Indorayon requests two months for audit preparation<\/p>\n
JAKARTA (JP): Publicly listed pulp and rayon company PT Inti
\nIndorayon Utama asked the government on Monday to give it two
\nmonths to prepare for an environmental audit.<\/p>\n
Indorayon chief commissioner Palgunadi T. Setyawan said after
\nhaving halted its operation for 18 months, the company would need
\ntwo months to reach its optimum production level, a requisite for
\na thorough environmental audit.<\/p>\n
\"We're ready for an environmental audit, but requires that our
\nplant run at its optimum production capacity,\" Palgunadi told
\nreporters at a press meeting.<\/p>\n
Palgunadi responded to a statement last week, by State
\nMinister of Investment and State Enterprises Development,
\nLaksamana Sukardi, outlining a plan to have an independent audit
\nteam decide whether to close or relocate Indorayon's plant.<\/p>\n
The plant, located in the Porsea district, North Sumatra, has
\nsuspended operations since June 1998 under order of former
\npresident B.J. Habibie, pending the appointment of an independent
\nauditor.<\/p>\n
However, State Minister of Environment Sonny Keraf,recommended
\nlast month that the factory be shut down before the government
\nappointed the auditor.<\/p>\n
Palgunadi said the suspension cost the company each month
\n$500,000 to $1 million in maintenance cost while suffering a loss
\nin pulp revenue of $12 million per month.<\/p>\n
\"Therefore we're actually hoping for this audit, anticipating
\nthe possibility,\" Palgunadi said.<\/p>\n
However, he said, only under optimum production levels can the
\nimpact of Indorayon's operation on the surrounding environment
\nbecome apparent to the audit team.<\/p>\n
He said that the company's optimum pulp production was 600
\ntons per day, and it would take eight weeks for the plant to
\nreach this output level.<\/p>\n
He said the company must first procure raw material from a
\nnearby forest, amassing some 3,000 tons of wood, and repair the
\ndamaged road that connects the forest with the plant.<\/p>\n
According to him, the government's plan for an audit would be
\nthe third after the state Environmental Management Agency
\n(Bapedal) and the American auditor, Labat-Anderson, appointed by
\nthe Ministry of Industry in 1995<\/p>\n
The administration of president Habibie ordered a third audit
\nbut no auditor was announced despite an international tender.<\/p>\n
Asked whether Indorayon was willing to relocate its operation
\nshould the government demand, Palgunadi answered a relocation was
\nout of question.<\/p>\n
\"The only option would be either to continue, albeit with some
\nimprovements on our factory if necessary, or close it down,\" he
\nsaid.<\/p>\n
He said if the audit proved Indorayon to be environmentally
\nharmful, a relocation would only mean moving the damage to
\nanother site.<\/p>\n
Palgunadi said foreign investors, who own 86 percent on the
\ncompany's assets, supported the government's plan for an audit.<\/p>\n
He said that generally foreign investors were sensitive to
\nenvironmental issues and would not invest in companies showing
\nproblems in this area.<\/p>\n
\"If an independent audit is part of establishing investment
\nand legal certainty, foreign investors will not object to it,\" he
\nsaid.<\/p>\n
The company, which started its Porsea operation in 1983, has
\nan annual capacity of 240,000 tons of pulp and 600,000 tons of
\nrayon.<\/p>\n
Indorayon's largest shareholder is the Singapore based business
\ngroup of Asia Pacific Resources International Holding Limited
\n(APRIL), which holds 60.7 percent of Indorayon's shares. (03)<\/p>",
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"sponsor": "Okusi Associates",
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