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How the Mining Goliath is Rewriting New Mexico's Environmental Regulations
The Bloody Footprints of Freeport-MacMoRan
by DAVID CORREIA

Each day at its massive Grasberg mine on the Indonesian province of Papua on the island of New Guinea, Phoenix-based Freeport-McMoRan, the world’s largest gold, copper and molybdenum mining company, removes 3 million pounds of copper and 5,000 ounces of gold from what has become, after decades of strip mining, an eleven-square mile crater carved out of remote rainforest that is visible from space. Each day as it removes gold and copper it dumps more than one hundred thousand tons of toxic tailings into surrounding rivers.

The Grasberg mining complex is exceptional in all kinds of ways. It holds the world’s largest recoverable copper reserves; it constitutes the largest gold reserve in the world; it is the world’s most profitable mine; and it employs 23,000 workers who are paid U.S. $1.50 an hour. That pattern, more than forty years in the making, has created intense animosities among Papuan miners and rebel separatists. To protect its interests and extractive capacity, Freeport has poured millions of dollars each year since the late 1960s—$20 million between 1998 and 2004 alone—into local police and military coffers. Lately it has needed all the protection it can get. Over the past year rebels linked to the Free Papua Movement (Organisasi Papua Merdeka, or OPM) have increasingly targeted Freeport managers and facilities as part of a decades-long struggle for an independent Papua.

And as any Papuan will tell you, independence is impossible as long as Freeport’s toxic tailings wash into the now fish-free Aikwa River and contaminated runoff floods the Wanagon River headwaters. According to historian Denise Leith, Freeport was the first foreign company to sign a contract after Suharto came to power in the late 1960s. In return Freeport became the de facto developer and its executives the new ruling class of  remote Papua, far beyond the reach of its distant Javanese rulers in Jakarta. Freeport gave millions annually to the Suharto regime, which in turn ruthlessly defended Freeport’s interests in Papua.

Suharto is long gone but the struggle for Papua continues and 2012 has been a particularly bloody year in the conflict. A series of OPM attacks against Freeport and Indonesian security forces resulted in more than six deaths. The string of attacks came on the heels of particularly contentious labor struggles at Grasberg where workers demanded steep wage hikes (steep only because anything above the current wage of US $1.50 seems steep when expressed as a percentage). When labor negotiations stalled last year, thousands of miners went out on strike. The peaceful strike quickly turned violent when Freeport brought in bus loads of scabs and strikers were forced to defend themselves against an army of more than 500 Freeport-funded police officers who swept through the protest firing shotguns, killing one union striker and wounding six others.

Despite Freeport’s violent suppression of local labor, its complicity in propping up the brutal Suharto regime, its total destruction of Papua’s highland rivers and lowland mangrove swamps, and the slow, spreading ruin of its enormous mining operation in the rainforest, it is the separatist OPM and, as the Asia Times calls it, its “bow and arrow” insurgency that the US Department of Homeland Security considers a terrorist threat.

None of this is under the radar. But the month after Occupy Phoenix activists marched on Freeport’s Phoenix headquarters in October of last year to protest the police killing at the Grasberg mine, President Obama reaffirmed U.S. support for the Indonesian police state in Papua during a visit to Jakarta in which he committed U.S. marines to the region, a move that the Thai newspaperThe Nation concluded had everything to do with heightened concerns over security at the increasingly volatile Grasberg mine. The global economy hums along on an insatiable and growing appetite for copper (copper cable is the preferred electrical conductor for industrial-scale power generation and transmission and for most telecommunications). Demand for copper now exceeds 16 million tons per year, an amount nearly 25% greater than just a decade ago, and Grasberg alone accounts for nearly 5% of global copper production.

While Papuan miners defended a picket line against Freeport’s bought-and-sold police force, 1,200 miners at Freeport’s Cerro Verde Mine in Peru walked off the job. Freeport bought Cerro Verde in 2007 and along with gold, silver, uranium and molybdenum, it produces 2% of the world’s annual copper production, more than 200 million pounds of copper each year from a massive open pit mine and a massive leaching facility. As firms worldwide report record profits amid surging metal prices (Freeport-McMoRan reported 2011 revenues of nearly $21 billion with profits in excess of $5 billion, a 5.2% increase in profits over 2010) miners not only in Peru and Indonesia but more recently in Chile, Bolivia, Mauritania, South Africa and Zambia have struck in record numbers.

Despite its abysmal social and environmental record, Freeport is expanding operations in the U.S. and in New Mexico may have finally found its new Suharto.

Since her election in 2010, Republic Governor Susana Martinez, a Tea Party favorite, has rewritten, withdrawn or vetoed all environmental regulations related to industrial dairy and oil and gas operations. She began her assault on the environment when she refused to publish a new and stringent dairy pit rule. In 2010 the New Mexico Water Quality Commission agreed to regulate dairy industry manure lagoons, after finally admitting that they contaminate ground water. The new rule included a host of standards including a requirement for synthetic liners.

She then turned her attention to the New Mexico Oil Conservation Division’s 2008 oil and gas waste pit rule. In 2003 the Division conducted a wide-ranging study of the nearly 100,000 oil and gas waste pits in New Mexico—the open pits into which oil and gas firms dump their toxic stew of chemical and salt-saturated drilling fluids and oil slurry. The study forced the Division to admit that nearly 10,000 of these pits leached contaminants into the soil, fouling ground water and wildlife habitat. The 2008 rule required that operators dispose of wastes only in permitted waste facilities. Open pits were banned in favor of closed tanks or pits fitted with liners double the thickness of previous (though unrequired) standards.

But Governor Martinez gleefully gutted the rule, though a lawsuit against the change is pending.

And it gets worse. Just a month before Martinez was elected, Freeport-McMoRan purchased the Chino, or Santa Rita, Mine, an open-pit copper mine east of Silver City in southwestern New Mexico. Once the world’s largest copper mine, Phelps-Dodge mothballed the Santa Rita mine in 2008. According to Freeport, however, the plan to restart the smelter and mine would not be profitable unless the Environment Department lowered existing environmental regulations.

Martinez did them one better. After her 2010 election, she appointed a Freeport-McMoRan lawyer as General Counsel to the New Mexico Environment Department and then, to complete her plan to sacrifice environmental protection for corporate profits, she directed the Environment Department to rewrite copper mining regulations based on language provided to the state by Freeport-McMoRan’s attorneys at the Santa Fe law firm Modrall Sperling.

In the wake of the 2012 Presidential elections, a number of Republican pundits included Martinez on a short-list of possible front-runners for the 2016 Republican nomination. It’s folly of course. The scrutiny of a national election would not reinforce the feel-good, up-by-the-bootstraps, sprinkled-with-Spanish story Martinez peddled in her short speech at the Republican National Convention last summer in Tampa, but rather would reveal a politician who has turned the day-to-day function of state government over to executives of a business investigated by the Securities and Exchange Commission for actions in violation of the Foreign Corrupt Practices Act, a company condemned by Amnesty International for a pattern of violence against Indonesian workers, a firm that has destroyed rainforest in Asia, fouled groundwater in North America, poisoned agricultural land in Africa.

But owns a reliable politician in New Mexico.

David Correia is an Assistant Professor of American Studies at the University of New Mexico and an editor of La Jicarita: An Online Magazine of Environmental Politics in New Mexico.