Mining operations inevitably create economic, social and environmental impacts on local communities. Some of these impacts may include changes to land use and population influx, while others include economic opportunities and development in the areas of infrastructure, health and education. We engage with local stakeholders throughout project lifecycles to build the relationships and trust needed to operate and grow our business. Our Community Policy requires collaboration with communities to minimize and mitigate unavoidable adverse impacts and to maximize opportunities to deliver value from our operations.

Transparent and consistent engagement ensures communities have input into our development projects and ongoing operations, promotes understanding of our business, and ultimately reduces risk to our plans. Communication with local stakeholders takes place via a number of channels, such as formally through open houses linked to regulatory processes, informally through interactions with our community development representatives in the field, or through community partnership panels and community investment funds or foundations.

PHOTO DESCRIPTION: We continue to deploy DreamBuilder: The Women’s Business Creator; a free, online entrepreneurial training program designed to assist women of all education levels. Graduate Patricia Quezada participates in an enterprise fair organized by the municipality of Calama, Chile.

Assessing and Managing Impacts Grievance Management Systems

PTFI recognizes the land rights of the indigenous peoples living within its project area in the form of community development programs. In the lowlands, the Kamoro Village Recognition Program initially focused on the provision of physical infrastructure but now target ongoing needs such as economic development, income generation, and providing access to markets and health care facilities by way of bus and light vehicle transportation (above).We implement Environmental and Social Impact Assessments before greenfield or brownfield expansion projects. These assessments identify potential impacts from the outset and provide a framework for developing mitigation plans. Many of our operations use baseline assessment tools to help identify community needs and provide a baseline against which we can measure our performance over time. Our active mining sites have mine closure plans that specify measures for managing environmental impacts at closure while our ongoing community investment programs aim to build community capacity for sustainability post-closure.

At our operations, our Community Liaison Officers facilitate communications between the company and the community regularly. They are the primary channel to circulate information that may interest or affect communities. They also report back to the company regarding community questions, concerns and grievances. This engagement process enables management to monitor and assess potential risks, and consider necessary mitigation. These communications are ongoing and are supplemented with stakeholder meetings, workshops and socialization programs.

Indonesia
In 1997, PTFI completed an Environmental Impact Assessment (AMDAL) in compliance with Indonesian regulations and the company’s policies and practices on impact management. This AMDAL, which describes PTFI’s management plans for environmental and social impacts of its operations, was approved by the Government of Indonesia in 1997. The PTFI Environmental and Community Affairs departments compile data and program results for related quarterly Environmental Planning and Monitoring Reports submitted to the Government of Indonesia.

Acceleration of sedimentation in the Ajkwa River estuary due to an increase in PTFI production was identified in the 1997 AMDAL. The sedimentation was predicted to potentially impact community access through estuary waterways. Since 2010, residents of villages in this area have filed grievances regarding increased sedimentation impacting local transportation routes and certain economic activities. In 2011, PTFI partnered with Institut Teknologi Sepuluh Nopember (ITS) to develop sustainable transportation systems for the villages impacted by the sedimentation, which led to the launching of a boat transport service program in 2014.

In 2016, PTFI also continued to work with communities to mitigate the impacts of the West Levee Extension project via the water transportation program. The purpose of the West Levee Extension project is to contain the projected increase in tailings as PTFI transitions from an open pit to a fully underground operation. The extension project, which was approved through the AMDAL, temporarily closed the Yamaima channel, which local communities have historically accessed. Several years ago, PTFI conducted a study on an alternative community transportation access and alternative economic activities for the impacted communities in Ayuka and Tipuka. As a result of the study and engagement with the impacted communities, PTFI excavated an alternative channel for the community’s use in 2016 to mitigate the impact of the closure of the Yamaima channel. In addition, the boat service that PTFI had launched in 2014 was not optimally used by the community. PTFI consulted with the village members and identified an option to use smaller-sized fiberglass boats, re-route the service, and revise the schedule of boat service. As a result of this community feedback, PTFI is now operating passenger boats to provide regular water transportation services between coastal villages to the east of the tailings deposition area and the healthcare, education and economic trade facilities available in the Timika region to the west. In addition, new boat docks, jetties, and bus service to supplement the water transportation services were constructed and made available in 2016.

Democratic Republic of Congo
One of the key tools our former TFM operation used to identify, assess and mitigate impacts on concession communities was Environmental and Social Impact Assessments (ESIAs). They reflected TFM’s commitment to international standards for environmental and social performance as well as company policies for sustainability and corporate responsibility, and were aligned with applicable DRC law. On the basis of the ESIA results, TFM developed a variety of impact mitigation programs including a resettlement policy framework and multiple resettlement programs, a national hiring policy, a multi-year community development program, and many environmental and safety policies and programs.  The Community Development Program was also informed by ongoing stakeholder engagement and the TFM Sustainable Development Risk Register, and organized around three main pillars - economic development, education and health. Program strategies were revised annually against a continuously evolving five-year planning horizon.  Another tool that TFM used to assess and manage the impacts of operations on communities was Community Liaison Officers (CLOs). CLOs maintained open, constructive dialogue with community groups and individual stakeholders to ensure that social issues and community priorities informed community interventions.

