CRISIS MANAGEMENT

FINAL EXAMINATION

“PT. Freeport Indonesia Big Gossan Collapsed”

Prepared By:
Arief Machmud
Berdho Alase
Citra Dwillysa Putri
Deasy Rosianna
Patricia Karlina

Class:
6 / B / Corporate Communication

JAKARTA
JUNE 2013
 CHAPTER I

THE CRISIS TEAM

This figure below shows the crisis team structure:

Figure 1

Patricia Karlina
Leader / CEO

Berdho Alase Arief Machmud Deasy Rosianna Citra Dwillysa Putri

Legal Emergency & Media Relations Spokesperson
Safety Team

 Patricia Karlina as Leader

The leader in the crisis team will be the only person who takes decisions  and
makes action executions. She also will make the strategy of the communicative
approach that can be used to overcome the crisis.
 Berdho Alase as Legal
As a company lawyer he will be involved into discussing various aspects of the
security in the region and sharing the regional experiments in fighting emergency
and crisis situations. He has to be ready to tackle any sort of crisis and emergency
that happens in Freeport.
 Arief Machmud as Emergency and Safety Team
Emergency and safety team has the responsibility to assign duties. It is one of the
crucial steps in emergency response. He has to make sure all victims in this
incident get the best treatment and take an appropriate action to the deceased
victims and their families.
 Deasy Rosianna as Media Relations
Media relations officer has the responsibility to keep in touch with both traditional
media and online media. She has to know what communicative approach will be
taken toward media and keep the world informed through the official website and
official confirmation in media
 Citra Dwillysa Putri as PR Spokesperson
The spokesperson will be the only one who talks as a representative of the
company. She has the responsibility to provide all information directly to public and
media in an appropriate manner.
 CHAPTER II

INTRODUCTION

2.1 About Freeport

PT. Freeport Indonesia Logo

PT. Freeport Indonesia (PTFI) is an affiliate of Freeport-McMoRan Copper &

Gold Inc. It is a well known major international mining company with headquarters in
Phoenix, Arizona, United States. Freeport mines, processes and explores for ore
containing copper, gold and silver. It operates in the highland areas of Mimika Papua
Province, Indonesia. PTFI market concentrates copper, gold and silver all over the
world.

The complex in the Grasberg mine, is one of the single largest copper and gold
deposits in the world, and contains copper reserves that can be taken of the largest
deposits in the world, except the world’s single largest gold reserves. Grasberg is
located in the heart of the region which is abound with minerals very much, where
exploration activities have constant opportunities to continue to increase our long-living
reserves.

Vision
To be a world-class mining company that builds excellent values and is a source of
pride for all the stakeholders including employees, society and the nation.
Mission
Committed to creatively transform natural resources into prosperity and sustainable
growth through the best practices while prioritizing the welfare and security of our
employees and community, human resources development, social and environmental
responsibilities, as well as industrial safety and health.

Indonesia has a potential region for mining industries. The growth of mining
industries shows good development and is increasing year by year, according to PwC
survey Mining Indonesia 2013, as cited from republika.co.id reported on May, 30 2013.
Business in mining industries itself, has a lot of occupational risks for the workers in the
mining areas. The companies that run the mining business should understand the
safest process well to cultivate the natural resources into material result for human
needs. There was a huge number of catastrophes that caused casualties to the workers
in mining process.

AWARDS FREEPORT

2.2 Situation Analysis

Mining Firm, Freeport Indonesia located In Timika, Papua, Indonesia,

experienced a tunnel collapse on 14 May 2013. An emergency response and
safety team are now conducting a search and rescue, the Freeport said in a
statement. At least 39 workers had been in underground training facility when the
Big Gossan tunnel at 74 miles Tembagapura District collapsed. Reportedly, 28
died and 11 injured. Most of the trapped workers are undergoing a training
program. Freeport Indonesia does not expect this event to have a material effect
on mining and milling operations or development activities.
 Freeport Indonesia had informed the government about this incident.
Freeport’s gold production in the first quarter of 2013 reached 212,000 ounces
troy while sales reached 191,000 troy ounces. After the collapse of underground
mines, Freeport immediately postponed their operations. Reportedly, Freeport
produced 220.000 tons of ore per day, which 140.000 tons came from the open
pit mine and 80.000 tons came from the underground mines (Investor Daily, 30
May 2013). Due to the production postponed for 16 days, Freeport had delayed
a 3.52 million ton production. The Energy and Mineral Resources Ministry has
estimated that the state is losing $1.82 million a day in income during the mine’s
production suspension (Jakarta Globe, 30 May 2013).

