Abdurrahman promises to find solution to Indorayon dispute<\/p>\n
JAKARTA (JP): President Abdurrahman Wahid moved on Thursday
\nnight to break up the fight between those who supported and those
\nwho were against the closure of pulp and rayon fiber producer PT
\nIndorayon Utama's plant in Porsea, North Sumatra.<\/p>\n
Speaking at the Indonesian Democratic Party of Struggle's (PDI
\nPerjuangan) 27th anniversary celebration, Abdurrahman promised to
\nfind an amicable way to resolve the problem while upholding the
\nrules of law.<\/p>\n
\"We have to always uphold our commitments to both the
\nregulations and international laws,\" he said. \"In the Indorayon
\ncase, for instance, our international commitment must be upheld.\"<\/p>\n
He said the government was in a dilemma.<\/p>\n
Wahid also said the government would try to resolve the
\nproblem in a fair way without having to succumb to any particular
\ninterests.<\/p>\n
He said the government guaranteed that the resolution for
\nIndorayon, which was recommended by State Minister of Environment
\nSonny Keraf, to be shut down for alleged violations of
\nenvironmental laws, would benefit the local people.<\/p>\n
The dispute over Indorayon erupted earlier this month when
\nSonny's recommendation to shut down Indorayon received mix
\nreactions from environmental organizations and fellow ministers.<\/p>\n
Local non-governmental organizations such as Friends of the
\nEarth Indonesia and the Lake Toba Preservation Foundation
\nsupported Sonny's recommendation, saying the decision should have
\nbeen made years ago.<\/p>\n
But, Minister of Trade and Industry Jusuf Kalla, State
\nMinister of Investment and State Enterprises Development
\nLaksamana Sukardi as well as Director General for Chemical,
\nAgricultural and Forestry Industries Gatot Ibnusantosa insisted
\nthat Indorayon could not be shut down without a court decision.<\/p>\n
Indorayon's management itself has been calling for the
\ngovernment to hold a meeting to discuss the problem, together
\nwith other concerned parties, as a preferred resolution process
\nbefore bringing the case to court.<\/p>\n
Indorayon has been under fire since 1998 when it became the
\ntarget of demonstrations of residents living near Lake Toba who
\nopposed its operations over alleged improper environmental-
\nrelated management, which resulted in bad odors and polluted
\nwater and air.<\/p>\n
Environmental organizations alleged Indorayon had caused the
\nwater level in Lake Toba to decrease and had harmed forests in
\nthe area.<\/p>\n
Indorayon holds a concession right to 269,060 hectares of pine
\nforest areas in the regencies of Dairi, Simalungun, North
\nTapanuli and South Tapanuli in North Sumatra.<\/p>\n
Commencing operations in 1989, the company's mill in the
\nPorsea district has the capacity to produce 240,000 metric tons
\nof paper pulp in addition to 60,000 tons of rayon fiber a year.<\/p>\n
The House of Representatives ordered the company in July 1998
\nto suspend operations pending an audit on the environmental
\nimpact of its activities.<\/p>\n
The company resumed operations in November, supposedly to
\nallow the environmental audit to take place. The audit, however,
\nwas called off and demonstrations turned ugly when protesters
\nclashed with company employees fearful of losing their jobs.<\/p>\n
The violence forced then president B.J. Habibie in March 1999
\nto completely suspend the company's operations pending an audit
\nby an independent auditor to be appointed through a bidding
\nprocess.<\/p>\n
President Wahid's pledge to find an immediate and fair
\nresolution to the dispute boosted the trade of Indorayon's shares
\non the Jakarta Stock Exchange (JSX) on Friday.<\/p>\n
Indorayon's shares jumped by 50 percent from Rp 400 (50 U.S.
\ncents) to Rp 600 per share during the first trading session.<\/p>\n
The price surge led to JSX management temporarily suspending
\nthe trading of Indorayon's shares at 9:44 a.m.<\/p>\n
Indorayon is a unit of the Raja Garuda Mas Group, a
\ndiversified conglomerate controlled by local businessman Sukanto
\nTanoto.<\/p>\n
Indorayon has also floated its shares in the United States
\nthrough American depository receipts. (cst)<\/p>",
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