TFM maintained an extensive program of stakeholder engagement that included regular meetings with government authorities at all levels. Broad based local community consultation committees and processes included quarterly meetings with civil society organizations and individuals in Tenke and Fungurume. These meetings were held in public locations and were open to the public. Community stakeholders were invited to raise questions and express concerns, and if the TFM representatives cannot address an issue on the spot, it was tabled for response at the next meeting. A similar quarterly meeting was held with traditional authorities, in which the chiefs raised issues and concerns related to land distribution, security issues, community benefits and other administrative matters. In addition, TFM continuously maintained engagement and informed external and internal stakeholders of new developments through a variety of communications channels including television and radio broadcasts, print media including quarterly newsletters, and direct participation in a wide variety of associations and forums such as the Chamber of Mines, multi-stakeholder committees such as IDAK (Sustainable Development for Katanga) and NGO platforms.

The Stakeholder Forum was established as a platform for consultation between the TFM Social Community Fund and the community in order to align the Fund’s investments with the community’s needs and priorities. The Fund sought community input via regular Forum meetings to raise issues, concerns, priorities and suggestions regarding local development needs in their communities. The 40-member Forum was also divided into four working groups that advised the Secretariat on programming in education, agriculture, health and infrastructure.

PHOTO DESCRIPTION: PTFI recognizes the land rights of the indigenous peoples living within its project area in the form of community development programs. In the lowlands, the Kamoro Village Recognition Program initially focused on the provision of physical infrastructure but now target ongoing needs such as economic development, income generation, and providing access to markets and health care facilities by way of bus and light vehicle transportation (above).

Indigenous Peoples

Our community engagement and local investment objectives are significantly focused on indigenous peoples in Papua, Indonesia; Native Americans in the United States; and the communities of Alto Loa in Chile (Chile’s First People). Through community engagement, cultural promotion and preservation projects, as well as training and development programs, we seek to address the needs, cultures and customs of indigenous peoples near our operations. Engaging with groups focused on indigenous peoples’ rights at the local, national and international levels also is important for sharing of information about approaches to indigenous peoples’ topics in varying geographies.

In 2013, the ICMM updated its 2008 Position Statement on Indigenous Peoples and Mining, to which we adhere. The statement sets forth an obligation to work to obtain the consent of indigenous peoples for new projects that are located on lands traditionally owned by or under customary use of indigenous peoples. Additional commitments address engaging indigenous peoples, understanding their rights and interests, building cross-cultural understanding, agreeing to appropriate process for consultation and engagement, and participating in decision making.

PTFI has engaged with indigenous Papuan tribes for decades, including through multiple formal agreements to promote workforce skills training, health, education and basic infrastructure development. The desire of indigenous Papuans to preserve cultural heritage is shared by PTFI and continuously demonstrated through support for cultural festivals and books documenting the social uniqueness of the Amungme and Kamoro tribes.

El Abra and the indigenous community of Ollagüe signed a collaborative environmental protection agreement to jointly monitor the Salar de Ascotán watershed.

PTFI's "January Agreement" of 1974 with the Amungme was the first recognition in Indonesia of hak ulayat, or the right of traditional people to land used for hunting and gathering. Subsequent to that agreement, the Government of Indonesia formally recognized the right to compensation for hak ulayat (land rights).

Compensation in the form of recognition (rekognisi) is paid to communities for a release of hak ulayat, as hak ulayat is a communal property right. Such payments are made in the form of mutually agreed projects or programs benefiting the community. PTFI has paid recognition over the years through programs mutually agreed by consultation and guided by the laws of the Government of Indonesia.

In the highlands, the Amungme people’s hak ulayat is recognized by PTFI through a memorandum of understanding (MoU) signed in 2000 for the implementation of the Tiga Desa (Three Villages) Program in the villages of Waa Banti, Aroanop, and Tsinga. Under the MoU, PTFI has committed to constructing housing and public facilities such as bridges, airstrips, roads, churches, sewage systems, and markets over a period of ten years. In 2016, PTFI spent over $8 million on the construction of an airstrip in Aroanop, cable bridges, micro-hydropower generation, clean water installation, renovation of a school and teacher housing in Banti, and natural disaster remediation in Tsinga. Certain infrastructure development commitments under the MoU remain in progress.

In 1997, PTFI signed a MoU for the implementation of the Kamoro Village Recognition Program in Nayaro, Koperapoka, Nawaripi Baru, Ayuka, and Tipuka to recognize the Kamoro’s hak ulayat in the lowlands area and coastal zone where PTFI has developed the tailings deposition area, cargo dock facilities, port, and electrical transmission line corridor. Under the program, PTFI constructed over 400 houses as well as roads, bridges, churches, schools, clinics, government buildings, clean water facilities, power installations, and drainage systems. PTFI fulfilled its commitments under the MoU in 2009 and the infrastructure has been handed over to the government, local churches and the community. Nevertheless, the company continues to support these five villages through its "post-recognition" program. To encourage economic activities in these villages, PTFI supports a fisheries program in partnership with the Catholic Church and has introduced cocoa as a cash crop to the area.

