Minister warns of wrong signals in Indorayon action<\/p>\n
JAKARTA (JP): State Minister of Investment and State
\nEnterprises Development Laksamana Sukardi warned the government
\non Wednesday against arbitrarily closing down publicly listed
\npulp and rayon fiber producer PT Inti Indorayon Utama.<\/p>\n
Laksamana cautioned that closing down Indorayon mills without
\nproper procedures would discourage foreign investors and nullify
\nthe government's efforts to woo back foreign investment to the
\ncountry.<\/p>\n
\"Foreign investors are greatly concerned at how decisions are
\nmade here. The government must conduct a professional and
\nindependent environmental audit before making further steps,\"
\nLaksamana said.<\/p>\n
Laksamana was commenting to reporters on the recommendation of
\nState Minister of Environment Sonny Keraf to the Cabinet that the
\ngovernment close down or relocate Indorayon's plant in Porsea,
\nNorth Sumatra, for allegedly damaging the environment and causing
\npublic hazards.<\/p>\n
Separately, the Jakarta Stock Exchange's (JSX) management
\nannounced on Wednesday that Indorayon's stock trading, suspended
\non Tuesday because of reports on Keraf's recommendation, was
\nreopened on Wednesday.<\/p>\n
\"The office of the coordinating minister for the economy,
\nfinance and industry has notified us that Indorayon has to
\nconduct an independent audit on its operations before the
\ngovernment makes any decision,\" the JSX's management added.<\/p>\n
The statement was signed by chief of the trading section
\nBambang Aribowo and chief of the registration division Yose
\nRizal.<\/p>\n
Laksamana said the audit on Indorayon should precede any
\nmeasures to follow up Keraf's recommendation.<\/p>\n
Laksamana said any definitive ruling on Indorayon should be
\nmade only after the audit result proved the company violated
\nIndonesian laws.<\/p>\n
He added that the government should provide clear-cut,
\nstandardized guidelines for handling business problems to allow
\ninvestors to better calculate business risks in the country.<\/p>\n
Separately, Keraf on Wednesday defended his recommendation to
\nthe Cabinet, saying he could no longer trust Indorayon because
\nthe company had always broken its promises to uphold the
\nenvironmental standards for its mill operations.<\/p>\n
He said there was no need to conduct another environmental
\naudit because a previous audit had found some mismanagement in
\nIndorayon's mill that resulted in environmental damage.<\/p>\n
But Keraf did not give further details as to who conducted the
\naudit and when the audit report was published.<\/p>\n
The government ordered in 1998 an independent audit on the
\nmill, but the planned audit has yet to be conducted.<\/p>\n
Keraf said he would not budge from his recommendation, even if
\nIndorayon pledged to better manage its operations and
\nrehabilitate the damaged areas.<\/p>\n
\"The company can no longer be trusted with environmental
\nconcerns. They have broken so many promises,\" he told The Jakarta
\nPost.<\/p>\n
\"My recommendation is not new. Former commissions of the House
\nof Representatives also recommended that the government close
\ndown the mill for violating regulations concerning the
\nenvironment,\" he said.<\/p>\n
He added that Indorayon had failed to meet many environmental
\nrequirements, including those on water and air pollution,
\nhazardous toxic waste management and environment management since
\nit started operations near Lake Toba in 1989.<\/p>\n
The mill stopped production in late June 1998 after a series
\nof protests by local residents alleging the company had damaged
\nthe environment and the residents' health.<\/p>\n
An executive of the Toba Lake Preservation Foundation, Payaman
\nJ. Simanjuntak, said his organization supported Keraf's
\nrecommendation, calling it a proper decision.<\/p>\n
He said the company's presence in the area had been rejected
\nby local communities from the outset for fear of environmental
\ndamage.<\/p>\n
\"Indorayon has no commitment to the environment. For example,
\nit deliberately built a duct under the mill to secretly channel
\nits liquid waste to the nearby river and was very careless in
\nwaste handling,\" he said.<\/p>\n
The foundation had several times asked the previous government
\nto close down and relocate Indorayon's mills to other areas, such
\nas a site across from the Bukit Barisan mountains, he said after
\na meeting with Keraf on Wednesday.<\/p>\n
Keraf said Indorayon should be allowed to relocate its mill to
\nother areas, provided the company involved government
\ninstitutions in preparing for an environmental impact study on
\nthe new site.<\/p>\n
He said an immediate closing down of Indorayon would not
\nnecessarily discourage foreign investors.<\/p>\n
\"I believe all foreign investors are concerned with the
\nenvironment and are aware of the legal consequences if they fail
\nto meet the requirements. The government will never hinder
\ncompanies from operating in Indonesia as long as they follow the
\nregulations, including those on the environment,\" he said.<\/p>\n
Indorayon, which has an annual capacity of 180,000 metric tons
\nof dissolving pulp and 60,000 tons of rayon, began operations in
\n1989.<\/p>\n
Apart from trading on the Jakarta Stock Exchange, the company
\nhas also floated it shares in the United States through American
\ndepository receipts. (03\/cst)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/minister-warns-of-wrong-signals-in-indorayon-action-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}