The Voluntary Principles on Security and Human Rights (VPs) serve as guidelines for our security and human rights programs, including interaction with host-government police and military personnel as well as private security contractors. The VPs serve as a key component of our broader human rights program, which includes implementation of the United Nations Guiding Principles on Business and Human Rights (UNGPs). Not all human rights issues are security issues, and not all security issues are human rights issues - it is at the nexus of human rights and security where our implementation of the VPs resides. 

We have remained an active participant in the VPs Initiative since it was first established in 2000. Our 2019 Annual Report to the VPs Plenary includes country implementation details for Indonesia and Peru as these countries represent our higher risk environments in terms of security and human rights. 

PT Freeport Indonesia

Indonesia has long faced separatist movements and civil and religious strife in a number of provinces. Several separatist groups have sought increased political independence for the province of Papua, where our Grasberg minerals district is located. In Papua, there have been attacks on civilians by separatists and sporadic but highly publicized conflicts between separatists and the Indonesian military and police. Security risks also stem from periodic social and ethnic tensions within the local community and in other areas of the province as well as the presence of in‐migration.

Security Incidents. Shooting incidents directed at PT-FI personnel or resources have occurred within the project area, with varying intensity, for many years. Such incidents have most frequently targeted vehicles on the road connecting Lowlands logistical support activities with Highlands operational areas. Between 2001 and 2019, there have been 93 incidents of gunfire in the PT-FI project area that were associated with mining operations or security personnel directly associated with those operations. Most recently, after no shooting incidents in 2014, there was one fatal shooting incident in 2015 (where a PT-FI security guard was killed, believed to be motivated by a dispute). There were 37 incidents in 2017-2018, one incident in 2019 and one incident in January 2020. Groups espousing separatist motivations have claimed responsibility for many of these shootings, including releasing videos on social media of the shooting incidents.

The 39 shooting incidents from 2017 through January 2020 resulted in 14 injuries to workforce members transiting the Main Supply Road, as well as two injuries to medical services contractors administering care to a community member (who was also injured). During related law enforcement actions, government security personnel suffered eight injuries and two fatalities. No one was injured in the November 30, 2019 and January 13, 2020 shooting incidents.

The safety of our workforce is a critical concern, and PT-FI continues to work cooperatively with the Indonesia government to address security issues within the project area and in nearby areas. We continue to limit use of the road leading to our mining and milling operations to secured convoys, including transport of personnel by armored vehicles in designated areas.

Public and Private Security. The PT-FI Security and Risk Management Department employed approximately 565 unarmed security personnel and approximately 660 unarmed private security contractors and transportation/logistics personnel on a rotational basis. These security arrangements have been necessary to enhance the protection of our employees, contractors, and assets, especially considering the nature of security challenges and the remote and challenging terrain.

PT-FI’s Memorandum of Understanding (MOU) with the National Police was last revised and signed in October 2019. PT-FI also signed an MOU with the Military in December 2019. Both MOUs cover a five-year term and detail the working relationship between the company and the public security personnel assigned to it, such as areas of support, coordination and commitment to PT-FI policies and procedures, including business ethics and human rights. The VPs and FCX Human Rights Policy are incorporated as an attachment to the MOU along with VPs model clauses. PT-FI, like all businesses and residents of Indonesia, relies on the Indonesia government for the maintenance of public order, upholding the rule of law and protection of personnel and property. From the outset of PT-FI’s operations, the Indonesia government has looked to PT-FI to provide logistical and infrastructure support and assistance for these necessary services because of the limited resources of the Indonesia government and the remote location of and lack of development in Papua. PT-FI’s financial support of the Indonesia government security institutions assigned to PT-FI’s operations area represents a prudent response to PT-FI’s requirements and commitments to protect its workforce and property, and better ensuring that personnel are properly fed and lodged and have the logistical resources to patrol PT-FI’s roads and secure its area of operations. In addition, the provision of such support is consistent with the scope of PT-FI’s project area comprising approximately 2900 square kilometers, our philosophy of responsible corporate citizenship, and reflects our commitment to pursue practices that respect human rights. In 2019, the majority of PT-FI’s security budget (71 percent) was directed to PT-FI’s own industrial security requirements (including employee and contractor direct costs, and associated overhead). The remainder of the budget (29 percent) represented PT-FI’s support costs for government-provided security and totaled $22 million.

Please refer to our 2019 Annual Report to the VPs Plenary for more information.

Cerro Verde

Cerro Verde, like all businesses and residents of Peru, relies on the Peru government for the maintenance of public order, upholding the rule of law and the protection of personnel and property. The Peru government is responsible for employing police personnel and directing their operations.

Public and Private Security. As of the end of 2019, Cerro Verde employed 11 security employees and 360 private security contractors. Some private security contractors assigned to the protection of expatriate personnel and explosives storage are armed.

In addition to these security personnel, the national government has assigned Peruvian National Police (PNP) to the site in teams on 1 to 15-day rotations, depending on the availability of the PNP, in accordance with Legislative Decree N° 1267, Supreme Decrees 026-2017-IN, N° 003-2017-IN and N° 018-2017-IN, and Emergency Decree N° 006-2017 (article 11). Team sizes varied over the course of the year. A total of 936 members of the PNP rotated through the site during 2019.

Cerro Verde has limited public security in support of its operation, with the arrangement defined through an MOU with the Peruvian National Police (PNP). Under Peruvian law, PNP officers may volunteer to be assigned to operations such as Cerro Verde during their scheduled leave. This allows the officers to supplement their government salaries at a rate set by Government. They retain their full powers as officers of the law when performing this role and wear their police uniforms, but are not armed. The MOU was amended in December 2019 to extend the term two years. It details the working relationship between Cerro Verde and the PNP, including areas of support and coordination. A commitment to the VPs is included as an addendum to the MOU. Cerro Verde’s share of support costs for government-provided security approximated $1 million in 2019. This support is primarily remuneration, but also includes a limited amount for in-kind support (e.g., daily bus transportation to and from the mine, food and incidentals) provided by the Company.

Please refer to our 2019 Annual Report to the VPs Plenary for more information.

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