Miami Operations hosts approximately 30 members of the National Tribal Mining Workgroup.In 2016, PTFI continued to work with Kamoro community members to review and mitigate the impacts of the West Levee Extension project via the water transportation program. The purpose of the West Levee Extension project is to contain the projected increase in tailings as PTFI transitions from an open pit to a fully underground operation. The extension project temporarily closed the Yamaima channel, which local communities have historically accessed. Several years ago, PTFI conducted a study on an alternative community transportation access and alternative economic activities for the impacted communities in Ayuka and Tipuka. As a result of the study and conversations with the impacted communities, PTFI excavated an alternative channel to mitigate the impact of the closure of the Yamaima channel. In addition, the boat service that PTFI had launched in 2014 was not optimally used by the community. PTFI consulted with the village members and identified an option to use smaller-sized fiberglass boats, re-route the service, and revise the schedule of boat service. As a result of this community feedback, PTFI is now operating passenger boats to provide regular water transportation services between coastal villages to the east of the tailings deposition area and the healthcare, education and economic trade facilities available in the Timika region to the west. In addition, new boat docks, jetties, and bus services to supplement the water transportation services were constructed and launched in 2016.

In addition, land rights trust funds for the Amungme and Kamoro tribes were created in 2001 to provide voluntary special recognition for the holders of the hak ulayat. The company has contributed nearly $55 million to these funds through 2016. These agreements also were formalized via a MoU, and stemmed from the creation of the Forum MoU 2000, which is a stakeholder body focusing on socio-economic resources, human rights, land rights and environmental issues. The forum consists of representatives of the Amungme and Kamoro tribal councils and PTFI.

PTFI has sponsored research and the publication of a series of books on Papuan indigenous cultures including books titled “Introducing Papua,” “Highlands of Papua,” and “South Coast of Papua.” The Amungme and Kamoro Community Development Organization (LPMAK), which manages the Partnership Fund, has also published two books – one on the Amungme and Kamoro folklore, and another on traditional music.

 El Abra operations received the 2016 National Environmental Award from the Recyclápolis Foundation for building Chile’s first community hybrid power plant for the indigenous community of Ollagüe.In the U.S., we continued our partnerships with Native American Tribes including the Hualapai Tribe, the San Carlos Apache Tribe, the Tohono O’odham Nation, and the White Mountain Apache Tribe. These partnership Tribes have maintained their focus on education as a top priority for their community members; the company continued its Native American Scholarship program, awarding 39 college scholarships in 2016 to Tribal Members who are enrolled Members of our partnership Tribes. In addition, support to Arizona State University helped address Native American student retention rates and related higher education efforts. The development of future youth leaders was the focus of an ongoing partnership with the United National Indian Tribal Youth (UNITY) organization.

We continue to provide grants to our Tribal partners and non-profit organizations that seek to service our partnership Tribes through our Native American Partnership Fund and the Native American Contributions Activities Fund. Nine programs were awarded funding through our Native American Partnership Fund including the GuVo Youth summer enrichment program, the Himdag Ki: Exhibition Space Renovation project and an Elder Empowerment program. Our support for these Native American initiatives exceeded $2.7 million in 2016.

In November 2016, we experienced breakage of a water pipeline for our El Abra mining operation that passes through the Indigenous community of Taira. Water from the pipeline entered the Loa River on which the community of Taira depends for livelihoods. The community complained that resulting turbidity in the river created sedimentation and clogged its irrigation pipelines, and the salinity of water potentially impacted pastureland. Environmental analysis conducted by the company revealed no significant changes in salinity within the Loa River after the pipeline breakage. El Abra staff conducted two field visits with the community after the incident to further analyze the circumstances. The company provided 1,000 bundles of grass to the community for animal feed to mitigate any potential damage to pastureland. El Abra has begun a process to analyze the feasibility of sedimentation impacting irrigation pipes and the implementation of further preventive measures.

El Abra continued robust engagement with 10 indigenous communities and worked cooperatively to establish Community Development Agreements, including funding for projects made available through the Freeport-McMoRan Chile Foundation, that meet local needs. One of the most significant investments was in the Don Bosco Technical School, which opened to 600 students in 2016, allowing them to receive quality training needed to facilitate future employability. We further implemented or continued formalized engagement, assessment and management systems to address potential social impacts and community development topics within the corridor surrounding the operation where we have a potential expansion opportunity.

For more information, please see  Land Use and Customary Rights.

PHOTO DESCRIPTIONS: (top) El Abra and the indigenous community of Ollagüe signed a collaborative environmental protection agreement to jointly monitor the Salar de Ascotán watershed. (middle) Miami Operations hosts approximately 30 members of the National Tribal Mining Workgroup. (bottom) El Abra operations received the 2016 National Environmental Award from the Recyclápolis Foundation for building Chile’s first community hybrid power plant for the indigenous community of Ollagüe.

Land Use and Customary Rights Resettlement

New boat docks supplement the water transportation services provided to Kamoro community members whose estuary transport routes are impacted by sedimentation associated with PTFI’s controlled riverine tailings management system.

It is our policy to comply with host country laws regarding land and customary rights, from exploration to closure. We maintain formal grievance systems at all major operations to ensure we document and respond appropriately to issues raised by community members. In situations where community members report a claim or grievance regarding land or customary rights, we work with local authorities to investigate the claim and reach an agreement within the existing legal framework of the host government.

Community grievances are normally received first by Community Liaison Officers (CLOs). CLOs report the grievance to the site Community Grievance Officer, who will relay the grievance to the relevant departments. The CLOs often help to investigate grievances and meet with the community regarding resolutions. For grievances with potential high community impacts, company management is involved and the appropriate government authorities are informed as needed.

