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Potential loss of revenue from Freeport has reached 6 trillion rupiah

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PT Freeport Indonesia mining area in Mimika Regency, Papua – Jubi / IST

Jakarta, Jubi – The Supreme Audit Agency (BPK) found that the potential loss of non-tax state revenues (PNBP) of PT Freeport Indonesia (PTFI) Contract of Work for the period 2009-2015 amounted to 445.96 million US dollars or Rp6.02 trillion exchange rateith, w assumption Rp13.500 per US dollar).

Supreme Auditor IV BPK Saiful Anwar Nasution said the Government through Government Regulation Number 45 Year 2003 as already amended by Government Regulation Number 9 Year 2012, has determined the amount of fixed contribution rate, royalty and additional royalty, but PTFI still uses the tariff stated in Contract of Work (CoW) which amount lower, and not adjusted to the latest tariffs according to the government regulations, thus resulting in the loss of potential PNBP.

Based on Government Regulation No. 9 of 2012, copper royalty rates are set at 4 percent, gold 3.75 percent, silver 3.25 percent. While in the work contract, the copper royalty tariff is 3.75 percent, gold 1 percent, and silver 1 percent.

“According to the BPK, the royalty must be in accordance with the PP, but it has been fixed, while the fix it too late,” said Saiful during a discussion at the BPK Office, Jakarta, Tuesday (October 3). The main problems, one of which is internal control in the Freeport Indonesia Contract of Work includes the implementation of policies that result in the loss of potential revenue.

Nevertheless, Saiful confirms that BPK’s findings only show potential state losses, not state real losses.

“The potential is not really a material loss, if we do not do something, it could be a loss, so we recommend not to deposit it first, we recommend it to do something first, otherwise it is called a state loss” Saiful said.

Inspection of PT Freeport Indonesia (PTFI) Working Contracts (PTFI) for 2013-2015 is conducted at the Ministry of ESDM, Ministry of Environment and Forestry (LHK) and other relevant agencies. The examination of PTFI COW 2013-2015 aims to assess PTFI’s compliance with its tax obligations, non-tax revenues (royalties and fixed fees) as well as export duties, assess compliance with environmental regulations and examine whether PTFI’s extension of contract and divestment PTFI’s shares have been in compliance with the laws and regulations.

The examination results of PTFI CoW concluded that the management of mineral mining at PTFI has not been fully implemented in accordance with the provisions in place to ensure the achievement of the principle of sustainable and environmentally sound natural resource utilization for the greatest prosperity of the Indonesian people.

The conclusions are based on the weaknesses occurring in the PTFI CoW from the aspects of state revenue, the environment, the extension of work contract and divestment of shares, whether related to internal control or compliance with the provisions of the law.

Based on the BPK data, the examination results of PTFI KK in 2013-2015 revealed 14 findings containing 21 problems. These issues include 11 weaknesses of the Internal Control System (SPI) and 10 non-compliance with statutory regulations valued at 181.45 thousand US dollars, or equivalent to Rp2.41 billion.

Earlier, in 1967, the Government of Indonesia signed a first generation agreement with one of the companies from the United States. The COW Agreement was renewed to the V-generation KK in 1991. PT Freeport Indonesia’s working areas include Blocks A and B which are spread over seven districts in Papua Province.

In the period 1967-2015, PTFI experienced several changes in the composition of shareholder ownership. As of December 31, 2015, 81.28 percent of PTFI’s shares are owned by Freeport McMoRan (FCX), while the Government of Indonesia and Indocopper each have 9.36 percent. But to note, Indocopper shares are wholly owned by FCX.

The issuance of Law Number 4 Year 2009 on Mineral and Coal Mining becomes the strong legal basis for the government in encouraging companies to develop and increase the added value and benefits of mining business activities optimally. In accordance with the mandate of Article 169 paragraph (2) of Law Number 4 of 2009, the provisions in Article PTFI CoW shall be adjusted (renegotiation) with the Government of Indonesia no later than 1 (one) year since its enactment.

