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Letter to NZ Super Fund re Freeport

The Chief Executive Officer, and David May, Chairman of the Board of Guardians,
New Zealand Superannuation Fund,
Level 12 Quay Tower,
29 Customs St West,

1 December 2006

Dear Chief Executive Officer and David May,

We have been shocked to learn that the New Zealand Super Fund is investing in US mining giant Freeport McMoRan. According to the Super Fund's Equity Portfolio (as at June 30 2006) it had investments worth $954,608 in Freeport. The company has an unparalleled record of human rights and environmental abuse. We also note that the Super Fund invests $8,068,140 in Rio Tinto the Australian mining company which has a large a joint venture interest in Freeport (40% of the reserves discovered after 1994).

You will be aware that Freeport operates the world's largest copper and gold mine in West Papua, which is subject to the oppressive control of the Indonesian security forces.

In terms of environmental damage it is hard to comprehend the damage being wrought by this mine - the site is so vast that the excavations are visible from space. The mine has created a 230 square kilometre barren wasteland know as the tailings deposition area. Each day Freeport dumps more than 200,000 tonnes of silty sludge, releasing into the river system immense quantities of sediments, and heavy metals such as copper, cadmium and mercury. As a result the river system and the adjacent wetlands can no longer sustain aquatic life. According to some experts the tailings plume has reached the Arafura Sea and may now threaten the coastal mangrove system.

The impact of the mine is particularly devastating for the indigenous Amungme and Kamoro people who have lost the traditional lands and aquatic resources that they rely on for survival, as well as being forcibly displaced from their homes and villages. Freeport has 'decapitated' a mountain held sacred to the Amungme and has brought in thousands of outsiders to create a mining 'boom' town complete with the familiar associated social problems of alcohol abuse and prostitution.

Ever since it first began operations in West Papua over 30 years ago Freeport has provided the Indonesian military with large amounts of money for 'security'. Late last year the New York Times revealed the results of an investigation which showed that Freeport paid nearly US $20 million to individual military and police commanders over a six year period. One of the major beneficiaries was General Mahidin Simbolon a key figure in command of forces in East Timor at the time of the 1999 maelstrom of violence.

Over the years scores of West Papuans have been killed by the military in the mine are and its surroundings. Human rights groups have also documented torture, rape and abductions especially of those courageous enough to express their opposition to the mine.

We note that the Super Fund subscribed to the principle set out in the UN Global Compact as a benchmark to measure the performance of the companies the fund invests in. These principles state explicitly that businesses should support 'internationally proclaimed human rights' and take a precautionary approach to environmental challenges, promote environment responsibility and support the development of environmentally friendly technologies.

The Norwegian Government Council on Ethics recently advised that the waste management system of Freeport was inflicting ""extensive and serious" damage on the environment". Norway has now excluded Freeport from its share portfolio in which it invests its US $240 billion oil fund.

New Zealand should immediately follow Norway's example and withdraw its investment Freeport McMoran and Rio Tinto immediately.

Yours sincerely,
Maire Leadbeater
For the Indonesia Human Rights Committee

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