Freeport Indonesia Stakeholder Analysis

1
Freeport Indonesia Stakeholder Analysis

• ESM 286
• January 14, 2008
• Kate Kokosinski
• Christina Tsiarta

2
PT Freeport Indonesia Stockholders Description

• An individual or company that legally owns one or
  more shares of stock in a joint stock company.
• Parent company FCX (81.28)
• RTZ (11.4)
• Public (88.6)
• Government (9.36)
• PT-Indocopper Investima (9.36)

3
Human Rights Organization Description

• An organization that advocates for the basic
  rights and freedoms to which all humans are
  entitled.
• Indonesian Environmental Forum (Walhi)
• Australian Council for Overseas Aid
• Catholic Church of Jayapura
• International NGO Forum on Indonesian Development
  (INFID)

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Relative Strength of Stakeholders

• Stockholders 5
• RTZ via FCX pressured PT Freeport to expand their
  output
• Human Rights Organizations 2
• There was opposition from the human rights
  organizations towards PT Freeport, but it was not
  enough to change business as usual.

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Reciprocal Relationship

• Stockholders 1
• Freeport had minimal influence on RTZ via FCX.
  Freeport was utilizing RTZs expertise but was
  not influencing their business practices.
• Human Rights Organizations 1
• Freeport did not consider human rights killings,
  influence on locals

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Nature of Relationship

• Stockholder Freeport 5
• Freeport was very cooperative because RTZ via FCX
  was the major investor (750 million for
  expansion)
• Human Rights Organizations Freeport 0
• Freeports affiliation with the military and
  their mining operations violated the human rights
  of the locals.
• Freeport did not address any criticism from human
  rights organizations.

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Issues to Freeport

• Stockholders
• Guaranteeing investment by prioritizing needs of
  parent company at any cost.
• Is Freeport too dependent on its stockholders?
• Human Rights Organizations
• Could Freeport have prevented killings from
  taking place through cooperation?
• Compensation to local people

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Strategy Recommendation

• Stockholder
• Expose all environmental and social problems to
  stockholders
• Improve communication between stockholders and
  all other stakeholders
• Human Rights Organizations
• Partnership or Cooperation with one or more
  organizations (CBA to ensure compensation)
• Responding to demands and criticism (transparency)