Kalla questions recommendation to close Indorayon<\/p>\n
JAKARTA (JP): Minister of Trade and Industry Jusuf Kalla said
\non Wednesday the decision on whether or not to close down pulp
\nand rayon fiber producer PT Inti Indorayon Utama should be made
\nby the court.<\/p>\n
Kalla said the government should bring the case to court so
\nthat a legal resolution to the disputed industrial activities
\ncould be attained.<\/p>\n
\"It's not right to close the mill on the grounds of a
\nminister's recommendation. It's a bad precedence for our legal
\nsystem. We will be sued by foreign investors (of Indorayon) if we
\nshut the mill down without any legal procedures ... The
\ninternational community will question our legal system,\" he said.<\/p>\n
Kalla said he was strongly against the recommendation recently
\nraised by State Minister of Environment Sonny Keraf to shut down
\nor relocate Indorayon's mill in Porsea, North Sumatra, due to
\nalleged violations of environmental regulations.<\/p>\n
Earlier on Tuesday, the deputy of the state minister for
\nenvironment, Aca Sugandhy, reiterated the ministry's intention to
\nstick to its recommendation despite the call from Indorayon's
\nexecutive for a dialogue.<\/p>\n
But Aca said his office was ready if Indorayon's management
\nwanted to challenge the closure proposal in court.<\/p>\n
\"A court settlement is better than allowing another audit to
\ndetermine the fate of the mill because local people may again get
\nfurious and possibly attack and burn the mill, making the
\nsituation even worse for all of us,\" he said.<\/p>\n
Kalla said it was wrong if the government ordered a closure of
\nan industrial project without passing it through a court
\nprocedure.<\/p>\n
\"Indorayon should be given fair treatment to defend itself in
\ncourt,\" said Kalla, who owns a diversified business group.<\/p>\n
Indorayon has been under fire since 1998 when it became the
\ntarget of demonstrations by residents living near Lake Toba who
\nopposed its operations over alleged improper environmental-
\nrelated operations, which resulted in bad odors and polluted
\nwater and air.<\/p>\n
Environmental organizations alleged Indorayon's operations
\nharmed local forests and caused the water level in Lake Toba to
\ndecrease.<\/p>\n
Indorayon holds a concession right to 269,060 hectares of pine
\nforests in the regencies of Dairi, Simalungun, North Tapanuli and
\nSouth Tapanuli in North Sumatra.<\/p>\n
The company, which started commercial production in 1989, has
\nthe capacity to produce 240,000 metric tons of pulp, in addition
\nto 60,000 tons of rayon fiber a year.<\/p>\n
The House of Representatives ordered the company in July 1998
\nto suspend operations pending an audit on the environmental
\nimpact of its activities.<\/p>\n
The company resumed operations in November, supposedly to
\nallow the environmental audit to take place. The audit, however,
\nwas called off and demonstrations turned ugly when protesters
\nclashed with company employees fearful of losing their jobs.<\/p>\n
The violence forced then president B.J. Habibie in March 1999
\nto completely suspend the company's operations pending an audit
\nby an independent auditor to be appointed through a bidding
\nprocess.<\/p>\n
The government said five bidders from Germany, the United
\nStates, Finland and Australia would enter the final round in
\nSeptember. The bidding, however, has not been made so far.<\/p>\n
Indorayon's chief commissioner Palgunadi T. Setyawan said it
\nwould be not fair for the government to shut down the company
\nwithout first specifying the firm's infractions and giving the
\nfirm a chance to correct the alleged mistakes.<\/p>\n
\"What I am asking for here is a fair settlement. Let's all
\nfirst sit down and talk about the problems,\" he said.<\/p>\n
He told The Jakarta Post that Indorayon's foreign investors,
\nwho own roughly 86 percent of the firm, had expressed their
\nregret over the Keraf's recommendation.<\/p>\n
\"Our investors have questioned the legal certainty in
\nIndonesia because it seems that (the government) does just
\nwhatever it wishes,\" he said.<\/p>\n
Palgunadi said besides some possible shortcomings in
\nmanagement, Indorayon had complied with the required
\nenvironmental standards, including passing an environmental,
\nsafety and health audit conducted by United States-based Labat-
\nAnderson Inc. in 1995.<\/p>\n
He cited Labat-Anderson's reports which concluded Indorayon's
\neffluent and the purity of nearby rivers met all environmental
\nstandards and that its forestry operations had a negligible
\nimpact on air quality.<\/p>\n
Indorayon is a unit of the Raja Garuda Mas Group, a
\ndiversified conglomerate controlled by local businessman Sukanto
\nTanoto.<\/p>\n
Apart from trading on the Jakarta Stock Exchange, Indorayon
\nhas also floated it shares in the United States through American
\ndepository receipts. (cst)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/kalla-questions-recommendation-to-close-indorayon-1447893297",
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