Indonesia
The PTFI project area is located where the indigenous peoples of Papua hold customary land rights. Specifically, the Amungme in the highlands and the Kamoro in the coastal lowlands are considered traditional landowners of the area, along with the Dani, Damal, Moni, Mee, and Nduga. All of the land being used by PTFI has been legally and formally released for use by the company through a Contract of Work with the Government of Indonesia.

PTFI's "January Agreement" of 1974 with the Amungme was the first recognition in Indonesia of hak ulayat, or the right of traditional people to land used for hunting and gathering. Subsequent to that agreement, the Government of Indonesia formally recognized the right to compensation for hak ulayat (land rights). Compensation in the form of recognition (rekognisi) is paid to communities for a release of hak ulayat, as hak ulayat is a communal property right. Such payments are made in the form of mutually agreed projects or programs benefiting the community. PTFI has paid recognition over the years through programs mutually agreed by consultation and guided by the laws of the Government of Indonesia.

In the highlands, the Amungme people’s hak ulayat is recognized by PTFI through a memorandum of understanding (MoU) signed in 2000 for the implementation of the Tiga Desa (Three Villages) Program in the villages of Waa Banti, Aroanop, and Tsinga. Under the MoU, PTFI has committed to constructing housing and public facilities such as bridges, airstrips, roads, churches, sewage systems, and markets over a period of ten years. In 2016, PTFI spent over $8 million on the construction of an airstrip in Aroanop, cable bridges, micro-hydropower generation, clean water installation, renovation of a school and teacher housing in Banti, and natural disaster remediation in Tsinga. Certain infrastructure development commitments under the MoU remain in progress.

In 1997, PTFI signed a MoU for the implementation of the Kamoro Village Recognition Program in Nayaro, Koperapoka, Nawaripi Baru, Ayuka, and Tipuka to recognize the Kamoro’s hak ulayat in the lowlands area and coastal zone where PTFI has developed the tailings deposition area, cargo dock facilities, port, and electrical transmission line corridor. Under the program, PTFI constructed over 400 houses as well as roads, bridges, churches, schools, clinics, government buildings, clean water facilities, power installations, and drainage systems. PTFI fulfilled its commitments under the MoU in 2009 and the infrastructure has been handed over to the government, local churches and the community. Nevertheless, the company continues to support these five villages through its "post-recognition" program. To encourage economic activities in these villages, PTFI supports a fisheries program in partnership with the Catholic Church and has introduced cocoa as a cash crop to the area.

In addition, land rights trust funds for the Amungme and Kamoro tribes were created in 2001 to provide voluntary special recognition for the holders of the hak ulayat. The company has contributed nearly $55 million to these funds through 2016. These agreements also were formalized via a MoU, and stemmed from the creation of the Forum MoU 2000, which is a stakeholder body focusing on socio-economic resources, human rights, land rights and environmental issues. The forum consists of representatives of the Amungme and Kamoro tribal councils and PTFI

In 2016, PTFI recorded 17 formal land rights grievances from members of the indigenous Papuan community, including claims over land use and compensation requested for past land use agreements. PTFI receives and processes community grievances through its Community Grievance Management System. In response to land rights grievances, PTFI coordinates with local authorities to investigate the claim and works to reach an agreement within the existing legal framework. The 2014 land rights mapping study conducted by Cendrawasih University continues to assist the Amungme traditional council and PTFI in mediating conflicts over land right claims in the highland area.

PTFI also received a grievance from Kamoro community members regarding mass fish deaths in the lower part of the project area. Analysis by PTFI’s environmental department determined it to be a seasonal event caused by natural phenomenon related to low dissolved oxygen, exhibited in other locations such as the United States in 2011 and Japan in 2012, and unrelated to PTFI operations. PTFI socialized this with the Kamoro community and worked with them to establish a circulation channel. 

Democratic Republic of Congo
Our former TFM operation addressed two grievances regarding land use and customary rights, one of which was resolved. The grievance in process as of November 2016 was transferred for follow up by TFM. Similar to all community grievances, these two grievances were processed through the site community grievance management system.

In one case, a grievant requested recognition as a traditional land chief by TFM to be eligible for compensation for land use. TFM verified his location within the concession and worked with the relevant customary authorities to verify his status. The other grievance was received from a local socio-cultural organization regarding the termination of employment of members of their tribal group. TFM responded by organizing a meeting with representatives of the organization to explain TFM’s hiring and termination policies.

PHOTO DESCRIPTION: New boat docks supplement the water transportation services provided to Kamoro community members whose estuary transport routes are impacted by sedimentation associated with PTFI’s controlled riverine tailings management system.

Community Investment Indonesia  |  Democratic Republic of Congo  |  South America  |  North America

Local women celebrate graduation from a literacy program supported by the TFM Social Community Fund and a local NGO partner. Initially planned for 300 participants, the program that teaches reading, writing, basic math and financial savings now reaches over 700 women and girls.

