Johannes Simbolon
\nThe Jakarta Post\/Jakarta<\/p>\n
The nation's mining industry, which has been mired in problems
\nduring the past six years, has yet to see the light at the end of
\ntunnel, experts say.<\/p>\n
For decades, the industry enjoyed peace and growth during the
\nauthoritarian regime of former president Soeharto, who did not
\nhesitate to silence anyone perceived to be making trouble for
\ninvestors, including those in the mining industry.<\/p>\n
However after Soeharto's downfall in 1998, local communities,
\nwho before had got almost nothing from miners began demanding a
\nportion of revenue from nearby mines.<\/p>\n
Anti-mining protests by villagers broke out across the country
\nand some miners were forced to suspend operations due to
\nblockades by villagers.<\/p>\n
This year, the enforcing of the autonomy laws (Law No. 22\/1999
\nand the Intergovernmental Fiscal Balance Law No. 25\/1999), which
\ngive local governments a share in the central government's
\nrevenue from mining, have quieted many of the protesters.<\/p>\n
Mining companies have also become more willing to allocate
\nsome of their earnings to fund community development programs and
\nprioritize local people in their recruitment programs.<\/p>\n
However, despite the generally improved relations with local
\ncommunities, the investment climate in the industry remains
\nbleak, with new foreign investors still avoiding the country and
\nexisting investors still reluctant to make new investment. There
\nhave been no new mining contracts signed by the government during
\nthe past six years.<\/p>\n
This is because of among others the absence of a new mining
\nlaw that is not in conflict with the autonomy laws and the
\nexistence of Forestry Law, which bars companies from operating
\nopen-pit mines in protected forests.<\/p>\n
Ministry of Energy and Mineral Resources director general
\nSimon F. Sembiring said early this month the government expected
\nto complete the drafting of the new law early next year. The new
\nlaw will replace the 1967 Mining Law, which is in conflict with
\nthe autonomy laws.<\/p>\n
Mining companies, meanwhile, say they are not opposed to the
\n1999 forestry law, as they are aware of the right of every nation
\nto determine which areas are out of bounds from mining.<\/p>\n
Their complaint, however, is the law does not provide a
\nsolution to mining investors, who had already invested large sums
\nof money into exploration but could no longer continue their
\nactivities because their contract areas had been declared
\nprotected forests. These investors have threatened to sue the
\ngovernment if the latter failed to honor their contracts.<\/p>\n
After protracted debates among then-president Megawati
\nSoekarnoputri's Cabinet and between the government and the House
\nof Representatives, Megawati decided to solve the problem by
\nissuing a governmental regulation in lieu of a law early this
\nyear that allowed existing mining companies to continue their
\nopen-pit mining activities in protected forests. New investors
\nare however barred from conducting such activities.<\/p>\n
The regulation adds a new article to the forestry law stating
\nall mining licenses and agreements in forests that were in place
\nprior to the imposition of Law No.41\/1999 will remain in effect
\nuntil those agreements or licenses expire.<\/p>\n
The House later endorsed the regulation as a new forestry law.<\/p>\n
The endorsement of the regulation raised protests from non-
\ngovernmental organizations, who fear the law will result in a
\ngreater destruction of the nation's rapidly-depleting forests,
\nand created resentment among legislators who opposed it, some of
\nwhom privately accused their fellow legislators of taking bribes.<\/p>\n
The loud protests from NGOs and some legislators against the
\namendment of the law reflect the public's greater attention to
\nenvironmental matters as well as the deep suspicion among some
\ngroups towards the mining industry.<\/p>\n
And the most high-profile mining story this year, the uproar
\nover the alleged pollution caused by PT Newmont Minahasa Raya,
\nhighlights the deep suspicion, experts say.<\/p>\n
NGOs had begun accusing the subsidiary of American mining
\ngiant Newmont Corp. of polluting Buyat Bay in North Sulawesi
\nseveral years ago.<\/p>\n
The story, however, did not become national news until the
\nmiddle of this year, when some residents of the area claimed to
\nbe infected by \"Minamata\" disease; a condition brought on by
\nmercury poisoning first discovered in Minamata village, Japan.<\/p>\n
However, the first studies by several international agencies,
\nincluding a key Minamata researcher, indicated the \"skin disease\"
\nsuffered by the Buyat people bore little resemblance to the
\ncondition in Japan, and the Japanese scientist concluded the
\nwaters of the bay were not polluted by mercury.<\/p>\n
The police then did a study of their own, concluding the bay
\nhad been polluted by mercury, even though Newmont executives
\ninsisted they did not use the substance.<\/p>\n
A later study by a team, involving government officials,
\npolice, NGOs, and local experts concluded that Newmont, which
\ndisposed of its tailings in Buyat Bay from 1996 to this year,
\n2004, had contaminated the bay with arsenic and that the people
\nliving in the area should be relocated due to the contamination.<\/p>\n
While acknowledging there were elevated levels of arsenic and
\nmercury in its tailings, Newmont, has maintained it adhered to
\ngovernment regulations and provisions of its environmental impact
\nanalysis in disposing of the tailings.<\/p>\n
It also stressed that both the arsenic and mercury found in
\nBuyat Bay \"were in a stable form that does not affect the water,
\nas shown by several years of monitoring\".<\/p>\n
The government has decided to file lawsuit against the firm
\nand several top staff about the alleged pollution.<\/p>\n
The trial of Newmont pollution case, the first in the country
\nagainst a big foreign firm, is expected to attract much attention
\nnext year.<\/p>\n
Mining and oil analyst Paul L. Coutrier warned that the court
\nshould examine the case fairly. Otherwise, it would further hurt
\nthe nation's already unfavorable investment climate.<\/p>\n
\"The international community will closely watch the trial
\nprocess. The court has to examine the case fairly and objectively
\nand any decision it is going to make should be based on
\nscientific proofs acceptable internationally,\" Coutrier said.<\/p>\n
Despite all the problems now confronting the industry, Irwandi
\nArief, an expert at the Association of Indonesian Mining
\nProfessionals is optimistic that the nation's mining industry
\nwill recover.<\/p>\n
\"We are still optimistic about the future of the industry. We
\nare going to solve the problems gradually,\" he said.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/johannes-simbolon-1447899208",
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