Since 2010 KK renegotiations have been implemented by several government-formed teams. In 2015 the results of the renegotiation emphasize on six strategic issues, namely the area of ​​work, the continuation of mining operations, the state revenue of processing and refining obligations, divestment obligations and liability of the use of goods, services, and domestic labor.(Antara/Zely Ariane)

Economy

Migration is a factor of increasing poverty in Papua

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Indigenous Papuans. – Jubi / Doc

Jayapura, Jubi – Septer Manufandu, the former Executive Secretary of Non-Governmental Organization Working Forum of Papua (FOKER LSM Papua), stated stakeholders in Papua need to the right solution to strict the flow of migration into Papua.

So far, he said that Papua is an open region and anyone is free to come to Papua without strict control. Therefore he urges the authority to establish a proper mechanism to control the migration, but respect everyone’s right at the same time.

“In the Special Regulation about Population, it does not prohibit people outside of Papua to enter Papua, but rather to control it. So migrants must have a clear purpose coming to Papua,” Manufandu told Jubi on Friday (9/9/2018).

Meanwhile, a Papua Parliament Member Mustakim said a factor that causes the increase in the percentage of poverty in Papua is the rapid influx of migrants.

“No matter how hard the government tried to reduce the poverty rate in Papua, it becomes difficult to work as people from the outside continue to come,” said Mustakim.

Furthermore, he said a proper solution to regulate the influx of population in Papua is the government should stipulate the provincial regulation (Perdasi) or special regional regulation (Perdasus) on migration. (*)

 

Reporter: Arjuna Pademme

Editor: Pipit Maizier

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Economy

Enembe plans to review autonomy funds distribution

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Papua Governor Lukas Enembe stood in front of the Ministry of Internal Affairs Office. – Jubi / Alex

Jakarta, Jubi – Governor Lukas Enembe said he would evaluate the distributions of Special Autonomy funds allocated for districts and municipality in Papua. Before, the 80 per cent of funds were allocated for districts and municipality, while the remaining 20 per cent was for the provincial government.

“We will recalculate the distribution of autonomy funds and implement what it has been best decided,” the governor told reporters on Wednesday (5/9/2018) in Jakarta.

Regarding the number of funds allocated, he said the provincial government could not yet determine the portions for each district and municipality because it would decide through a thorough study.

“We shouldn’t talk irresponsibly, because it needs the more in-depth study to decide. The distribution of the autonomy funds must not cause problems in the future, and it should be agreed by all regional governments,” he said.

Moreover, the governor said the Papua Provincial Government need to allocate a large portion of its provincial budget for the realization of the National Sports Event 2020. In addition, the handover of high school management from the regional governments to the provincial government also need a lot of funds. (*)

Reporter: Alex Loen

Editor: Pipit Maizier

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Economy

Bali, Papua and West Papua become a pilot project for drafting regulations on communal land

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Jayapura Regent Mathius Awoitauw photographed among regional leaders and speaker of the Ministry of Agrarian Affairs. – Jubi / Engel Wally

Bali, Jubi – The Ministry of Agrarian Affairs of the Republic of Indonesia launched the Government Regulation on Customary Land on 3-5 September in 2018 in Bali. Three provinces, Bali, Papua and West Papua, are set to become the pilot project of the regulation.

Jayapura Regent Mathius Awoitauw, who also attended the event, said they temporarily hold the conclusion of seminar due to a necessity to formulate a draft regulation regarding the regional customary lands.

Moreover, he said the regulation should be made upon the consultation with the customary landowners themselves.

Both provinces, Papua and West Papua, do not acknowledge the terminology of the land of state but the customary land which is owned by indigenous peoples,” explained the Regent at Jimbaran Perkanti Stadium, Bali, after giving his support to Kenambai Umbai team who competed in Menpora National Series Cup on Wednesday (5/9 / 2018)

Meanwhile, the Coordinator of Jayapura Regional Customary Council (DAS) Daniel Toto said the landowners must be involved in establishing the regulation on the customary land.

It would be a crucial issue if the local government does not involve the customary landowners in drafting a regulation on communal land. Therefore, I agreed with Jayapura Regent who proposed postpone until the consultation with the customary landowners in the respective regions,” he said. (*)

 

Reporter: Engel Wally

Editor: Pipit Maizier

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