Ending the mining imbroglio<\/p>\n
The government has decided to end once and for all the
\nimbroglio that had virtually stopped new investment in the mining
\nsector since early 2002 and threatened to plunge Indonesia into
\nmessy international litigation with billions of dollars in
\npotential losses.<\/p>\n
President Megawati Soekarnoputri signed last week a regulation
\nin lieu of law that amended Law No. 41\/1999 on forestry, thereby
\nallowing companies, mostly foreign investors that had obtained
\ntheir mining contracts before 1999, to engage in open-pit mining
\nin protected forests.<\/p>\n
The amendment simply boiled down to the insertion of
\ntransitional clauses to Law No. 41\/1999 that stipulate that
\ncompanies that obtained their mining contracts before 1999 will
\nbe allowed to continue open-pit mining in protected forests until
\nthe end of their concessions.<\/p>\n
The amendment simply corrected a mistake the government and
\nthe House of Representatives made in the enactment of the law.
\nThe transitional clauses should have been stipulated in Law No.41
\nbecause the law introduced completely new policies.<\/p>\n
Transitional clauses are normal provision in laws that
\nintroduce new rules or policies and declared null and void what
\nhad previously been legally allowed.<\/p>\n
Law No. 41 only stipulates that open-pit mining is prohibited
\nin areas designated as protected forests, national parks and
\nconservation areas, but does not mention the legal status of 150
\nmining contracts the government had awarded before 1999 for open-
\npit mining in protected forests.<\/p>\n
The law obviously caused a great deal of controversy and legal
\nuncertainty because the ministry of forestry insisted on
\nenforcing the law, even though many of the 150 mining contractors
\nhad invested hundreds of millions in their concessions and
\nunilaterally annulling their contracts would plunge the
\ngovernment into expensive lawsuits that would put the government
\nat risk of having to pay billions of dollars in damages.
\nUnilaterally revoking the concessions also would cause legal
\nuncertainty in the mining industry.<\/p>\n
The government has a valid point in its argument that the
\nsanctity of a contract should be honored, otherwise our economy
\nwould be in total chaos and the country, which is so desperate
\nfor new investment, would become a pariah among investors. And
\nmining is one of the most promising resource-based businesses in
\nthe country, especially in the less developed eastern region, and
\nhas multiple benefits for the whole economy and consequently the
\npeople.<\/p>\n
Moreover, mining companies are usually more careful about
\ntheir management of the forest and the environment because of the
\nlong-term nature of their investment and operations. In fact, it
\nis illegal miners and illegal loggers that have always been the
\nbiggest threats to our forest resources.<\/p>\n
However, allowing all the mining concessionaires to continue
\ntheir open-pit operations would cause devastating damages to
\nIndonesia's forests and biodiversity.<\/p>\n
The regulation in lieu of law that was issued after the
\nCabinet session last Thursday seemed to be a compromise solution
\nto the dilemma without exposing our protected forests to too big
\na risk of severe damages.<\/p>\n
That is because the regulation is not simply a blank check for
\nforeign investors to go on a rampage in the country's protected
\nforests. First of all, only 13 out of the 150 mining contracts
\naffected by Law No. 41\/1999 will be allowed to resume open-pit
\nmining.<\/p>\n
These companies were selected by a special team from the
\ngovernment and the House on the basis of tough criteria. Foremost
\namong the conditions was that the companies had found commercial
\nvolumes of mineral deposits and had invested a great deal of
\nmoney in their concessions, and that their mining ventures would
\ncontribute greatly to the national economy.<\/p>\n
Nevertheless, it goes without saying that the 13 mining
\ncompanies should be subject to stringent supervision. Their
\nmining operations should be based on annual extraction plans that
\nhave been approved jointly by the ministries of mines and
\nforestry to ensure they fully implement good environmental
\nmanagement in their concession areas.<\/p>\n
In this context we are also encouraged to learn that the
\ngovernment is about to issue another regulation in lieu of law
\nthat will introduce stronger measures to fight illegal logging.<\/p>\n
The international community, we believe, will support the
\ngovernment's decision to annul the other 137 mining contracts
\nbecause the global community, after all, also benefits from the
\nbiodiversity and climate-regulating role of our tropical forests.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/ending-the-mining-imbroglio-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}