vii

PREFACE

Praise to the Almighty Lord, Jesus Christ, for all His blessings and guidance

so that the writing process of this thesis, entitled “STUDY OF GOVERNMENT

POLICY ON PERMITS FOR PT. FREEPORT INDONESIA REGARDING OF

INTERNATIONAL AGREEMENTS AND ITS INFLUENCE ON THE

ENVIRONMENT”, can be completed well. This thesis consists the combination of

knowledge and effort and is made to attain Bachelor Degree in Social Sciences, Pelita

Harapan University, Karawaci.

The author realizes that without the guidance, support and prayer from many

people, this bachelor study and thesis would not have been completed. Therefore, by

this opportunity, the author would like to acknowledge, give the highest respect and

thank following persons:

1) Mr. Roy Vincentius Pratikno, B.Sc., M.M. as the Head of International

Relationa Department for the enduring support, care and guidance during the

author’s undergraduate study; and as the supervisor of this thesis for his time,

patience, guidance, advice, support, and outstanding knowledge sharing that

very helpful so that this thesis could be well completed in timely manner.

2) Prof. Aleksius Jemadu, Ph.D. as the Dean of Faculty of Social and Political

Sciences, Pelita Harapan University and inspiring lecturer.

3) Mr. Victor Silaen, M.A. as the Coordinator of the Final Projects.

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4) Drs. Ignatius Ismanto, M.Si., Mr. Indra V. K., S.Sos, M. Asian St., Mr. Irman

Gumilang Lanti, Mrs. Desideria Lumongga, Mr. Rully Mangunsong, Mr.

Valentino Edy Hermawan, Mr. Bhatara Ibnu Rheza, Mr Jerry Sambuaga, Mr.

Tobias Basuki, and all lecturers that have supported and given valuable

knowledge throughout the three and a half year of the author’s undergraduate

study in International Relations Department, Pelita Harapan University.

5) Mr. Saribua Siahaan, S.Sos. MH. And Mr. Arief as the head of the Public

Relations Department, the Investment Coordinating Board of Republic

Indonesia for the time, support and inputs during the process of data

collecting of this thesis.

6) Mrs. Fransisca Endah, Mr. Nalkukuh, Mrs. Helen Diana, Mrs. Esther Taruli

and all other staffs of FISIP UPH that have given administrational support and

help for the author during her study in UPH.

7) Beloved parents, sisters (Jennivia Kurniawan, Sherlivia Kurniawan) and

brothers (Alvin Kurniawan, Jackson Kurniawan) for the unconditional love,

prayer, support, and care in the writing process of this thesis.

8) All best friends (Jennifer Sanjaya, Vrisca Agatha, Cindy Atmadja) and fellow

friends in International Relations Department, especially from batch 2009,

Thank you for all support, friendship, and kindness.

9) To all friends who participated in the process of finalizing this thesis (Handy,

Jessica Widjaja, Rina Regina, Priscilla Elizabeth, Rycko Endrille, Febriana

Putri, Nunik Sugiarti, Izzul Haq, Robert Suprapto, Fernando Indrawan).

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Thank you for you help, your full support and prayer in the process of

finalizing this thesis.

10) To all names that cannot be mentioned here one by one, thank you for the

guidance, help and support in the completion of this thesis.

The author acknowledges that this thesis is still possessing many deficiencies and

not perfect. Therefore, critics, inputs, and suggestions from readers are welcome

and encouraged for further improvement in the future

Karawaci, 22 February 2013

Jessivia Kurniawan

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TABLE OF CONTENTS

COVER………………………………………...…………………...........………..i

STATEMENT OF ORIGINALITY…………......……………………………...ii

EXAMINER APPROVAL…………………….………………………………..iii

EXAMINATION BOARD APPROVAL……………….……………………...iv

ABSTRACT………………...………………………………………………….…v

ABSTRAK…………………...…………………………………………………..vi

PREFACE………………………...……………………………………………..vii

TABLE OF CONTENTS………………………………………......…………….x

LIST OF FIGURES……………………………………..……………………..xiii

LIST OF TABLE………………………………………………………………xiv

LIST OF APPENDICES……………………………………………………….xv

LIST OF ABBREVIATIONS…………………………………………………xvi

CHAPTER I………………………………………………………………………1

INTRODUCTION……………………………………………………………..…1

1.1 BACKGROUND…………………………………………………...…1 1.2 RESEARCH QUESTIONS………………………………………...…8 1.3 RESEARCH OBJECTIVES…………………………………………..8 1.4 USABILITY RESEARCH……………………………………………9