Republic of Indonesian Police team up with Papua regional police have

formed an investigative team related to this tragedy. Also, they involved numbers
of experts from any reputable universities to investigate this Big Gossan
collapsed. Reported by Tempo.co.id on May 27 2013, Vice of Ministry of Energy
and Mineral Resources, Susilo Siswoutomo, stated that the investigating period
will needs time around 1-2 months.

Following the Big Gossan underground incident, PT Freeport Indonesia’s

internal inspection team beginning May 16th 2013 had been performing a
thorough inspection - starting with visual inspection of utilizing equipment such
as the GPR (ground penetration radar), seismic and prism survey - in the
complex’s permanent facilities, production area, services area and the active
development tunnel within DMLZ and Grasberg Block Cave (GBC).

The main priority was to perform an inspection of the permanent facilities

within our underground complex and all areas that have higher employee density
such as dining hall, religious places, workshop, warehouse, mining area and
main entrance. This is to ensure that all underground facilities are in stable
condition and have adequate ground support to allow comfortable working space
for employees to perform their work safely.
 The mine inspectors from the Ministry of Energy and Mineral Resources
(ESDM) also completed their initial investigation of the Big Gossan underground
training facility on May 23rd 2013 and provided recommendations, which the
company is implementing and currently following up.

The results of PTFI internal inspections confirm that overall underground

mine facilities are safe. However, there are some facilities that are still closed for
further inspection and repairing in adherence to the K3 (Safety and Health)
standards.

Since May 31st 2013, the independent investigation team formed by the
government has also begun its investigation, which included a review of rock
support in the underground area. We will continue to extend our support and
assistance to this team to perform their investigation in PTFI’s mining area, and
will ultimately follow up on their recommendations when presented.

The Company has continued to perform approved maintenance activities

at the open pit and the underground mining areas in order to preserve the assets
and to ensure safe operating conditions upon return to operations. We expect to
resume production based on the recommendations from the Independent
Investigation Team appointed by the Minister of Mines, which we hope to receive
in the near future.

The Company is continuously evaluating and conducting further

assessment on all aspects related to the safety and health of our working
environment. “We reiterate the importance of work safety to ensure our
employees stay focused and adhere to all K3 standards applied in PTFI’s area of
operations to avoid accidents,” said Mine General Manager Nurhadi Sabirin .
 2.3 SWOT Analysis

Strengths Weaknesses

 Has a strong market position, as one of  Has a high operational risk

the largest mining company in the world  According to Multinational Monitor
 Geographically diverse mining assets Magazine, PTFI once listed as one of
 Help improving financial condition (both the ten worst multinational company in
for Papua and Indonesia) 1996
 Has good relationship with government  PTFI activities claimed it could bring
horrific impacts for the environment

Opportunities Threats

 Labor union that can propose or even

 Increasing demand of copper and gold
demonstrate their rights
 Gold prices always tend to rise up
 Natural disasters that could happen in
 Indonesia can be proud of its natural
unexpected time
wealth resources
 Indonesian environment, laws and
regulations
 NGO that concern with environmental
issues

CHAPTER III
 PUBLICS AND STAKEHOLDER

3.1 Stakeholder and Publics

 Stakeholder:
a. Enabling Linkages
Provide organizations the right to exist and pursue their goals (Dozier &
Ehling, p.170). These enabling linkages would include regulatory agencies
and government sources.
b. Functional Linkages
Functional Linkages are those who can contribute or produces something to
the organization. The functional linkages consists of, employees, technical
expert, distributor.
c. Normative Linkages
Provide links that assist collective efforts to solve shared problem (p.170).
These linkages include other organizations such as professional associations
and industry or trade associations.
d. Diffused Linkages
Are ties to groupings of individuals who are not themselves part of an
organization (p.170), the diffused linkages are other NGOs whose take care
of this issue.

