Spinning Gold

In Mexico, Hernán Cortés' lust for gold led to the destruction of the Aztec empire. In Peru, Francisco Pizarro ransomed the Incan ruler Atahualpa for a roomful of gold, then had him strangled anyway.

Four hundred years later, corporations have replaced the conquistadors. And the modern-day Pizarro is Jim Bob Moffett, CEO of Freeport-McMoRan Copper & Gold, a New Orleans-based mining company with 1995 revenues of $1.8 billion.

Since 1973, Freeport has operated the world's largest gold mine, located in Irian Jaya, Indonesia. But Freeport's treasure comes at the expense of the indigenous people whose homeland the mining company has invaded and polluted. In the past two years, at least one report has charged the mining operation with wholesale environmental destruction; two others investigated human rights abuses committed near the mine by the company's business partner, the corrupt regime of Indonesia's President Suharto; and a fourth report raised questions about Freeport's role in military abuses.

While reports of similar problems in Nigeria have put Royal Dutch/Shell in the international spotlight, Freeport has largely avoided scrutiny, in part because of its skillful manipulation of the media. Other than a smattering of U.S. coverage, accounts of Freeport's problems in Indonesia have been limited to local news stories in New Orleans and Austin, Texas, where the company is developing a 4,000-acre real estate project.

Because the mine -- which contains gold, silver, and copper valued at $50 billion -- is located in one of the most remote areas on the globe, Freeport has managed to restrict media access. When journalists air unflattering information about Freeport, the company threatens legal action, or, in some cases, hires them as company flacks. Freeport also spends millions to polish its public image by purchasing print and TV ads, and by making high-profile charitable donations. Behind the scenes, the company wields political muscle with heavyweights such as former Secretary of State Henry Kissinger.

In April 1995, the Australian Council for Overseas Aid, a nongovernmental consortium concerned with development and human rights issues, released a report on Freeport that suggests the company turned a blind eye while the Indonesian military killed and tortured dozens of native people in and around Freeport's 5.75-million-acre concession between June 1994 and February 1995.

After the ACFOA report, investigations by the Catholic Church of Jayapura and the National Human Rights Commission of Indonesia reported at least 16 cases of murder and other incidents of torture by the Indonesian military near the mine. "[Villagers] were beaten with rattan, sticks, and rifle butts, and kicked with boots," one tribal leader told Catholic Church officials. "[Some] were tortured till they died." Neither investigation addresses whether Freeport played a role in the killings, although the church report notes that one murder took place on a company bus and three villagers died under torture at a Freeport workshop. (Freeport denies the workshop exists.)

Freeport adamantly claims it was not responsible for the killings, and it has condemned the military's actions. The company also points out that ACFOA backtracked on its original claim that Freeport was involved in the killings. But critics note Freeport maintains close relations with Suharto's regime. Military troops guard the area around the mine, and Freeport provides them with food, shelter, and transportation. The Indonesian government, which has a 9 percent share in the mine, will receive $480 million this year in royalties, taxes, and benefits from the mine, according to the New Orleans Times-Picayune.