Freeport-McMoRan’s community investment strategy addresses high-priority needs and facilitates local capacity building with the aim of sustaining communities post-closure. Our social investment criteria are a set of guidelines designed to ensure that resources are used to decrease community dependencies on our operations and promote sustainable futures. Many of our community investment programs align with SDG objectives or help mitigate impediments to their realization.

community%20investment_pie.svgcommunity_invest_sdg_chart.svgcommunity invest_bar.svg

In addition to direct community investment from operations and the corporate Freeport-McMoRan Foundation, we have established community trust funds or social funds in Chile, Indonesia, Peru and the U.S. These funds are managed by community members who determine the allocation of resources to programs that focus on education, health, economic development and the environment.

In both North America and South America, we increased our efforts and investments in local capacity-building through activities including specific training for current and upcoming local leaders. In each of our operating communities in the U.S., we implemented another phase of our overall capacity development work with an initiative called “Leadership for Sustainable Communities,” which aims to guide local civic leaders through a process designed to develop each community’s ability to affect action that creates a sustainable future, especially post mining. The first phase of the program, which will conclude in 2017, has provided training for more than 120 current and future leaders.

While we have increased work with communities to decrease dependence on our operations, we realize this remains one of the single biggest risks to our business and communities. In 2016, our Henderson Mine, located in Grand and Clear Creek Counties in Colorado, reduced its production and workforce due to falling demand for molybdenum and determined that mine life could be as short as five years. This resulted in a situation in which not only the annual local tax revenue would decrease, but the averaging method used for county taxes would result in a drastic decrease in the next 5 years. Clear Creek County is particularly reliant on these taxes and therefore more vulnerable to the financial shift that will occur in the near future, notwithstanding a decade of effort to support planning, development and implementation of assets through engagement and investment. We will continue to explore opportunities to better enable capacity building in communities to use both tax revenue and our voluntary investment to increase resiliency in the face of commodity market downturns, curtailments and eventual closures.

During 2016, we continued to support improvement in science, technology, engineering and mathematics (STEM) education through teacher development and retention initiatives. Through our STEM Innovation Grant Program, we awarded funds to 18 innovative projects submitted by teachers across 17 schools near our operations. These grants provide resources not otherwise available for enhanced STEM learning. We also completed year two of a three-year professional development initiative for elementary and middle school math teachers in rural school districts. The initiative aims to increase their content knowledge and confidence in teaching math in order to improve students’ ability to master core mathematical concepts by the eighth grade. Early results indicate better student math performance and preparedness. Our focus on STEM is aligned with the long-term technical requirements of our business. We continued our investment in the workforce pipeline supporting higher education programs that trained students in the trades, as well as four-year degree programs related to our business needs.

We also have advanced our investments in women’s economic empowerment programs, including “DreamBuilder: The Women’s Business Creator,” an online entrepreneurship skills training program that has now reached just over 17,000 women in Chile, Peru and the U.S. In 2016, via our partnership with Thunderbird School of Global Management and a network of 82 dedicated partners, we were able to increase the graduation rate to 11 percent, outpacing the (online learning) industry average of 4 percent for open enrollment courses. Evaluation of graduates a year or more after graduation indicated that 93 percent increased business sales, 46 percent hired additional employees and 76 percent paid themselves a salary versus only 22 percent who did so before participating in the program. As we work to increase the number of graduates, we are considering using a third party impact assessment to determine the program’s impact on women, their families and the revenue generated for community-level development. This program is another example of how we are collaborating to advance the SDGs, particularly SDGs 4, 5 and 8.

We have committed to invest $5 million to promote women’s economic empowerment and address violence against women in Chile, Peru and Indonesia by 2021 as part of a “Girls, Women & the Global Goals” coalition of multi-sectoral partners convened by No Ceilings, Vital Voices, and WEConnect International. The coalition is working collectively to advance the fifth SDG goal of gender equality, particularly focused on promoting women’s economic participation, addressing violence against girls and women, and advancing women’s leadership in the private and public sectors.

In the DRC, the TFM Social Community Fund continued to support the literacy and life skills program for women and girls launched in 2015, which provided training on reading, writing, basic math, household savings, and other topics related to human rights, health and hygiene to more than 700 women and girls in 12 villages.

community_trust_fund_table.svg

PHOTO DESCRIPTION: Local women celebrate graduation from a literacy program supported by the TFM Social Community Fund and a local NGO partner. Initially planned for 300 participants, the program that teaches reading, writing, basic math and financial savings now reaches over 700 women and girls.

Economic Impacts Indonesia  |  Democratic Republic of Congo  |  South America  |  North America

Morenci

summary_economic_impacts_table.svg

2016 procurement spend distributionLocal Suppliers Our operations provide significant direct and indirect economic impacts when we purchase supplies and services in local economies. When we purchase locally, we facilitate community development and capacity building in line with our Community Policy and programs. Our Global Supply Chain Policy encourages consideration of local suppliers.

 
PHOTO DESCRIPTION: Morenci

Public Health

Malaria, HIV/AIDS and tuberculosis (TB) are serious infectious diseases impacting communities near our operations in Indonesia including members of our workforce. In coordination with local governments and NGOs, we dedicate significant resources to helping communities and governments reduce public health risks.

