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Global Gold Rush

The Story of Freeport-McMoRan in Indonesia
by Joshua KarlinerCorpWatch
May 19th, 1997

Gold is an intoxicating substance. Witness the rapidity with which investors threw their money into a relatively obscure Canadian mining corporation called Bre-X, when that company claimed to have discovered the largest single deposit of the metal in history.

Thousands of small and large investors quickly sobered up however, when the promise of an illusory $70 billion motherlode suddenly evaporated. Many will suffer a financial hangover for years. Yet this highly publicized investment debacle is inconsequential when compared to gold's more significant impacts.

The lust for gold is fatal to many. For this reason, the Bre-X scandal should be seen as relatively minor in comparison with the deadly social and environmental impacts transnational mining corporations unleash upon the people and terrain where they operate.

When understood in this light, the Dayak people, who live in a far corner of Indonesian Borneo where Bre-X supposedly struck it rich, were lucky that the "find of the century" turned out to be a hoax. If it had been for real, the Dayaks would in all likelihood have found themselves in a similar situation to that of indigenous peoples the world over whose traditional lands have been usurped by mining operations.

Given that the Feeport McMoRan corporation -- the focus of this CorpWatch Issue -- had positioned itself to develop Bre-X's Busang deposit, it is almost certain that the Dayaks would have faced an onslaught of human rights violations, environmental destruction -- including air, water and land pollution -- and the overall devastation of their traditional ways of life.

It is Freeport's presence in Indonesia that has inspired CorpWatch to team up with a member of our Affiliate Group, the goldbusting Project Underground, to produce this Issue.

In addition to being one of the major players in the Bre-X debacle, Freeport, in cahoots with the Indonesian government and members of the ruling Suharto family, also owns and operates Grasberg -- the largest gold mine in the world. This massive operation is located on another Indonesian island known alternatively as Irian Jaya or West Papua.

The story of Grasberg, formerly known as Jayawijaya mountain, a sacred site of the Amungme people, is symptomatic of the tragedy of the gold mining industry as a whole. It is a dynamic, as the "Human Rights" section of this feature documents, of community resistence to mining and transnational corporate collusion with a repressive local military that aims to maintain a "healthy" climate for foreign investment.

It is also a story, as is told in the "Environment" section, of deteriorating human and environmental health. Freeport is pursuing a course of development so destructive of local communities and ecoystems, that it would not be tolerated in most any "developed" nation. Polluted rivers, torn down mountains and poisoned villages punctuate the environment around the mine. This practice of double standards is endemic to economic globalization; it is particularly prevalent in the mining industry.

In fact, transnational mining corporations are actively seeking pollution havens in the Third World. As the investment advisory service Control Risks Group reports: "Tighter environmental regulation at home has helped prompt the expansion abroad of North American and European mining companies."

The voices of the affected communities, found in "Community Perspective" and the in speech by Amungme leader Tom Beanal, most graphically describe the situation in Irian Jaya -- and for that matter many places, North and South, East and West where transnational mining corporations operate. In the words of one Amungme, "Freeport is digging out our mother's brain. That is why we are resisting."

In contrast, Freeport CEO Jim Bob Moffett has his own violent metaphor to describe his corporation's operations. He sees his Indonesian mountain of gold as "a volcano that's been decapitated by nature." Moffett describes Freeport's Irian Jaya operations as "mining the esophagus" of this headless volcano. You will find this, and a number of other more than memorable quotes from Mr. Moffett in our "Corporate Profile."

There is no doubt that a global gold rush is on, consuming local communities and ecosystems with a raging fury. Freeport in Indonedia is but one example. Aided and abetted by the forces of corporate globalization, the breadth and depth of the transnational corporations' endeavors makes gold mining lore of days gone by -- while not inconsequential -- pale in comparison.

-- Joshua Karliner for the CorpWatch Editorial Board