Freeport Indonesia CEO says he taped meeting with house speaker

Indonesian parliament speaker Setya Novanto during an official function at the parliament in Jakarta in Nov 2015.
Indonesian parliament speaker Setya Novanto during an official function at the parliament in Jakarta in Nov 2015.PHOTO: AFP

JAKARTA (REUTERS) - The head of the Freeport McMoRan Inc's Indonesian unit, a former deputy at the state intelligence agency, told a parliament ethics probe he secretly recorded a meeting with the house speaker discussing the US miner's divestment obligations to the government.

Freeport, operator of the giant Grasberg copper mine in Indonesia's Papua province, is a key source of resource revenue for the country, and the issue of its operations and contract is politically sensitive.

Speaker Setya Novanto, a member of the Golkar Party, is at the centre of a controversy related to efforts by the copper mining giant to comply with Indonesia's divestment rules and gain an extension to its contract.

Golkar, the party that longtime president Suharto used as his political and elections vehicle, supported President Joko Widodo's opponent in the country's 2014 presidential election.

Freeport Indonesia CEO Maroef Sjamsoeddin told the ethics council he met speaker Novanto along with businessman Reza Chalid at their request to discuss business at a Jakarta hotel in May and June.

"I took the initiative to record it ... because I was by myself and there was two of (them). I needed this to be accountable to guard my mandate to this company," Sjamsoeddin said on Thursday (Dec 3), adding that he had used his phone to record his last meeting with the pair.

Novanto and Chalid attempted to convince Maroef they were acting on behalf of the president and vice president to acquire a 20 per cent stake in the company and interests in its Papua operations, and would help facilitate contract extension negotiations, Sjamsoeddin said.

"The parliament speaker and his friend Reza told me they wanted a 20 percent stake and also asked for a hydroelectric power project," he said. The pair said they were working with chief security minister Luhut Pandjaitan and also wanted to be involved in a planned smelter project, Sjamsoeddin added.

Reza Chalid, Setya Novanto and Luhut Pandjaitan did not answer calls or respond immediately to requests for comment on the matter.

While the government has said the controversy will not affect Freeport's divestment, if Novanto loses his powerful post as speaker it could alter the balance of power in parliament, potentially benefiting Widodo who has not held majority control over the legislature since he took office in late 2014.

Sjamsoeddin also said the attorney general's office was investigating the case and had requested his phone and the recordings as evidence.