The Mimika District Health Office, LPMAK, and Community Health Development (CHD) work together to eradicate malaria in the Mimika Regency of Papua Province. Drainage is monitored and standing water is  sprayed to reduce development of mosquito larvae.Indonesia
The most common diseases affecting PTFI employees, their dependents, as well as the local community around PTFI’s Contract of Work (COW) area are malaria, HIV/AIDS, and tuberculosis (TB). In recent years, non-communicable diseases (NCD), principally cardiovascular diseases, diabetes, obesity, cancers, and chronic respiratory diseases, have also become an emerging threat to the local community.

The PTFI Community Health Development (CHD) department, assisted by the company’s medical services provider, International SOS, implements programs for education, prevention, counseling, diagnosis and treatment of diseases within and around the project area. This includes a comprehensive public health program addressing HIV/AIDS, TB, malaria, mother and child health, and clean water.

In addition to the approximate $10 million invested in community public health programs by PTFI in 2016, the Amungme and Kamoro Community Development Organization (LPMAK), funded by PTFI, directly contributed approximately $11 million to community health care programs, both within the PTFI project area and areas outside. This included the operation of community hospitals in Timika, in the lowlands, and Banti-Waa villages, in the highlands.

Papua Province, including Mimika Regency where PTFI operates, has the highest malaria prevalence rates in Indonesia. In virtually all of the local communities near our operations, malaria infection is the single greatest cause of morbidity and hospitalization. Coping with continuing rapid population and development growth is one of the biggest challenges affecting malaria reduction in Papua. Given the significant health risk to both PTFI employees and surrounding local communities, PTFI implements an integrated malaria control program.

An integrated approach on control of malaria transmission focused specifically in urbanized areas of Timika is critical to the success of malaria reduction. In 2013, in collaboration with LPMAK and the local government, PTFI established the Mimika Malaria Center under which the Timika Malaria Control Program (TMCP) operates. The TMCP coordinates all malaria prevention activities such as indoor residual spraying of insecticides in homes and bed net distribution among PTFI employees, families and local communities under coverage. The TMCP has resulted in significant improvements in terms of coverage, coordination, as well as surveillance and reporting of malaria data. The coverage of the residential spraying program has increased as a result of the TMCP expanding beyond the original coverage area. In 2016, approximately 30,000 houses were sprayed.

In 2016, approximately 9,000 community malaria cases were detected and treated at the three PTFI-supported community primary health clinics, the first increase since the launch of the TCMP. A number of factors may contribute, such as large-scale construction works in Timika and high rainfall resulting in increased standing water. In response, malaria health promotion events were organized to raise awareness on transmission, prevention and treatment measures, reaching over 100,000 people. As multi-drug resistance in malaria parasites is a significant problem in Papua, all malaria cases detected are treated with effective artemisinin combination drugs.

The HIV/AIDS epidemic in Papua is predominately characterized by heterosexual transmission, especially impacting the indigenous Papuan population. PTFI implements a number of HIV/AIDS prevention, outreach, and treatment programs for employees and community members in collaboration with the local government health services. In 2016, PTFI conducted HIV/AIDS education and outreach activities reaching over 11,250 community members and 10,300 PTFI employees, distributed condoms and conducted over 3,470 one-on-one counseling sessions with commercial sex workers.

PTFI has also increased HIV/AIDS Voluntary Counseling and Testing (VCT) services for the workforce by offering VCT for anyone receiving a checkup unless they opt-out. In 2016, over 25,000 workforce members participated in VCT, an increase from 3,400 employees in 2011, from which 43 new cases of HIV infection were detected. Due to PTFI’s efforts to increase VCT uptake, PTFI is diagnosing HIV cases at an early stage and before AIDS-related complications arise. Antiretroviral therapy is provided free-of-charge by the Indonesian government to HIV positive cases among PTFI’s workforce and for community members. This early diagnosis not only provides individuals with HIV an opportunity to receive proper treatment that leads a healthy life, but also helps to prevent transmission of HIV to others.

PTFI also provides confidential HIV/AIDS VCT services for community members at all three PTFI-supported community clinics, and the Sexual Health and HIV Clinic in Timika, operated by PTFI in partnership with the local government and LPMAK. In 2016, PTFI provided VCT to over 2,160 individuals from the community, a 10 percent increase from 2015.

According to the World Health Organization (WHO), Indonesia has the second largest number of TB cases in the world. PTFI implements a comprehensive TB program for both its employees and surrounding communities. In 2016, PTFI continued its intensified TB outreach efforts as a response to the high prevalence rates in the Mimika region. The company organized one-on-one and group sessions with approximately 3400 community members, a 66 percent increase in contacts from 2015.  Through active case detection, PTFI staff also reached out to over 550 individuals who were in close contact with TB patients in the community and provided them with testing and TB education information. TB outreach events, such as World TB Day, reached nearly 1900 community members and 11,000 PTFI employees.

The PTFI TB Clinic located in Timika, operated in collaboration with the local government and LPMAK, follows the WHO recommended Directly Observed Treatment Short-course (DOTs) approach for active case detection and treatment of new TB cases. Among 1508 people tested for TB in 2016, 141 new TB cases were detected in the community, and 79 new TB cases were detected in the PTFI workforce.

To increase the availability and quality of health services for coastal communities, LPMAK finances a floating medical clinic. The remote villages it served by the Floating Clinic are located east of the project area and only accessible by river. Run by a third party, the Floating Clinic program enhances the level of care provided by the local government funded Primary Health Care centers (puskesmas) by providing more complete diagnostic equipment and drug/non-drug services to assess and treat patients. The Clinic collaborates with the puskesmas and other locally-based health organizations.  In 2016, it served nearly 6,200 people in four districts.

