When it was announced on Oct. 8 that Indonesian authorities had assured US mining giant Freeport McMoRan that its Grasberg copper and gold mine contract would be extended, President Joko Widodo appeared to have gained the upper hand, thwarting forces using economic nationalism as an avenue to eventually put the mine in domestic hands.
But nearly two months on, talks between the government and Freeport have turned into a national soap opera, with damning evidence of a shakedown attempt on Freeport by a leading politician airing on national TV this week. Freeport officials rebuffed the attempt, partly because it would open the US-based enterprise to prosecution under the Foreign Corrupt Practices Act, which forbids suborning bribery.
At stake is not just the multi-billion dollar future of one of the world’s biggest copper and gold-mining assets but possibly the future of President Joko Widodo’s government and his credentials as a supposed reformer. The affair, with billions at stake, is being called Indonesia’s biggest political scandal ever, likely to be an exaggeration given the theft of billions during the Suharto era.
“Freeport is a thorn in many sides because it was a Suharto thing,” a western political analyst said in an interview, a hugely profitable development agreed by the late strongman, who ruled for 32 years before giving up power in 1998. “It seems to be up for grabs and is enormously valuable. Interests under the cover of so-called economic nationalism want to divide up the spoils, or at least grab the 20 percent that will be divested as part of a contract renewal.”
All Wait for Jokowi to Speak
With his own cabinet divided over the sensational Nov. 17 release of the shakedown tape by energy minister Sudirman Said, and a public hearing being held into House Speaker Setya Novanto’s apparent attempt to secure shares in the Indonesian unit of the company by invoking the president’s name and that of Vice President Jusuf Kalla, insiders and now the public alike are waiting for the president to say something.
The president’s silence has caused the rumor mills to churn, with one interpretation that Jokowi is on top of the mess and will sort it out. Others believe he won’t sort it out and that he is somehow in it himself. A third is that his Javanese heritage means he will simply let the matter fester without a decision.
Although Jokowi is said to have bypassed regular channels to negotiate the extension of the Freeport contract himself, with only Sudirman in the room with him and Freeport officials, pushing aside the economic nationalists, so far he has stayed out of the purported bribery matter publicly. He has neither openly backed his reformist energy minister nor sided with his coordinating security minister Luhut Panjaitan, a close aide who has been at odds with Sudirman for months. Although Luhut’s name is mentioned on the tape several times, there is no evidence of wrongdoing on his part.