Slanted reporting about foreign companies in Indonesia

Chappy Hakim

IO – Negative impressions about foreign companies in Indonesia never waver – they even tend to worsen every day. One of the companies whose positive side is nearly never reported is Freeport Indonesia – whom certain biased media even call “Indonesia’s Number 1 Public Enemy”. It has gotten so extreme that some people even say Freeport is a “mafia company” controlling Indonesia’s mining.

This is really naïve reasoning, because if a real “mining mafia” manages to stay in Indonesia for 50 years, where is the Government in relation to this mafia? How can a country with a sovereign government suffer the presence of a mining mafia for decades without doing anything about it? These were questions posed by a santri (Islamic boarding school scholar) at a pesantren (Islamic boarding school) when the Minister of Finance, Sri Mulyani, went there to speak. The Minister responded in a very logical and sensible manner about the existence of Freeport in Indonesia. The following is an excerpt of her answer, as published at

“What matters is that right now the mines are being managed properly and the Company pays its dues to the State for the business it conducts”. She then said, “But I’d like to ask you something. If our company is being managed by a person who comes from a group from our own, does this mean it harms us? Is that su’udzon (ugly suspicion) or do you have any evidence?” Sri retorted to the santri.

The santri responded that Freeport being managed by foreign parties means that Indonesia will reap much smaller profit from it. Sri Mulyani confirms that, while explaining that PT Freeport has properly discharged of all of its obligations to the State in relation to its business. She further said that no matter what, the most important thing is that all businesses in Indonesia must be run according to proper business principles and pay out their obligation to the State – in other words, taxes and other fees. “If the Company is not being run properly, it sustains losses, it won’t be able to pay its employees’ wages, let alone taxes. The principle of business management is that whoever owns it, it’s useless if it isn’t properly managed,” she said.

This explanation contains simple facts about the presence of foreign companies. We all must learn to see things from an honest and objective perspective, and not allow ourselves to get carried away by widely circulated rumors and hearsay that are not always based on fact, and represent another agenda, such as the attempted shakedown of Freeport by convicted ex speaker of the House, Setya Novanto. It is also important to always look at who owns the newspaper or TV station carrying biased reportage on a Company, and what their own interest in the affair might be (such as damaging its reputation, driving down its share price, so they themselves can scoop up shares at a bargain price).

Let us also not forget the lesson of history. Indonesia was in a terrible economic condition after the near-coup d’état by the PKI in 1965 and the subsequent killings of 1966. No foreign bank, manufacturer or energy firm wanted to touch us – they were too afraid of being caught up in the violence or of being accused of collaborating with a cruel military dictatorship. Freeport McMoRan was the very first multinational firm to take a chance on a bankrupt and conflict-ridden Indonesia (study the last years of the Soekarno era, when even the people of Jakarta had to line up to buy rice, and the nation suffered acutely from hyperinflation).

Freeport was a multinational business, and came into our country to turn a profit, but it did so when no other big western firm wanted to take a chance on us. For that we eternally owe Freeport McMoRan a debt of gratitude, for its establishment and business success then paved the way for other major energy firms, multinational banks and manufacturers to invest in Indonesia and set up their businesses here. That has made a powerful contribution to the good standard of living most Indonesians enjoy today.