A Business

Papua is a small state in Indonesia. The mining company Freeport McMoran is the main industry in the country. The company runs mining activities in Grasberg, once a poor and remote area of the country. The company, under the protection of military officials, perpetrates illegal dumping of waste at the Grasberg mine. The country has experienced both military rule, and autocracy of a dictator. Since the 1960s, when the mining company was established in the state, it caused gradual environmental harm while establishing a modern infrastructure in the locality of the mining company. When James Moffet, the founder of the company, decided to venture into New Guinea decades ago, he found himself in a dilemma of deciding on the way forward, bullied by a rouge administration, and enticed by the rich copper and gold mine. The company mines more gold in value than copper, despite claiming the contrary according to some former employees of the company. The volatile security situation in the state has prompted the company to approach the military for protection. Ties with the military began with President Suharto who was goaded through use of bribe and kickbacks. After the president’s departure from power, the company finds itself in a symbiotic relationship with the military. However, the company is now paying money directly to the military officers in an absurd kind of protection scheme. The civil government cannot do much since the economy of the state leans on the company. In addition, the company’s officials have the military on their side. New York Times, an American newspaper, has endeavored to investigate the situation in Grasberg. The investigation has so far revealed a complex interdependence of the company and the state. The American company is in control of the states’ wealth while the military is in control of the security matters. Pressure on the company to clean up the industrial and mining waste at Grasberg is rising. The company has since resulted to channeling a considerable amount of money into the community with little planning.

Freeport is putting itself in a difficult situation by forming alliances with military officials. The military officials, who are already exhibit high levels of indiscipline by accepting money to allow illegal dumping of waste, cannot be trusted in any agreement. The American mining company has enjoyed a prosperous, but rather combative relationship with Indonesian authorities over the issue of dumping of waste and the exploitation of the mine. The company should take the opportunity of the new government in place to make good relations with the civil government. Although, the civil government has been fighting the company over the issue of the mine waste, it is ready to accept an amicable settlement over the issue of the effect of the mine on the environment of Grasberg. The company should use the money spent on bribing the military officials for protection to clean up the waste at the Grasberg mine. It is evident that the current lack of local support for the company will lead to the collapse of the operations in the Grasberg mine. Moreover, the company is in a position to clean up the mine waste and break ties with the military officials because they have the grip on the economy of Papua as the advantage. No government will risk an economic crisis and a possible instability for the sake of a few military officials. In the 21^st century, the company should have adopted methods of compensation to the poor that did not flood the community with excessive money. The company should have focused more on raising the level of economic activity in the region rather than offering excess money to the poorly educated community.