Govt court battle with Cemex looms<\/p>\n
Rendi A. Witular, The Jakarta Post, Jakarta<\/p>\n
The government has indicated it may continue its legal battle
\nagainst Mexican cement giant Cemex SA at the international
\narbitration court, following a deadlock between both parties in
\nthe negotiation for an out-of-court settlement.<\/p>\n
Cemex had earlier agreed to the government's request for the
\nsuspension of a lawsuit scheduled for Jan. 11 to pave the way for
\nsettling the dispute out of court, with both parties agreeing not
\nto continue with any proceedings until Feb. 28.<\/p>\n
"There is a possibility that we may continue with the
\narbitration... There is currently a deadlock in the negotiations
\nfor the settlement," said Roes Aryawidjaja, the head of the
\ngovernment's negotiation team, on Tuesday.<\/p>\n
Roes said the government would try to renegotiate with Cemex
\nover a possible extension to suspend the arbitration hearing and
\nallow the government to come up with better settlement options.<\/p>\n
The Cemex dispute arose when the government failed to fulfill
\nits side of an investment deal signed in 1998. Under the deal,
\nCemex was to acquire majority control in state cement producer PT
\nSemen Gresik, but its West Sumatra subsidiary PT Semen Padang
\nopposed the arrangement.<\/p>\n
The subsidiary company, along with local politicians, were
\nagainst the plan, fearing foreign domination of the cement
\nindustry.<\/p>\n
Cemex countered by filing a lawsuit with the International
\nCenter for the Settlement of Investment Disputes.<\/p>\n
The government has been under pressure to resolve the dispute
\nquickly to help restore investor confidence and avoid paying huge
\npenalties of over US$500 million.<\/p>\n
The government previously planned to sign a memorandum of
\nunderstanding with Cemex on Jan. 25 to end their four-year legal
\ndispute when the company agreed to the government's settlement
\noption. However, the signing was canceled at the last minute for
\nreasons that are still unclear.<\/p>\n
Legislator Azam Azman Natawijana of the House of
\nRepresentatives' Commission VI for industry, trade and state
\nenterprises urged the government to proceed with the arbitration.<\/p>\n
He argued that the out-of-court settlement options provided by
\nthe government to Cemex contained several irregularities that
\nmight cause losses to the state and benefit certain government
\nofficials and former government officials.<\/p>\n
"I suspect there are a number of irregularities in the out-of-
\ncourt settlement options. It is better for the government to
\ncontinue with the arbitration because our position is legally
\nstrong," he said. He refused to go into details of the
\nirregularities.<\/p>\n
According to the Democratic Party faction lawmaker, the
\nCommission plans to summon former Minister of Finance Bambang
\nSubiyanto, former State Minister of State Enterprises Tanri Abeng
\nand his deputy for privatization Herwidayatmo.<\/p>\n
The three are considered responsible for drafting the
\nconditional sales and purchase agreement (CSPA) between the
\ngovernment and Cemex in 1998 for the purchase of 25.53 percent of
\nthe shares in publicly listed Semen Gresik.<\/p>\n
"The deal contains loopholes which have caused state losses.
\nWe want to know if the three have been involved in selling their
\ncountry's assets to foreigners for their own benefit," said Azam,
\nadding that the Commission would urge the government to disclose
\nthe original CSPA documents to the public.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/govt-court-battle-with-cemex-looms-1447893297",
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