Investors urged to be 'flexible' over contracts<\/p>\n
JAKARTA (JP): Minister of Mines and Energy Susilo Bambang
\nYudhoyono said the government would honor all mining contracts
\nawarded by previous governments, but called on foreign investors
\nto be \"flexible\".<\/p>\n
\"(There is) no idea at all on the government's side to alter
\nthe contracts ... but if we face problems on the ground, we ask
\nand encourage everybody to sit down, talk and negotiate to find a
\nsolution without changing the contract,\" Bambang said on
\nWednesday evening during a dinner with foreign investors in the
\nmining sector.<\/p>\n
\"If the contractors say this is my contract, this is my book,
\nOK. (But) a black-and-white approach is not conducive to
\n(reaching) a proper solution,\" he said.<\/p>\n
The event was organized by the Indonesia-Australia Business
\nCouncil (IABC) and moderated by IABC president Sabam Siagian.<\/p>\n
Bambang's statement comes amid a growing number of disputes in
\nthe mining and power sectors between investors, state companies,
\nprovincial administrations and the public.<\/p>\n
In the power sector, state electricity company PLN is seeking
\nto renegotiate the terms of the power purchase contracts signed
\nby its former management, claiming the contracts were the result
\nof collusion, corruption and nepotism during the reign of former
\npresident Soeharto.<\/p>\n
In the mining sector, several mining companies in Kalimantan
\nhave been the target of protests by locals demanding compensation
\nfor land and property the companies appropriated during the
\nSoeharto regime.<\/p>\n
The villagers claim the companies, backed by security
\npersonnel, used force to expel them from their land without
\npaying them full compensation.<\/p>\n
In North Sulawesi, Minahasa regency sued gold mining company
\nPT Newmont Minahasa Raya for refusing to pay C-class taxes to the
\nregency administration.<\/p>\n
These taxes are imposed for the excavation of building
\nmaterials and industrial minerals, including sands, stone and
\nkaolin.<\/p>\n
Newmont has reportedly refused to pay these taxes, saying
\nthere is no clause in its contract of work requiring it to pay C-
\nclass taxes.<\/p>\n
During Soeharto's rule, the central government failed to
\nconsult with local residents and provincial administrations when
\nnegotiating mining contracts of work.<\/p>\n
Bambang said the new government would encourage conflicting
\nparties to negotiate and reach win-win solutions without changing
\nthe contracts of work or going to the courts.<\/p>\n
Intelligence<\/p>\n
During the dinner, Bambang, who spoke in English, outlined the
\npolicies his ministry planned to pursue in the oil, mining and
\npower sectors.<\/p>\n
In the mining sector, he said his ministry would focus on
\nmeasures to put an end to illegal mining, which has flourished
\nduring the economic crisis to the detriment of many mining
\ncontractors.<\/p>\n
He said his ministry would take measures to legalize small-
\nscale mining by so-called \"illegal miners\" by allocating land to
\nthem and issuing them licenses.<\/p>\n
The government will train them in proper mining practices and
\nsupervise their activities, he said. \"But we shall enforce the
\nlaw if they are in the wrong.\"<\/p>\n
Bambang said provincial administrations often failed to crack
\ndown on illegal mining because the miners were backed by people
\nin positions of power, including members of the military and
\npolice.<\/p>\n
He said his ministry would send intelligence officers into the
\nfield to find out who was backing the illegal miners, adding that
\nappropriate action would be taken against those found guilty of
\nsuch activities.<\/p>\n
Bambang was Indonesian Military chief of staff for territorial
\naffairs before being appointed minister of mines and energy last
\nmonth.<\/p>\n
Bambang said his ministry also would take measures to ensure
\nall mining contractors employed correct mining procedures,
\nsupported community development programs and protected the
\nenvironment.<\/p>\n
He said all mining contractors currently had some type of
\ncommunity development programs, but the government would seek to
\nimprove the programs by outlining for the contractors the types
\nof programs they would be required to implement and the amount of
\nmoney they would obligated to budget for these programs. (jsk)<\/p>",
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