Democratic Republic of Congo
Before our former TFM operation began development and operations, malaria was by far the largest cause of morbidity and mortality in the concession area and placed a significant social and economic burden on the local population. As a result, TFM implemented an integrated malaria control program to protect employees and the local community in its project area – the first of its kind in the DRC. The program included five primary pillars:  (1) an indoor residual spraying program, (2) diagnosis and treatment, (3) environmental management and larval control, (4) awareness, health promotion and personal protection, and (5) monitoring and evaluation. The indoor residual spraying program targeted households in the concession and more than 88,500 residential structures were sprayed from the start of the 2016 campaign in September through November. Through November 2016, a total of 722 malaria cases were diagnosed and treated in the workforce, representing an overall reduction in total annual workforce malaria incidence of 90 percent since the start of the program in 2008. From October 2015 to November 2016, a pilot study was conducted in the remote village of Kasanga to assess community acceptance and effectiveness of durable wall lining, a new malaria control method being considered to replace indoor residual spraying. Post-installation surveys indicated community acceptance, however the program was discontinued due to minimal impact on disease transmission and vector density six months post-installation. 

The road connecting Southern Africa to the Lualaba Province and the rest of DRC runs through the TFM concession, which created a heightened risk for HIV infection locally. Truck drivers from central and southern Africa, commercial sex workers, and workforce members living far away from their families were all potentially at risk for HIV infection. Since 2008, TFM implemented a comprehensive program for the workforce and their dependents. The program included prevention, case management with antiretroviral treatment, and support for HIV infected and affected people. As part of the TFM workplace HIV/AIDS awareness program, approximately 3,189 employees and contractors received education and information on transmission, prevention and treatment measures for HIV and other sexually-transmitted infections through November 2016.

Through November 2016, nearly 4,770 community members were sensitized on the risks of becoming infected with HIV/AIDS by local NGO LAMUKA along with TFM’s support. Sensitization targeted 618 commercial sex workers and other most-at-risk population groups (truck drivers and public security). In the community surrounding the mine, 2,402 people received voluntary counseling and testing through the Fungurume Health Zone with 14 percent testing positive for HIV.

TFM continued to participate in the Katanga Business Coalition to Fight HIV (CIELS), where information on TFM’s HIV/AIDs program activities was shared with other companies and government agencies. Based on its experience, TFM was selected by the CIELS to become their representative as a voting member of the Global Fund’s DRC Coordinating Mechanism in July 2016. The mechanism includes 28 representatives from both the public and private sectors, including governments, multilateral or bilateral agencies, non-governmental organizations, academic institutions, private businesses and people living with the diseases.  It is responsible for (1) coordinating the development and submission of grant proposals to the Global Fund based on national level priority needs, (2) nominating one or more public or private organizations to serve as Principal Recipients for each grant, (3) overseeing implementation of approved grants, and (4) ensuring linkages and consistency between Global Fund grants and other national health and development programs.

Water born disease is another significant health threat for concession residents, and TFM continued to invest in projects to improve health and living standards through improved access to clean water, sanitation and hygiene. Through November 2016, TFM drilled 12 new wells for a total of 136. The wells were managed by trained local water management committees that collected usage fees with the water-generated revenue, which was used to compensate village-level repairmen who maintained the wells. TFM worked in collaboration with the National Rural Hydrology Service (SNHR), the Fungurume Health Zone (FHZ) and local communities to promote community self-management of the wells. TFM again expanded water distribution in the fast growing town of Fungurume with the addition of eight additional water stations.  As of November 2016, a total of 24 water stations delivered an average 800 cubic meters of clean water to Fungurume residents every day. In Tenke, the TFM Social Community Fund financed the addition of two water tanks of 180 cubic meters each to support the existing network. To complement TFM’s clean water program and in support of the National Ministry of Health’s initiative for “Clean Villages and Schools,” TFM has supported the implementation of the “Clean Village Program” since 2010. As of November 2016, 63 previously certified concession communities had maintained their clean village status and 17 villages had been newly certified as clean villages. Urban water investments also included the construction of public latrines at the Tenke railway station and the Tenke market.

Cholera remained a constant priority health concern for TFM. Despite outbreaks in neighboring health zones, no cases of cholera were reported within the concession area through November 2016. However due to the high risk of cholera in the region and recurring outbreaks, monitoring and awareness campaigns continued. TFM worked closely with the FHZ in a cholera outbreak preparedness effort, providing cholera rapid raid diagnostic tests and transporting cholera treatment and prevention kits from Lubumbashi to Fungurume for the FHZ.
Six measles cases were recorded in the FHZ through November 2016, all of which were imported. A mass vaccination campaign was carried out in the FHZ during which over 97 percent of the over 79,800 children targeted (age six months to 10 years) were vaccinated. TFM provided transportation support to the campaign. Measles prevention remains a public health priority, with 12 of the 14 Health Zones in Lualaba province reporting 370 suspected cases of measles in 2016. Routine vaccinations also continued with 87 percent of FHZ children under the age of one year covered.

