http://www.thejakartaglobe.com/business/new-zealand-fund-pulls-freeport-investment-cites-papua-rights-offenses/546892 New Zealand Fund Pulls Freeport Investment, Cites Papua Rights Offenses Jonathan Vit | September 27, 2012
An aerial view of a giant mine run by US firm Freeport-McMoran Cooper & Gold, at the Grassberg mining operation, in Indonesia's Papua province in this July 2005 file photo. (Reuters Photo/Stringer) New Zealand’s public pension fund pulled more than $1 million in investment from Freeport-McMoRan Copper & Gold over allegations of human rights offenses committed by security forces around the company’s controversial Grasberg mine in Papua. The $15.7 billion New Zealand Superannuation Fund announced on Wednesday that it would cease investment in four companies that violate international ethics standards. The fund raised concerns over “breaches of human rights standards by security forces around the Grasberg mine, and concerns over requirements for direct payments to government security forces by the company in at least two countries in which it operates.” Indonesian security forces have a heavy presence in the restive province, where police and the Indonesian Military (TNI) are ostensibly suppressing a decades-long insurgency waged by members of the Free Papua Movement (OPM). But Human Rights Watch, citing leaked military documents, has alleged that security forces have targeted everyone from tribal leaders to political activists in Papua. Security forces routinely suppress pro-independence groups in the province, jailing those caught flying the “Morning Star” flag for treason and killing local leaders suspected of being separatists, like Reverend Kinderman Gire and Mako Tabuni, of the West Papua National Committee (KNPB). Security forces hired by Freeport’s local subsidiary also engage in regular firefights with unknown gunmen along a road leading to the mine in Timika, Mimika district. The OPM operates from a base in Puncak Jaya, near the Grasberg mine. The fund concluded that while Freeport’s human rights policies have improved in recent years, the activities of the government forces it employs are beyond the company’s control. “This limits the effectiveness of further engagement with the company,” the fund said in a statement. Human Rights Watch applauded the move, calling it “a sound decision indeed.” “Businesses are getting more and more conscious about human rights abuses,” said Andreas Harsono, a researcher with HRW. “Sound businesses do care about human rights.” The Ministry of Defense declined to comment on the move. Papua Police, local representatives of the TNI and Freeport Indonesia were unavailable for comment by deadline. The fund had $1,062,061 in holdings in Freeport as of June 30. Japan’s Tokyo Electric Power Company, China’s Zijin Mining Group and construction and defense firm KBR were also dropped from the fund’s portfolio. All four were dropped after the fund decided that they were unlikely to affect any change in their policies. “In making a decision to exclude a company from our portfolio, one of the tests we apply is whether engagement with the company might realistically lead to sufficient improvements,” the fund said. “We have come to the conclusion that further engagement by the Fund with these companies is not likely to be effective. “We would rather focus our efforts on companies where we believe we can make a difference.” The fund’s equity portfolio includes shares in more than 6,500 companies. It manages the government pension fund available for all New Zealand residents 65 and older. Freeport, which runs the largest copper mine in the world at Grasberg, has a market capitalization of $37.29 billion and pulled in $3.17 billion in net income last year. Seventy-three percent of its shares are held by institutions and mutual fund [Non-text portions of this message have been removed]