1.4.1 Practical Uses……………………………………..……….9 1.4.2 Theoretical Uses…………………………………………...9

1.5 RESEARCH METHODS……………………………………………10 1.6 SYSTEMATIC OF WRITING………………………………………10

CHAPTER II……………………………………………………………………13

ANALYTICAL FRAMEWORK………………………………………………13

2.1 LITERATURE REVIEW……………………………………………13

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2.1.1 Local News. 2011. Freeport Case and the Government’s Loss of Conscience…………………………………………………….13

2.1.2 Bobobladi. 2012. The Wrack of Freeport – Environmental Pollution & Human Rights Violation by the Biggest Gold Company in Indonesia...................................................................14

2.1.3 Ari Wahyudi Hertanto. Mining Contract of Work (A Study of Civil Law)………………………………………………………..16

2.1.4 Andriani Salam Kusni dan JJ. Kusni. 2011. Support the Struggle of Workers of PT. Freeport Indonesia. 2011…………...17

2.1.5 Muhamad Pizaro Novelan Tauhidi.2012. “Indonesia Independence of American Independence?”………………...…...18

2.2 CONCEPTUAL AND THEORETICAL BASIS…………………….19

2.2.1 Neoliberals…………………………………………………19

2.2.2 International Cooperation………………………………….21

2.2.3 Multinational Corporation………………………………….23

2.2.4 National Interest………………………………………....…25

2.2.5 Political Economy………………………………………….27

2.2.6 International Agreement…………………………………...29

2.2.7 Government Policy on Mining…………………………….32

CHAPTER III…………………………………………………………………..36

RESEARCH METHOD………………………………………………………..36

3.1 SCOPE OF RESEARCH…………………………………………….36

3.2 RESEARCH TYPE AND METHOD………………………………..37

3.3 DATA COLLECTING TECHNIQUES……………………………..38

3.3.1 Literature Review……………………………………….…38

3.3.2 In-depth Interview…………………………………………40

3.4 DATA ANALYSIS TECHNIQUE………………………………….41

3.4.1 The Narrative………………………………………………42

3.4.2 Illustrative Method…………………………………………43

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CHAPTER IV…………………………………………………………………...44

RESULTS AND DISCUSSION………………………………………………..44

4.1 RESULTS……………………………………………………………44

4.1.1 PT. Freeport Background…………………………………..44

4.1.2 The Terms and the Definition of Contract of Work……….52

4.1.3 Reciprocal Treatment Between PT. Freeport Indonesia to the Environment Around the Mining Area………………………….58

4.2 DISCUSSION……………………………………………………….61

4.2.1 Contract of Work………………………………………….61

4.2.2 Review of The Implementation Contract of Work in General Mining…………………………………………………………..67

4.2.3 Impact on Mining Business Activity……………………..78

CHAPTER V…………………………………………………………………..86

CONCLUSION AND RECOMMENDATION……………………………...86

5.1 CONCLUSION……………………………………………………..86

5.2 RECOMMENDATION…………………………………………….88

BIBLIOGRAPHY……………………………………………………………..91

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LIST OF FIGURES

page

Figure 4.1 Gold Mining Site of PT. Freeport Indonesia……………..………….49

Figure 4.2 Grasberg Gold Mine…........……………………….……….……….51

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LIST OF TABLE

page

Table 4.1. Comparison of Contract of Work 1 and Contract of Work 2………66

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LIST OF APPENDICES

page

Appendix A

Monitoring List……………..………………………………………………. A-1

Proofread Approval….……………………………………………………... A-2

Proofreader’s Curriculum Vitae……………….………………………….... A-3

Appendix B

Interview Transcript with Mr. Saribua Siahaan…………………………….. B-1

Appendix C

Mining Contract of Work of PT. Freeport…………….……………………. C-1

Law No.4 Year 2009 in Mineral and Coal Mining. ………………………. C-2

Law No.23 Year 2010 on the Implementation of Mineral and Coal Mining. C-3

Appendix D

Curriculum Vitae………………………………………………………........ D-1

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LIST OF ABBREVATIONS

CIA Central Intelligence Agency

EIR Executive Intelligence review

FDI Foreign Direct Investment

GDP Gross Domestic Product

JATAM Jaringan Advokasi Tambang (Mining Advocacy Network)

NGO Non-governmental Organization

OED Operations Evaluation Department

USA United States of America