In late August, it was announced that a long awaited deal between the US mining behemoth Freeport McMoRan and the Indonesian government was in its final stages. The centrepiece of the negotiations was the Grasberg Mine, the largest gold and second largest copper mine in the world. Located within the restive Indonesian province of Papua, the Grasberg Mine is one of the backbones of Indonesia’s mineral exports, with annual gold and copper outputs being valued at $3.1 billion in 2015. The proposed agreement would see Freeport’s ownership of the mine diminish from 90.64% to 49%, and its mining contract progressively extended out to at least 2041.
With all eyes on the Indonesian government’s recent push for resource-nationalism, the call of local Papuan leaders to bring the resource-rich province’s indigenous population into the fold is almost certainly falling on deaf ears. Lessons learnt some 2,000km east in the aftermath of the Bougainville conflict—lasting between 1989 and 1998—can and should be paid due attention in looking at the future of the Grasberg Mine.
The Indonesian province of Papua, located across the border from Papua New Guinea (PNG), has been grappling with a low-intensity insurgency and allegations of human rights abuses since being absorbed into the Indonesian state in 1969. Organisasi Papua Merdeka (OPM), or the Free Papua Movement, has been the main opposition to Indonesian control since then, peaking as an active insurgent group in the 1970s. Today, the movement largely remains an international political movement as opposed to a fighting force in the mountainous jungles of Papua.
Despite the OPM’s shift to political activism as a means of achieving self-determination, Papua is by no means rid of conflict. A culture of fear fuelled by overt military and police actions, a controversial transmigration program which has resettled Indonesian Muslims amongst a predominantly Christian Papuan population, and both labour and environmental disputes over the Grasberg Mine have continued to fuel conflict in Indonesia’s easternmost province. Most recently, August saw a series of violent demonstrations and arson attacks over labour disputes between local employees and Freeport.
As Papua wrestles with its plethora of issues and a systematically constrained will for self-determination, the Autonomous Region of Bougainville—once marred by a decade long civil conflict—is preparing itself for a long-awaited referendum on independence from PNG in June 2019. Much like Papua, Bougainville’s history is defined by its quest for self-determination and its abundance of natural resources. As Papua is Indonesia’s easternmost province, Bougainville too was on the periphery of PNG, having closer ethnic, tribal and customary ties to the neighbouring Solomon Islands than PNG itself.
Bougainville’s Panguna Mine holds one of the largest copper reserves in PNG, and was operated by Bougainville Copper Limited (BCL) until its forced closure in 1989. Whilst operating, BCL had a tentative relationship with local Bougainvilleans. Issues surrounding the presence of a foreign mining company and workers, environmental degradation, and pay and compensation disputes all culminated into acts of sabotage against BCL and subsequently a civil war. Whilst there are stark similarities between Panguna and Grasberg, alarmist rhetoric would be uncalled for—at least in the foreseeable future.
Despite the apparent similarities between Papua and Bougainville, there are several key differences which should be noted. Firstly, the Panguna Mine in Bougainville was 56% owned by BCL—with only 20% actually owned by the PNG government at the time. BCL’s majority ownership over the mine, as well as the PNG government’s reliance on its revenue (some 45% of export revenue), meant that there was little control over BCL’s interaction with local landowners. Given the reliance of PNG’s economy on the Panguna Mine and the relatively loose grip security forces actually had on Bougainville—it’s no surprise that the PNG government’s heavy military response to acts of sabotage by disgruntled landowners paved the way for an insurgency by the Bougainville Revolutionary Army. Indonesia’s relatively strong grip over Papua, its most recent push to nationalise ownership of the Grasberg Mine and its more diverse economy mean such an incident is unlikely.
But that doesn’t mean conflict in the far-eastern reaches of Indonesia isn’t impossible. Whilst self-determination and a will for independence from PNG were already simmering in Bougainville, it was grievances over the Panguna Mine which brought the island to a violent boil over a decade long insurgency. And so long as the ancestral lands of Papuans continue to be exploited and degraded without due consultation, it remains a possibility that the restive region’s simmering will for self-determination may yet again be brought to the boil.
Patrick Dupont is the Indo-Pacific Fellow at Young Australians in International Affairs.