This project is centred on the world's biggest gold deposit and third biggest copper deposit and is controlled by the US company Freeport-McMoRan Copper and Gold, which has invested $2bn.
It is estimated that there are deposits of 22 million ounces of gold, 37 million ounces of silver, and 15 billion cubic pounds of copper with a total value of $50bn. The mine is located 2,700 miles east of Jakarta and is Indonesia's biggest development project.
The concession of more than a million acres awarded by the Indonesian authorities over the lands of the Amungme tribe stretches from the snowclad peak of Indonesia's highest mountain to coastal rainforests.
The killings and torture inflicted on the Amungme and others were first reported in May this year by the local Catholic bishop Mgr H F M Munninghoff to the Indonesian Conference of Catholic Bishops.
He reported torture carried out in the area of the mine by the Indonesian army units brought in to protect it. His report has been confirmed by an investigative team sent in by the Indonesian government's Human Rights Commission. They found 16 had been killed and four were missing. An investigation by the Australian government in July put the number of deaths since mid- 1984 at 22.
Many of those killed are of the Amungme tribe, some members of which had protested the loss of their lands.
RTZ dismissed these accounts when they were drawn to its attention by two shareholders, Mr and Mrs Wilcox. John Hughes, head of public affairs at RTZ, wrote to them on 22 June saying: "We understand all the villagers were released and accounted for subsequently."
As for the reports of serious damage to the rainforests and environmental hazards to local tribespeople, these were verified by scientists from Opic in July this year. Their report led to the withdrawal of political risk insurance as of 31 October.
Robert O'Sullivan, Opic's general counsel for insurance and claims, wrote to Henry Miller, a vice-president of Freeport, on 10 October, giving as the reason for Opic's action: "the massive deposition of tailings in the Ajkwe River and Minajeri River severely degraded the rainforests surrounding (them)." He said the tripling of the mines production beyond original plans had overwhelmed the capacity of these rivers to wash away the effluent. Indonesian authorities have permitted the mine to dump 110,000 tons of industrial waste a day into these rivers.
The World Bank is now under pressure from the World Rainforest Movement to withdraw its political risk insurance. The original reports of environmental damage came from the Indonesian environmental organisation Walhi (Indonesian Forum for the Environment), affiliated to Friends of the Earth and funded by the USAID and the Ford Foundation.
It has accused the mine of causing massive pollution and damaging a wide tract of rainforest. A Walhi spokesman said: "This huge mine is massively damaging the rich biodiversity of the areas and harming the health and sustenance of local indigenous communities." Walhi also points out that Freeport would not be permitted to dump potentially toxic mine waste directly into rivers in the United States.
A spokesman for RTZ said: "If we were not satisfied with the way the project was operated, we would not have not have invested." RTZ is proceeding with spending between $450m and $850m to buy into the parent company and is investing a further $850m in the expansion plans that Opic said would overwhelm the rainforest rivers with mine waste.
The cancellation of the insurance comes despite an intensive lobbying effort by Henry Kissinger, the former US Secretary of State, who is a director of Freeport. The company also tried, unsuccessfully, to stop the US government funding for Walhi. The mine's future was reported to have been raised by President Suharto of Indonesia when he dined at the White House in late October.
Mgr Munninghoff said in his report of torture by government troops garrisoning the mine site: "The torture caused bleeding head wounds, swollen faces and hands, bruises, loss of consciousness and death because of a broken neck. The torture was conduc- ted in Freeport containers, the army commander's mess, the police station and the Freeport security post."
He continued: "Surveillance is so tight in the area that it causes fear and tension among the civilian population. Surveillance is conducted in churches, during prayer meetings, in villages and towns, and in the streets where passersby are monitored. Surveillance is conducted by training guns on people, and threatening everybody who is deemed to defy the army/security units ... It has been like this for years.
Mgr Munninghoff said he had spoken to witnesses to the violence and added "It's been going on in Timika for years. In my report, for instance, on Easter Day, one person was stabbed and one person was shot dead. They had done nothing wrong. Over there, people are always being accused of being members of the OPM [the local independence movement]. In fact, they were just celebrating Easter."
Amnesty International is now calling on the Indonesian Government to "allow access to all areas of Irian Jaya for international and domestic monitors, including journalists", to guarantee the safety of all witnesses and to prosecute those believed guilty of human rights violations.
Amnesty said the report by Indonesia's National Commission on Human Rights "provides damning confirmation of grave violations, at a time when the Indonesian government is continuing to assert domestically and internationally that its human rights record is improving."