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Freeport to pay Papua portion of disputed surface water tax

May 13, 2019

Freeport to pay Papua portion of disputed surface water tax

Victor Mambor The Jakarta Post

Phoenix, Arizona / Mon, May 13, 2019 / 07:09 pm

A dispute between the Papua provincial administration and PT Freeport Indonesia over a surface water tax has been resolved after Papua Governor Lukas Enembe met with Freeport Indonesia president commissioner Richard Adkerson at the Freeport McMoran headquarters in Phoenix, Arizona, United States.

The two parties agreed to a Rp 1.39 trillion (US$96.4 million) surface water tax, which was smaller than the amount the Papua administration wanted but bigger than what Freeport was initially willing to pay.

Adkerson, who was accompanied by Freeport Indonesia CEO Tonny Wenas, said that Freeport was not obliged to pay the tax the Papua administration had requested since 2011, as the Supreme Court had ruled in favor of Freeport in April last year. The Supreme Court freed Freeport from an obligation to pay roughly Rp 3.9 trillion in tax.

Previously, the tax court, which is a lower court than the Supreme Court, ruled in favor of the Papua administration concerning unpaid taxes of almost Rp 6 trillion.

“Based on the decision by Indonesia’s highest court, we are not obliged to pay the tax. However, Freeport and the Papua administration have good intentions for long term cooperation to support Freeport Indonesia’s operations for the sake of Papuans’ prosperity,” Adkerson said on Wednesday after meeting with Lukas.

Adkerson said Freeport would pay part of the disputed surface water tax from 2011 to 2018, which was Rp 1.39 trillion.

“[The tax] will be paid over three years, starting from 2019 to 2021,” Adkerson said last week.

In addition, starting from 2019, Freeport will pay an annual surface water tax of US$15 million per year, as regulated by its special mining business permit.

The tax dispute between the Papua administration and Freeport began in 2011. Freeport believed it only owed the tax stipulated in Bylaw No. 5/1990, which had a tax rate of Rp 10/m3, when the working contract was signed. Meanwhile, the Papua administration wanted Freeport to pay the tax stipulated in Bylaw No. 4/2011 on regional tax, which had a tax rate of Rp 120/m3.

Governor Lukas said the Supreme Court’s ruling that Freeport Indonesia did not need to pay any surface water tax should not be used an excuse by the company to not pay any taxes.

He said Freeport and Papua would issue a memorandum of understanding (MoU) in the near future that would detail the amount to be paid and the schedule of payment.


2) Indonesia loses Pacific asset in Franzalbert Joke

4:41 pm on 13 May 2019

Johnny Blades, RNZ Pacific Journalist

Indonesia has lost a significant asset from in its Pacific diplomacy efforts with the recent passing of the West Papuan, Franzalbert Joku.

Reflection on West Papuan who occupied both ends of politics duration 6′ :48″ from Dateline Pacific
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Reflection on West Papuan who occupied both ends of politics The prominent Sentani landowner was the international spokesman for the Papua Presidium Council which galvanised momentum in the independence struggle at the turn of the century.
But in his last decade, Mr Joku strongly advocated autonomy for Papua within Indonesia rather than independence. He often represented Indonesia at regional meetings of the Melanesian Spearhead Group and the Pacific Islands Forum.
Mr Joku, who died at the age of 66 late last month in Jayapura, had fled from Indonesian rule in his homeland as a youth with his family in the early 1970s. For around three decades he lived in various parts of Papua New Guinea where Mr Joku worked as a journalist and a PNG government advisor who developed extensive links in the Pacific.
An expert in Indonesian history and politics, Richard Chauvel of the University of Melbourne, says Mr Joku’s career in PNG was significant.
"His great utility both in the early 2000s (for the Papua Presidium) and post 2007/8 for the Indonesian government has been his intimate knowledge of Papua New Guinea politics, through his role as a journalist and then as a political advisor or spokesman for (former PNG PM) Julius Chan and other senior PNG politicians," Dr Chauvel said.
"I think it’s that knowledge of local PNG politics, and through networks into the Pacific, that made him such a formidable figure, both initially for the Presidium, in the lobbying of the Melanesian Spearhead Group and the Pacific Islands Forum, and then subsequently for doing much the same thing, utilising the same skills and knowledge for the Indonesian government," he explained.
Listen to Dateline Pacific interview with Dr Richard Chauvel regarding Franzalbert Joku duration 6′ :48″ from Dateline Pacific
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Listen to Dateline Pacific interview with Dr Richard Chauvel regarding Franzalbert Joku
As an effective envoy for Jakarta, Mr Joku had a forthright approach to his diplomacy, as evidenced last year by his instrumental role in pressing the Solomon Islands government to mollify its support for West Papuan self-determination aspirations:
Occupying both extremes of the Papuan political spectrum over time made Franzalbert Joku a polarising figure in the eyes of West Papuans.
"The way he executed those positions was remarkably the same – with great commitment, very articulate, he was obviously a bright guy… you could never accuse him of being nuanced," Dr Chauvel said.

Dr Chauvel first met Franzalbert Joku when he was lobbying for the Presidium, the organisation which energised the independence struggle as democatic space opened up briefly in post-Suharto Indonesia around the time of the Papua People’s Congress in 2000 in Jayapura.
"He was just as vigorous and forthright in his advocacy of that position as he later became from 2007/8 onwards when he’d clearly joined the other side," he said.
Indonesia’s Foreign Affairs Ministry has a number of officials who have led delegations to MSG and Pacific Forum meetings over the past decade.
"They have acquired some of that background knowledge, but I don’t think that they can speak to their counterparts in Vanuatu, Fiji, Solomon Islands and PNG from the same position as Franzalbert could, as a Pacific Islander," Dr Chauvel said.

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