The operator of one of the world’s biggest copper and gold mines was at the centre of a major political scandal in Indonesia after confirming that the speaker of parliament tried to extort shares from the company to ensure its contract extension.
Maroef Sjamsoeddin, head of Freeport McMoRan Inc’s Indonesian operations, told the parliament’s ethics panel he secretly recorded a meeting in which speaker Setya Novanto asked for a 20 percent stake, estimated to be worth billions of dollars, in the U.S.-based company’s Indonesia unit.
His remarks on Thursday came after Energy and Mineral Resources Minister Sudirman Said reported Novanto to the ethics panel last month and submitted a transcript of the conversation recorded by Sjamsoeddin.
In the recording, Sjamsoeddin said, Novanto indicated that a 20 percent stake be given to President Joko Widodo and Vice President Jusuf Kalla. Novanto allegedly told the Freeport executive that he could ensure the miner’s contract would be extended from 2021 to 2041. Read More: http://www.reuters.com/article/indonesia-freeport-probe-idUSL3N13T1WX20151204
Indonesian President Joko Widodo who it appears would have been the primary beneficiary of the bribe worth over $1 billion, has been referred to as the “Obama” of Indonesia, because of similar policies and style to Obama, who incidentally grew up in Indonesia from the age of 6 to 10. He was elected with promises of ending corruption.
Indonesian Vice President Jusuf Kalla (who it would appear would also be a major beneficiary of the bribe) called on parliament’s speaker to step down over a recording suggesting he sought shares in Freeport-McMoRan’s Indonesian unit in return for helping the mining giant extend its government contract to operate.
A parliamentary ethics committee is probing Setya Novanto, who has been under pressure since the recording surfaced last month of him speaking during a meeting with PT Freeport Indonesia chief executive officer Maroef Sjamsoeddin, a former deputy intelligence chief. Sjamsoeddin said he recorded the conversation for his “protection.”
The affair puts his position at risk and could spur a shakeup in the leadership of the parliament that elevates factions more supportive of President Joko Widodo, giving him traction for his economic reforms. It also has implications for the powerful Golkar party, of which Novanto and Kalla are members, which is split on whether to formally join the ruling coalition.
“He must step down,” Kalla said last week in an interview in Jakarta, referring to Novanto. “The main asset of the parliament is credibility and trust. If trust no longer exists, a person can’t be speaker of the house.” The ethics committee has not given a timetable for handing down the results of its investigation.
Freeport, which mined $2 billion in copper and $1.4 billion in gold in 2014 from its massive Grasberg mine in eastern Papua province, is seeking an extension to its contract that expires in 2021. The government says it can only legally start negotiations in 2019. Freeport Indonesia has agreed to sell about 20 percent of its shares as part of a contract negotiation.
Video of the mine:
In the 80-minute recording played last week in the parliamentary hearing, Sjamsoeddin and Novanto discuss the extension of Freeport’s contract, the sale of shares and a planned power plant in Papua. In oblique remarks, Novanto and an oil importer who also attended the meeting sometimes invoke the names of Widodo, Kalla and security minister Luhut Panjaitan. The country’s police chief was quoted in local media saying it’s not illegal to tape a conversation.
After testifying to the parliamentary committee Monday, Novanto refuted using Widodo and Kalla’s names to seek shares in Freeport Indonesia. “I have conveyed in detail that I’m not guilty,” he told reporters. “I have delivered it as clearly as possible.” Read More: http://www.bloomberg.com/news/articles/2015-12-06/indonesian-mining-graft-scandal-puts-house-speaker-under-a-cloud