January 30, 1997 Via UPSSecurities and Exchange Commission
Office of the Chief Counsel
Division of Corporate Finance
Mail Stop 3-3
450 Fifth Street, N.W.
Washington, DC 20549RE: Freeport-McMoRan Copper & Gold Inc. (the "Company") -Ladies and Gentlemen:
Shareholder Proposal (the "Proposal") submitted by the
Seattle Mennonite Church (the "Proponent")This letter supplements the undersigned's letter of December 31, 1996 and responds to a letter from the Proponent to the Commission dated January 27, 1997 (the "Proponent's Reply"), a copy of which was received by the undersigned and the Company of January 29.
The Company does not believe that the Proponent's Reply effectively rebuts any of the positions taken in our letter of December 31 or that it provides a basis for preventing the Company from excluding the Proposal from its proxy materials. Additionally, although the Company does not believe that it is necessary to provide the Staff with a point by point rebuttal, it does wish to address several points made in the Proponent's Reply.
First, although the Proponent has agreed to modify certain of the misleading statements contained in the Proposal, which continues to impugn the character, integrity and reputation of the Company through unverified charges of improper, illegal or immoral conduct. We acknowledged in our letter of December 31 that certain groups of activists have made frequent misstatements about the Company's operations in Irian Jaya. Neither the repetition of those misstatements in the Proponent's Reply nor the inclusion of certain source materials as attachments to the Proponent's Reply makes those misstatements true.
Securities and Exchange Commission January 30, 1997
Page 2
Moreover, although changing the word "dumps" to "discharges" eliminates the false characterization implied by the former word, changing "mining wastes" to "tailings (mining wastes)" does not.
Second, notwithstanding the Proponent's extended description of its views of the OPIC matter, the Proponent has not addressed the Company's fundamental point, which is that the Proposal whilly ignores the settlement and thereby implies that OPIC's allegations remain outstanding, which is false.
We also take issue with the Proponent's statement that "there is no evidence to support ... the Company's suggestion that the Company's activities have ceased to pose unreasonable or major environmental, health, or safety hazards." The Dames & Moore Environmental Audit provides just such supporting evidence.
Third, the Proponent's lengthy discussion of the complex tribal politics in Irian Jaya supports the Company's position that it is false to state that LEMASA "represents" the indigenous people "most affected" by PT-FI's operations. The Proponent concedes that two tribes (the Amungme and Komoro) were the original inhabitants of the mine site, that tens of thousands of others have migrated to the mine site from other parts of Irian Jaya and elsewhere in Indonesia, and that the two original tribes represent only one-sixth of the current local population. The Proponent also acknowledges the existence of disputes within the LEMASA leadership over it's dealings with the Company and the establishment of "another group representing the Amungme." Even assuming that all of the Proponent's statements are correct, they do not support the assertion that LEMASA represents the indigenous people most affected by PT-FI's operations.
We should also point out that the statement that anyone "represents" the indigenous people grossly underestimates the complexity of the relationships among individual tribes and the primitive level of social development in Irian Jaya, as well as the extraordinary complexities faced by the Company in dealing with local social issues. As an example, we have enclosed as Attachments 1 through 3 recent news articles regarding a tribal conflict that erupted several days ago between the Amungme and Dani tribes, which resulted in six deaths and sixty or more injuries. The Company had nothing to do with the events that led to the conflict, but, as one article states, the Company's "...community workers stepped in to help negotiate a settlement to end the disputes." The Company's workers became involved in such situations simply because the local authorities are not fully equipped to do so at this stage in the region's development, which causes the local people people to look to the Company for assistance and guidance in working out problems that are the responsibility of government in more modern societies.
Fourth, the Proponent's argument that it will "leave to the good faith of the Company to carry out a just, accepted, peaceful and permanent resolution... with the local indigenous population" is self-contradictory in light of the simultaneous assertion that "such a resolution has not yet been attained." Moreover, the Proponent's Reply essentially imposes three specific conditions that must be met before it will acknowledge that such a resolution has been achieved, none of which is within the power of the Company to effectuate: (i) the establishment of a democratic (i.e., elected) local government to control the ITD funds, (ii) termination of litigation alleging human rights and environmental violations and (iii) reduction of the military presence in the area. In effect, the Proponent has conceded that its proposed resolution is so vague as to be meaningless by adding those conditions, with the result that the Proposal's fulfillment, both in general and in the newly offered specifics, is beyond the power of the Company to effectuate.
For the foregoing reasons and those previously provided in our letter of December 31, we continue to believe that the Proposal is excludable from the Company's proxy materials because it (i) is in many respects false and misleading, (ii) is in certain respects beyond the power of the Company to effectuate, (iii) is in certain respects moot and (iv) deals in certain respects with matters relating to the ordinary business operations of the Company.
We enclose six copies of this letter, with attachements, and an additional receipt copy. Please return the receipt copy in the enclosed, self-addressed envelope.
A copy of this letter is being provided to the Proponent.
Very truly yours,
