Just Kidding, Setya Says of His Request for 20% Stake in Freeport
By : Markus Junianto Sihaloho | on 3:22 PM November 19, 2015
Jakarta. House of Representatives speaker Setya Novanto finally conceded that he did ask for a 20 percent stake at miner Freeport Indonesia during a June meeting with the firm's executives, but claimed it had been a joke.
Speaking to reporters on Wednesday evening, Setya said it was the Freeport executives who initiated the June meeting.
The miner, he added, wanted a guarantee that its contract with the Indonesian government would be extended to 2041.
The government has said that renegotiations with Freeport will only start in 2019, two years before the company's contract is due to expire. But Freeport is looking to invest $17 billion in developing underground pits for its Grasberg mine in Papua through 2041 and is therefore seeking a guarantee its operations can legally continue.
The company's parent company, Arizona-based Freeport-McMoRan has offered to divest its current 90.64 percent stake in Freeport Indonesia to 70 percent, with the remainder to be controlled by the Indonesian government.
Setya was accused by Energy Minister Sudirman Said of attempting to shake down the miner for 20 percent of the divestment.
The House speaker on Tuesday admitted speaking with Freeport executives, but denied the allegations of extortion. He now claims businessman Muhammad Riza Chalid was with him at the meeting.
“My friend [Riza] jokingly wanted to know how much of Freeport's stake [Freeport-McMoran] is willing to divest,” he said.
Indonesia's contract with Freeport “has been ongoing for the last 40 years, yet the [Indonesian] government only owns 9 percent of the stake... Out of all the options available, why not take [the divestment plan]?”
Setya added that he had also lobbied the mining giant to build a smelter outside of Papua, where Freeport's mine is located, as the government requires all mining companies to process their mining output locally by 2017.
The government has insisted that the smelter be built in the underdeveloped province.
“I also brought up the idea of a power plant [for the smelter]. We could work together [to build] the power plant, because I know [Freeport] doesn't have one,” he continued.
“The conversation was casual. But [Freeport executives] must have been suspicious [of my jokes].”
Unbeknownst to Setya and Riza, the executives had recorded the conversation, a copy of which was given to Sudirman who in turn passed it on to the House of Representatives Ethics Council.
Sudirman accused Setya of trying to extort Freeport on the pretext of representing President Joko Widodo and Vice President Jusuf Kalla. Setya, Sudirman alleges, demanded that the Freeport Indonesia shares be divested through him.
When asked whether he had indeed told Freeport executives that 11 percent of the shares would be given to the president and the other 9 percent to the vice president as the minister accuses, Setya said he had merely repeated what Joko had told him, inadvertently negating his earlier claims that it had all been a joke.
“I remembered what the president had told me. I was merely passing on the message," the speaker said. “I did not ask for the shares of myself. There's no way I would do that for I respect the ethics code applied in Indonesia, in the United States and the world.
“Of course I would leave the public to judge this matter. I would never use the president and vice president's names [for my own gain]. I am the head of a government institution. Why would I do that?”
The company's parent company, Arizona-based Freeport-McMoRan has offered to divest its current 90.64 percent stake in Freeport Indonesia to 70 percent, with the remainder to be controlled by the Indonesian government.
Setya was accused by Energy Minister Sudirman Said of attempting to shake down the miner for 20 percent of the divestment.
The House speaker on Tuesday admitted speaking with Freeport executives, but denied the allegations of extortion. He now claims businessman Muhammad Riza Chalid was with him at the meeting.
“My friend [Riza] jokingly wanted to know how much of Freeport's stake [Freeport-McMoran] is willing to divest,” he said.
Indonesia's contract with Freeport “has been ongoing for the last 40 years, yet the [Indonesian] government only owns 9 percent of the stake... Out of all the options available, why not take [the divestment plan]?”
Setya added that he had also lobbied the mining giant to build a smelter outside of Papua, where Freeport's mine is located, as the government requires all mining companies to process their mining output locally by 2017.
The government has insisted that the smelter be built in the underdeveloped province.
“I also brought up the idea of a power plant [for the smelter]. We could work together [to build] the power plant, because I know [Freeport] doesn't have one,” he continued.
“The conversation was casual. But [Freeport executives] must have been suspicious [of my jokes].”
Unbeknownst to Setya and Riza, the executives had recorded the conversation, a copy of which was given to Sudirman who in turn passed it on to the House of Representatives Ethics Council.
Sudirman accused Setya of trying to extort Freeport on the pretext of representing President Joko Widodo and Vice President Jusuf Kalla. Setya, Sudirman alleges, demanded that the Freeport Indonesia shares be divested through him.
When asked whether he had indeed told Freeport executives that 11 percent of the shares would be given to the president and the other 9 percent to the vice president as the minister accuses, Setya said he had merely repeated what Joko had told him, inadvertently negating his earlier claims that it had all been a joke.
“I remembered what the president had told me. I was merely passing on the message," the speaker said. “I did not ask for the shares of myself. There's no way I would do that for I respect the ethics code applied in Indonesia, in the United States and the world.
“Of course I would leave the public to judge this matter. I would never use the president and vice president's names [for my own gain]. I am the head of a government institution. Why would I do that?”
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