This figure below shows how PT. Freeport Indonesia is related to its stakeholder
  Shareholders
 Board of Director
 Government
 Kemenakertrans
 Ministry of ESDM
Association  Police of Republic Indonesia
 Indonesian Mining OUTPUT
Association
 Employees
Competitors  Technical
 Newmont Mining Expert
 Aneka Tambang PT. Freeport 
 Adaro Indonesia
 Agincourt Resources Indonesia
INPUT
 Bukit Asam
 Medco Energi Mining  Police of Republic
International Indonesia
 Batutua Tembaga Raya  Distributor
 Head of Tribes
 Sumatra Copper and Gold
 Media
 Pusaka Nuri taxis.etc.
 WALHI
 Greenpeace
 ILO
 Local Community
(Citizen)

 Specific Target Publics

a. The victims
Victims have become our priority since the tragedy occurred. They have
rights such as medical treatment, that we provide as our responsibility.
b. PT. Freeport Indonesia employees
PTFI needs to ensure the employees that they will be fine and safe when they
work at PTFI. PTFI will take responsibility related to this tragedy.
c. People who want to have a career in Freeport Indonesia.
 PTFI will turn around their perception, in order to get their positive minds
about PTFI, by showing that PTFI still the best company to work with.
d. Families of employees
Families of employees also took part as our target public. We will also
convince them that PTFI surely take responsibility, by prioritizing victims. So
hopefully, families of the victims still feel safe and can reduce their worries.
e. Related government (Kemenakertrans) or any related institution.
PTFI has built and maintain the good relationship between PTFI and related
government, such as Kemenakertrans. PTFI also should make sure that
company will get license to continue operation.
f. Media
Media is one of the biggest channels for PTFI to help spread the news or any
updates related to this tragedy, targeted to our public. Having a good
relationship with them is a must for every public relations.
g. NGO
By having a good relationship with NGO, it will help the company in crisis
time. NGO believed as one of powerful organization that have role and
authority for the future growth of the company.
h. Reputable Universities
To investigate this tragedy, PTFI team up with several experts from numbers
of reputable universities. Those universities automatically become as one of
our public.
i. Community Leaders (Head of Tribes)
Head of Tribes involved as one of our target public, because they take the
biggest responsibilities about local regulation.
j. Police of Indonesian Republic
As a part who responsible with security, we would like to set Police of
Indonesian Republic as one of our important stakeholder.
CHAPTER IV
PERSUASION THEORY
4.1 Persuasion Theory

Persuasion is typically defined as “human communication that is designed to

influence others by modifying their beliefs, values, or attitudes (Simons, p.21).
O’Keefe (1990) argued that there are requirements for the sender, means and the
recipient to consider something persuasive.

First persuasion involves a goal and intent to achieve that goal on the part of the
message sender. Second, communication is the means to achieve that goal. Third,
the message recipient must have free will. Accordingly, persuasuion is not
accidental, nor is it coercive. It is inherently communicational
(http://www.sagepub.com/upm-data/4985_Dainton_Chapter_5.pdf).

Persuasive communication involves the use of verbal messages to influence

attitudes and behavior. Although the context of persuasion must necessarily be
considered, the verbal message, design to sway the hearts and minds of the
receivers, is at the core of persuasive communication. Through a process of
reasoning, the message exerts its influence by force of the arguments
(http://people.umass.edu/psych586/readings/ajzen.1992.pdf).

This is said to occur via the following sequence (Petty & Cacioppo, 1981):

Attention → Comprehension → Elaboration → Integration → Enduring attitude

change

CHAPTER V
COMMUNICATION PLAN
4.1 Goals
After the Big Gossan tunnel collapsed, PT. Freeport Indonesia has several goals to
overcome the disaster, as below:
→ To prioritize people’s safety
In mining industry there are so many occupational risks for the workers who works
in the field of mining process, since it’s concerning of life; the safetiness during
working time is the most important thing to be sure. The biggest responsibility of the
company is to make sure of its employes’s safety

→ To avoid many victims if this happens again

Working with nature has its own risk like catastrophe so the disaster might come at
any time. The company need to make sure to minimalize the risk of casualties if the
disaster occur in the future.

