivalent of me pissing in the Arafua Sea.” But Jim Bob’s pampered, self-aggrandizing view of reality, spouted from the comfort of his stateside mansion, isn’t worth the breath it’s printed on.
FCX's Almighty PR-Political Machine
The evidence of Freeport-McMoran’s gross environmental negligence and human rights abuses had grown so overwhelming by the mid-1990s, that the Overseas Private Investment Corps. (OPIC) canceled the company’s $100 million insurance policy in 1995, citing severe environmental problems. According to the OPIC report, FCX had “created and continues to pose unreasonable or major environmental, health, or safety hazards to the rivers that are being impacted by the tailings, the surrounding terrestrial ecosystem, and the local inhabitants.” But like all classic robber barons, Kissinger and Jim-Bob went on a vicious offensive to protect their illgotten gains. Immediately following the cancellation announcement, FCX brought out its big guns: money. Millions and millions of dollars were spent buying up magazine ads, TV time, and on strategic charitable donations. In short, they poured money into everything EXCEPT righting their wrongs. The company bought an entire half hour infomercial, which aired in Austin and New Orleans. In an incredible slap in the public’s face, the Public Broadcasting System station WLAE-TV in Texas aired the slot as an “educational special” at NO CHARGE! Warm-fuzzy full-page ads ran in “Newsweek” and “U.S. News & World Report.”
When journalists started writing articles or airing stories critical of Freeport-McMoran, it simply bought most of them off (a black eye to the field of honest environmental journalism). Among the sellouts: Bill Collier, formerly of the “Austin American-Statesman,” who became FCX’s Austin spokesman, and WWL’s Garland Robinette, who took a cushy job in FCX’s PR department. It must be noted that one journalist who wrote for the “Austin Chronicle,” Robert Bryce, not only turned down a lucrative bribe job from FCX, he went onto to write more hardhitting FCX exposes, including an extremely thorough investigative report in “Mother Jones” magazine.
Kissinger & Co. also scrambled to call in every favor and twist every arm they had access to. When Suharto tried to pressure Bill Clinton into intervening on FCX’s behalf against OPIC, Clinton, to his great credit, refused. A former CIA chief, with access to all sorts of ammunition it should have been unthinkable to use, was called into help fight OPIC. Swiss bankers, international insurers, and environmental regulators were flown into Irian Jaya all-expenses paid and given free luxury vacation-like visits and carefully choreographed tours of selected areas of the mine complex. If you want some insights into how Kissinger and Co. were able to pull off this illusion, please read http://tompaine.com/features/2001/01/30/index.html, which describes how this type of scam, called a "Potemkin Village" is routinely used by corporations with dirty linen to hide. In the end, it is not too surprising (though incredibly disappointing to those who believe in justice) that Kissinger’s clout once more prevailed and the mine’s insurance was reinstated.
So, in the wake of such a close call and a growing public spotlight on FCX, did the company make sweeping remedial changes in the way it handled environmental and human rights issues? Hardly. Instead, in 1997, the company asked permission to expand the operation to TWICE the size it was at the time. One of the last things done by Suharto (who owned a substantial share in the mine) before he was forced to resign by a nation burned out by his corruption, was to approve the expansion. This approval was granted following a cozy little private conference between him and Jim-Bob Moffett. Once Suharto was gone, the company had a harder time completing their outrageous request due to the resistance of the minister in charge of mining, Kuntoro, and the Indonesian intelligensia, who were outraged by the flagrant concessions and benefits already showered on FCX by Suharto.
However, good ole Jim-Bob just waited until the hopelessly weak new leader Habibie was installed in office, then started wheeling and dealing full force. Habibie, a pushover from day one, caved in readily. By now, Kuntoro was being pressured relentlessly by western corporations used to being given special above-the-law treatment by their “buddy” Suharto. Kuntoro was finally forced to agree to the expansion, but demanded that the mine clean up its environmental act and pay a higher royalty rate to the government. Unfortunately, most environmentalists say any environmental standards imposed on FCX remained on paper only.
Bringing Habibie and Wahid to Heel
The next “crisis” for FCX came when Habibie was ousted and replaced by Wahid, whom many Indonesians hoped would nationalize operations such as FCX, demoting such western gold and oil barons to the “paying guest” status which should have been theirs from the start. But Wahid, just like Habibie, proved to have feet of clay when pressured by Jim-Bob and Kissinger. In early 2000, shortly after Wahid took over, Kissinger went to Indonesia and began a process of combined intimidation and corporate bribery aimed at extracting a promise from Wahid that he would not nationalize FCX. Rather than act in Indonesia’s best interests and demand that Kissinger completely overhaul FCX’s environmental and labor practices, in February, 2000, the corrupt Wahid made Kissinger an advisor on foreign affairs! Not only that, but he apparently gave FCX more concessions than ever.
