Freeport and the Suharto Regime, 1965-1998
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2002
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University of Hawai'i Press
Center for Pacific Islands Studies
Center for Pacific Islands Studies
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Abstract
In 196 7 the transnational mining company Fre e p o rt was the first foreign company
to sign a contract after Sukarno was sidelined by Suharto. Eventually, Freeport-
McMoRan Copper and Gold, through its subsidiary PT Fre e p o rt Indonesia, came
to operate the biggest gold mine and lowest extraction-price copper mine in the
world in the isolated mountains of the Indonesian province of West Papua. It
also became politically and economically significant to the Suharto regime. In the
absence of the central government, the American mining company became the de
facto developer and administrator of its concession in West Papua while in the
United States it served as an important political lobby group for Jakarta. With
Freeport becoming the largest taxpayer in Indonesia, one of the largest employers,
and eventually running one of the largest socioeconomic programs in the
republic, it was described by Suharto as essential to the nation’s economy. Freeport’s
importance encouraged the development of mutually beneficial and supp
o rtive relationships between the company, the Indonesian president, his military,
and the nation’s political elite. In return, Freeport was politically and physically
protected by the regime. Eventually, Freeport’s financing of the president and his
cronies’ interests in the company threatened to see Freeport violating the United
States’ Foreign Corrupt Practices Act.
Today Freeport’s past relationship with Suharto has made it a high-profile target
for anticorruption reformers in Indonesia. Because of the pivotal economic
role the company continues to play in Jakarta and West Papua, any question of
future independence for the province will be inextricably linked to the company.
Description
Keywords
corruption, Freeport, Indonesia, mining, Suharto, West Papua, Oceania -- Periodicals.
Citation
Leith, D. 2002. Freeport and the Suharto Regime, 1965-1998. The Contemporary Pacific 14 (1): 69-100.
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