TFM remained engaged in the multi-stakeholder Infectious Disease Risk Assessment and Management (IDRAM) initiative. TFM staff were actively involved in the feasibility phase for the design of a participatory One Health disease detection system in southeastern DRC. This innovative system would be based in the local communities and involve all actors responsible for surveillance including health and veterinary authorities, municipal and provincial departments, and receive the support of academia and private sector.

PHOTO DESCRIPTION: The Mimika District Health Office, LPMAK, and Community Health Development (CHD) work together to eradicate malaria in the Mimika Regency of Papua Province. Drainage is monitored and standing water is sprayed to reduce development of mosquito larvae.

Artisanal Mining

Artisanal and small-scale miners, many of whom operate illegally, have limited equipment and expertise at operating in hazardous conditions and can create social and environmental impacts, as well as placing their own health and safety at risk. We recognize that no single solution will entirely address this issue as long as there is cultural esteem associated with artisanal mining, along with unemployment, poverty and buyers for illegal products. However, we believe that a multi-pronged approach including security risk management, government cooperation, stakeholder engagement and socioeconomic development for alternative livelihoods is essential.

Indonesia

PTFI uses controlled riverine tailings management to transport tailings and other sediments to a designated area in the lowlands and coastal zone, called the Modified Deposition Area (ModADA). Thousands of illegal artisanal miners pan for gold in the Otomona River system (downstream of the mill) within the project area. The artisanal miners include local community members, but the majority originate from outside the region.

PTFI Community Liaison Officers routinely socialize the health and safety risks of artisanal gold panning within the company’s project area.  PTFI engages with a diverse group of stakeholders to manage the safety, security, environmental, and economic risks of artisanal mining in and around its operations. This includes regular coordination with the host-government security apparatus to monitor the number of camps and seasonal trends of artisanal mining activities. This data has helped PTFI to better secure areas around the mill and to improve its proactive engagement with artisanal miners in response to a recent increase in mill incursions by illegal panners. Variations in the milling process impact the recoverable gold for artisanal miners. Communicating around projected gold availability based on mine planning helps set panners expectations.

PTFI continued to note an increase in the number of panner camps in the lowlands, which has presented challenges with levee maintenance and other earthworks associated with managing the ModADA. PTFI’s lowlands operations and community teams regularly coordinate to determine strategies for effective engagement with panners based on location and timing of operational plans. This coordination is important to help reduce the potential for pedestrian safety incidents. As part of this effort, PTFI has contracted approximately 30 former artisanal miners to work as safety guards around the ModADA. They are responsible to educate artisanal miners about the movement of heavy equipment in the ModADA and to identify other areas to mine safely. This coordination has also helped address potential conflicts associated with illegal settlements and the footprint needed for maintenance of the lowland system.

There is a risk of increased gold panning activity in the short term due to higher gold grades at the bottom of the Grasberg open pit, followed by a period of lower gold grades with the transition to solely underground production. PTFI is working to socialize this with the panning community, regional government and other relevant stakeholders.

PTFI Community Liaison Officers routinely socialize the health and safety risks of artisanal gold panning within the company’s project area.The potential use of mercury by illegal gold panners remains a concern. PTFI monitors regularly for mercury use via routine environmental monitoring programs, and mercury has not been detected above natural background levels in the estuary ecosystem. PTFI also maintains a continuous air mercury monitoring system in the town of Timika. Since 2010, mercury continues to be detected at elevated levels in parts of the town where gold shops are present. PTFI educates the proprietors of the local golds shops of the environmental and health risks of using mercury. Due to these monitoring systems and educational outreach, PTFI believes the risk of mercury use in the river system has been significantly reduced. Community Liaison Officers are routinely in the field to socialize the health and safety risks of artisanal gold panning.

PTFI continued to work with a third party in 2016 to support stakeholder engagement efforts with illegal gold panners. This organization has conducted an update to the 2012 baseline survey on panning activity in both the highland and lowland areas. Given the sensitivity of illegal artisanal mining under Indonesian law and the associated risks, PTFI recognizes the importance of a neutral third party in helping to establish better information gathering and two-way communication.

Democratic Republic of Congo

Though artisanal mining is widespread throughout the mining regions of the DRC it is illegal except in specially designated ‘artisanal mining zones’ established by the DRC government. DRC mining law specifically excludes artisanal mining within private, industrial mining concessions such as our former TFM operation. Illegal artisanal mining in the TFM concession remained a significant security risk during 2016 – in part due to the large-scale surface or near-surface deposits of high quality of ore, the proximity of the working areas to nearby populations and the lack of alternate economic activity. Some anthropologic studies also indicate that, in many cases, artisanal mining activities are culturally part of passage to manhood. In addition to our established security measures, we addressed the issue through a combination of ongoing training on the Voluntary Principles, engagement with the local community security council and investment in economic development programs to promote long-term growth and alternative livelihoods in the community.

TFM continued to engage with the DRC authorities to operate control measures at the entry and exit points of the concession and to implement mobile security monitoring. Fencing was also been installed around active mining pits with warning signs to discourage trespassing. TFM Community Liaison Officers conducted awareness campaigns to educate the community about the risks associated with artisanal mining activity.

PHOTO DESCRIPTIONS: PTFI Community Liaison Officers routinely socialize the health and safety risks of artisanal gold panning within the company’s project area.

Freeport in My Community