In its blurb on the NY Stock Exchange site, FCX boasts that the cost of producing gold and copper at FCX is just about the cheapest in the world (of course it is! They have no overhead, no fines, minimal taxes, pay less than $1.00 per hour for laboring jobs and never really paid for their land). It also boasts that production is at an all time high (we can just picture the devastation this is translating into!), while the costs of production and delivery are “lower than ever” (this hardly sounds promising for the local economy and workers!). It is also noted in the blurb that the company was “relieved of” its $6 million per year commitment to West Papua. This sounds suspiciously as if Wahid absolved the corporation of fulfilling their obligation to return some of its profits to the people of West Papula. In any case, the company’s revenues between January and July of this year were an astounding $985 million – almost one billion dollars.
Surfing on a Political Tide
The graph for FCX stock closely mirrors the course of U.S. and Indonesian political events – proving that the company’s wealth is based heavily on political favor. Last summer, with the unsympathetic Clinton still in office and Wahid’s reign weakening, the stock was hovering at a lowish point. Then, toward December 1, when it became apparent Bush would succeed in stealing the White House, the stock steadily climbs again, only to fall again in late May and June when Wahid toppled from power. By the way, in 1999-2000, FCX made election donations in the U.S. amounting to over $262,000, an estimated 2/3 of which went to the GOP. (Much of the money spent on the Democratic Party over the years has been done with an eye to insuring that FCX’s close ally (and bad apple Democrat) John Breaux of Louisiana would keep winning his senate seat, which, of course, he has.) It should also be pointed out that within days of Bush’s inauguration, Kissinger was dining with the new White House resident and Cheney at the home of former CIA “mockingbird” Katharine Graham. It should also be noted that well-grounded rumors allege that one of the names topping Cheney’s secret energy task force list is Henry Kissinger. No wonder the White House wants to keep it secret!
Now that Wahid is gone and Sukarno’s daughter, Megawati, has been made president of Indonesia, it will be very interesting to see what sort of inimidation, calling in of favors, bribes and pressures Kissinger and good ole Jim-Bob try to unleash and how dedicated to the welfare of her people and her father’s memory Megawatti will prove to be.
“The Mining Menace of Freeport-McMoRan” by Pratap Chatterje, “The Multinational Monitor,” April 1996. http://www.etan.org/news/kissinger/themine.htm
“Freeport Obtains Indonesian Approval to Expand World’s Largest Gold Mine,” Mike Head, World Socialist Website, February 20, 1999 http://www.wsws.org/articles/1999/feb1999/free-f20.shtml
“Former Secretary of State Kissinger Remembers,” East Timor Action Network (Etan); Site provides large excerpt from “The Case Against Henry Kissinger” by investigative reporter Christopher Hitchens http://www.etan.org/news/kissinger/
“Realpolitik, “ Robert Bryce, “Austin Chronicle,” May 19, 2000 http://www.auschron.com/issues/dispatch/2000-05-19/pols_feature2.html
Statement by John Rumbiak, the West Papua Institute for Human Rights Study and Advocacy (submitted at the annual general meeting of Freeport-McMoRan Copper and Cold, Inc.) May 3, 2001
Drillbits and Tailings, March 17, 2000 News update
“Spinning Gold,” by Robert Bryce, “Mother Jones Magazine”, Sept/Oct 1996 http://www.etan.org/news/kissinger/spinning.htm
“Gus Dur: Don’t Sell Papua’s Future to Henry Kissinger,” Statement by Emmy Hafild, Exec. Director of WALHI-Indonesia Forum for Environment, Friends of the Earth Indonesia http://www.moles.org/ProjectUnderground/drillbits/970421/97042102.html
“Old State, New Society: Indonesia’s New Order in Comparative Historical Perspective,” Benedict R. O’G. Anderson, “Journal of Asian Studies,” May, 1983
“Generals and Business in Indonesia,” Harold Crouch, “Pacific Affairs”, Winter 1975/76
“People Were Shot, Bleeding, and Lying on the Ground,” Mike Head, World Socialist Web Site,” Nov. 28, 1998 http://www.wsws.org/news/1998/nov1998/pap-n28.shtml
“We Saw Terrible Slum-Like Conditions and a Very Strong Army Presence,” Mike Head, World Socialist Website, Dec. 1 1998. http://www.wsws.org/news/1998/dec1998/pap-d01.shtml
“U.S. Mine Gouges For Gold,” Danny Kennedy, “Earth Island Institute Journal,” Spring 1997 http://www.thirdworldtraveler.com/Environment/GoldFreeport_EII.html
“Lawsuit in New Orleans,” Statement of Lawsuit of Irian Jaya natives versus FCX http://www.moles.org/ProjectUnderground/motherlode/freeport/lawsuit.html
“Election Donations of Freeport, 1999-2000” http://www.moles.org/ProjectUnderground/drillbits/5_16/vs.html
“Statement of John Rumbiak” http://www.moles.org/ProjectUnderground/mining/freeport/statement010503.html
CorporateWatch: Statements by Jim-Bob Moffett http://www.igc.apc.org/trac/feature/freeport/freeport.html
Photo of Gouged Out Mountain at FCX Mine in Irian Jaya http://www.geocities.com/RainForest/1387/freeport.html