Land Acquisition and Resettlement - Mining and the Environment: From Ore to Metal - page 597

Clearly, this approach potentially multiplies the number of property transactions, increas-
ing the scope for speculators and adding to the risk that property values will escalate.
It is fair to say that rural resettlement has rarely been totally successful. Often incomes
have not been restored to pre-existing levels, or not for several years afterwards. This means
that resettlement in many past projects has increased poverty instead of decreasing it.

14.7 THE SOCIAL RISKS OF RESETTLEMENT

Resettlement, unfortunately, often affects people who are least able to afford it. Although
the land and its resources are essential to their livelihoods, vulnerable affected commu-
nity groups often have no legally recognized rights to them. They may have little experi-
ence in creating a livelihood outside the community or the social system in which they live,
and i nd it difi cult to cope if they are suddenly removed from their familiar social setting.
If affected people do not perceive the compensation offered as fair, they have no remedy
beyond the court system that may be very distant, hopelessly slow, extremely expensive by
their standards, unsympathetic to the poor, or simply corrupt (Goodland 2004).
Involuntary resettlement reveals social changes and risks that follow well-established
patterns, regardless of the type of project leading to displacement. The frequently used
Impoverishment Risk and Rehabilitation (IRR) Model by Cernea (1991, 1999, 2000)
organizes these risk patterns into eight potential risks, or impacts: landlessness, jobless-
ness, homelessness, marginalization, food insecurity, loss of common lands and resources,
increased health risks and social disarticulation ( Figure 14.2 ). The model is widely
accepted, and is sometimes expanded to include two additional risks: loss of civil and
human rights (Downing 1996) and loss of access to public services including disruption of
formal educational services (Mathur and Marsden 1998). Combined or individually, these

Resettlement, unfortunately, often
affects people who are least able
to afford it.

CASE 14.1
The Freeport Partnership Fund for Community Development -
Damned if you do, damned if you don't

Since 1996, PT Freeport Indonesia's operations have allo-
cated 1% of revenues for the benefi t of the local commu-
nity through the Freeport Partnership Fund for Community
Development (also dubbed the '1% Fund'). This fund is
used to build schools, hospitals, places of worship, housing
and community facilities in the area of the mine operation.
The fund also supports a comprehensive series of health
and educational programmes. All funds are disbursed to
a local community governing board, the Amungme and
Kamoro Community Development Organization (LPMAK),
which is governed by a board consisting of local indigen-
ous tribal, church and community leaders. LPMAK approves
and funds local programmes.
By 2004, total contributions to the partnership fund
since inception had reached approximately US$ 152 million.

In its December 1, 2003 issue, Business Week magazine
published the results of its survey ranking America's most
philanthropic companies and listed Freeport-McMoRan
Copper & Gold Inc. as America's most philanthropic com-
pany in terms of cash given as a percentage of revenues.
This is largely due to the Freeport Partnership Fund for
Community Development.
However, the fund does not come without controversy.
Critics claim that Freeport too often intervenes in LPMAK
decision-making with a 'we know best' attitude. The 1%
Fund is also cited as a source of confl ict, since it has
created jealousy between local tribes (the 'haves' and
the 'have nots'). It is also said that the purpose of the
funds is not clear. Some critics perceive the fund as 'riot
money' paid to settle violence in 1996. There is also the

claim that too little is achieved with too much money
spent.
Thom Beanal, the Amungme tribal leader and a vocal
supporter of independence for Papua, has fought the
company from outside and inside. He stated that the fl ood
of money from the community fund was ruining peoples'
lives.

Graphic: Logo is copyright of Freeport McMoran Company