Lawsuit against KPC damaging RI image: PwC<\/p>\n
Moch. N. Kurniawan
\nThe Jakarta Post
\nJakarta<\/p>\n
The recent lawsuit brought by the East Kalimantan government
\nagainst coal mining firm PT Kaltim Prima Coal over delays in the
\nfirm's divestment program had further hurt the country's poor
\nimage among mining investors, an analyst from international
\naccounting firm PricewaterhouseCooper said on Wednesday.<\/p>\n
Firdaus Asikin said the suit had made foreign investors doubt
\nthe country's bona fides in respecting Contracts of Work.<\/p>\n
\"It's a negative sign. The parties shouldn't be bringing the
\ncase here, but rather should be bringing it to international
\narbitration as stated in the CoW,\" he told The Jakarta Post while
\nunveiling the company's latest report on Indonesian mining.<\/p>\n
He said the lawsuit was also forcing existing investors to
\nfurther defer their investment plans.<\/p>\n
The East Kalimantan administration has sued KPC in the South
\nJakarta District Court for intentionally delaying the divestment
\nof 51 percent of its shares. The divestment is part of KPC's
\nobligations under the CoW.<\/p>\n
Firdaus said that should the East Kalimantan administration
\nwin the suit, it would discourage potential foreign investors
\nfrom putting their money in the country.<\/p>\n
The PwC report, which focuses on the performance of Indonesian
\nmining last year, said Indonesia's mining sector continued to
\nmake a valuable contribution to the country's economic and social
\nadvancement last year despite falling profitability.<\/p>\n
The report is based on a survey of 19 producing companies and
\n15 exploration companies.<\/p>\n
Firdaus pointed out that the continued strength of the
\nindustry was of paramount importance to all Indonesian as 98
\npercent of the sector's employees were Indonesian nationals.<\/p>\n
The industry was also an important customer for Indonesian
\nsuppliers, he said, citing that Indonesian suppliers accounted
\nfor 27 percent of industry spending of more that $1.5 billion on
\ngoods and services.<\/p>\n
The report said that the industry's overall net profit
\ndecreased by 33 percent to US$368 million in 2000, despite a 25
\npercent increase in net revenue.<\/p>\n
Total government revenue from the industry in 2000 dropped 2
\npercent to Rp 6.8 billion (US$801.8) from the previous year's
\nfigure, the report said.<\/p>\n
Last year's total tax take from mining companies, including
\nroyalties and indirect taxes, stood at $572.1 million, it said.<\/p>",
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