Cemex opens to amicable settlement of dispute<\/p>\n
Sari P. Setiogi, The Jakarta Post, Jakarta<\/p>\n
An out-of-court settlement to resolve an investment dispute
\nbetween Mexico's cement giant Cemex SA and the government of
\nIndonesia is still possible, according to a spokesman of the
\ncompany's local office.<\/p>\n
Wimar Witoelar, senior advisor at Cemex Indonesia, said that
\nsuch an option was still possible if the government come up with
\na "convincing proposal which could make the company reconsider
\nthe arbitration process".<\/p>\n
"Through arbitration proceedings, Cemex wants the Indonesian
\ngovernment to pay all cost and expenses, but everything is
\npossible in life, so there is also a possibility for out-of-court
\nnegotiation," Wimar told The Jakarta Post on Friday.<\/p>\n
Asked what he meant by a "convincing proposal", Wimar said he
\ndid not want to dictate to the government, but hinted that Cemex
\nwas still hopeful it would be able to have a majority stake in
\nstate-owned PT Semen Gresik, Indonesia's largest cement maker.<\/p>\n
"It has been the company's spirit since the very beginning,"
\nhe said.<\/p>\n
"Cemex wants to show commitment to both the country and
\nemployees. If we hold the majority shares, we are sure there will
\nbe no layoffs. We might hire more employees at certain levels,"
\nWimar said.<\/p>\n
Cemex, the world's third largest cement maker, filed on
\nWednesday a petition against the government with the
\nInternational Center for Settlement Investment Dispute (ICSID), a
\nWashington-based affiliate of the World Bank.<\/p>\n
The move was made after years of efforts to reach a solution
\nto problems with its investment plan in this country had failed.<\/p>\n
In the wake of the country's late 1990s financial and economic
\ncrisis, Cemex reached an agreement with the government to buy a
\n25.5 percent stake in Semen Gresik for US$290 million. But this
\nSeptember 1998 deal also provides an option for Cemex to increase
\nits stake to 51 percent by the end of 2001.<\/p>\n
However, the government could not execute the deal due to
\nstrong protests from PT Semen Padang, the West Sumatra-based unit
\nof Semen Gresik, and local politicians. The protesters opposed
\nthe idea of the company being controlled by a foreign investor.
\nAttempts to resolve this problem have be unsuccessful, leaving
\nCemex looking at an uncertain future for its investment here.<\/p>\n
Some said that the government could not execute the agreement
\nwith Cemex for fear of triggering conflict between the local
\ngovernment in West Sumatra and the central government. Others
\nsaid that certain top politicians were also supporting Semen
\nPadang as without the control of Cemex, they could continue to
\ntreat the company as their cash cow.<\/p>\n
Elsewhere, Wimar also criticized the government for its poor
\nhandling of the affair.<\/p>\n
"We have given enough time to the Indonesian government to
\nnegotiate, but they never submitted an official proposal to
\nCemex. They only use the press to deliver sound-bytes," said
\nWimar.<\/p>\n
He said many times Cemex had asked for a meeting with the
\nState Minister of State Enterprises Laksamana Sukardi, but there
\nwas no response. "Even during the last days before we filed the
\npetition, we still asked to see the minister and there was no
\nresponse."<\/p>\n
Analysts have said the Cemex case could further undermine
\nforeign investors confidence in the country. The country is in
\ndire need of foreign investment to help boost economic growth to
\na level that would be able to create enough jobs for the millions
\nof unemployed.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/cemex-opens-to-amicable-settlement-of-dispute-1447893297",
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"sponsor": "Okusi Associates",
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