→ To restore the image of PT. Freeport Indonesia after the Big Gossan Tunnel
collapsed disaster.
As a big company PT. Freeport has to create a better image and it needs to
communicate its public about the detail of the disaster that happened caused by
catastrophe.

4.2 Objectives
 To turn around people’s perception caused by the developing of bad news in the
media coverage up to 25% in the end of December 2013 by delivering
company’s value and information to the media and by showing company’s
concern for the workingsafety.
 To enhance company reputation and show company’s good will to its public,
especially to the employees in the amount of 20% in the end of June 2013 by
prepare better safety and promote working safety procedure.
 To inform and educate public that this Big Gossan Tunnel collapse caused by
purely accident to the public through the media coverage in the amount of
 35% in the end of December 2013 by realible data, observation, ivestigation
and research

4.3 Strategies and Tactics

No. Target Strategies Tactics

Publics
1. Victims Make them feel this 1. Take the responsibility for
company cares of the medical cost
employees 2. Take the responsibility for
the casualties whether
injured or deceased

2. Family Supporting their medical 1. Provide compensation for

employees needs the injured victims family
2. Provide allowance for the
deceased family
3. Maintain relationship and
always keep contact with
them.
3. PT. Freeport Focus on Internal 1. Make a short presentation
Indonesia Employees for telling them about this case and give
Employees the truth about this accident. them knowledge how to
handle it.
2. Held a routine simulation
once per three month.
3. Make an improvements for
safety standard
4. Close the tunnel areas that
potentially in danger and
clean the areas from the
workers to prevent the occur
casualties.
5. Provide training for the
management by PR crisis
team about the detail of
accident and persuade them
to communicate to calming
the employees.
4. Related Maintain good relationship 1. Inviting the minister of
Government with the government. energy and mineral
resources to the incident
site.
2. Always give report update
about this accident.
5. Media Allowing media to get as 1. Inviting media for media visit
much as possible incident site.
information related to this 2. Inviting media for media trip
tragedy to whole area of Freeport
3. Prepare media centre to
facilitate media to get
updated news
4. Give report update to the
media, such as press
release.
6. Non Having a sharing moment 1. Round table discussion with
Government with the NGO, in order to the NGO’s to educate them
Organization find out and solve this that this Big Gossen Tunnels
problem. collapse caused by purely
accident.
2. Tell them about safety
instruction that implement
before this accident.
3. Invite the representative of
NGO’s to visit the incident
site.
7. Police 1. Work with police of
Indonesia to handle this
case
2. Provide facilities to support
them during the investigation
process
8. Community 1. Having a discussion with
Leader Timika Head of Tribes to
(Head of educate them
Tribes)
 9. Universities Hold seminars and
discussions to share
knowledge about the
potential disaster in mining
industry
1. Inviting the expertise of
Mining, Educator of technical
studies, and other relevant
field and profession.

10. Potentials Convince them that PTFI is

new still the best place to have a
employees career

4.4 Key Messages

a. On behalf of PT. Freeport Indonesia, we would like to say sorry to all of victims
and families for their lost. May the deceased are rest in peace and our pray
goes for them.
b. We would like to inform that PT. Freeport Indonesia always held a periodic
inspection, but we are deeply sorry regarding to this accident that can happen
whenever which we can’t predict. We don’t want this happen.
c. Also, PT. Freeport Indonesia is fully responsible and supporting for all material
matters for all of the survivors and deceased families.
d. We already made an investigation team, cooperates with several expert from
reputable universities such as Bandung Institute of Technology, to help us find
out what is the primary cause about this tragedy.
e. All of tragedy and disasters will be considered as our evaluation to help us keep
learning on things that can make us better and much more ready to face
whatever the case and situation is.