The law in the mining sector<\/p>\n
The Constitutional Court's unanimous ruling last Thursday that
\nLaw No. 19\/2004 on forestry is constitutional certainly
\ndisappointed and angered environmentalists as the ruling boils
\ndown to a license for a number of firms to conduct open-pit
\nmining in protected forests.<\/p>\n
The court's president, Jimly Asshidiqie, was quoted by the
\nmedia as saying that the unanimous decision had been based on the
\noverriding need to improve the investment climate in the mining
\nsector.<\/p>\n
The ruling has cleared up once and for all the seven-year
\nimbroglio that had virtually halted new investment in the
\nextractive industries sector (apart from oil and gas) since 2002
\nand threatened to immerse the government once again in messy and
\ncostly international litigation.<\/p>\n
However, citing only the need for an improved investment
\nclimate as the grounds for the decision could lead some to
\nbelieve that the court, which is the guardian of our Constitution
\nand national conscience, had succumbed to the political wishes of
\nthe government.<\/p>\n
We beg to differ with the environmentalists on this particular
\nissue. Given the history of Law No.19\/2004, we should even
\ncommend the Court for its consistency in upholding the
\nConstitutional provision that prohibits the retroactive
\napplication of a statute.<\/p>\n
This legislation originated as a government regulation in lieu
\nof law, which was hurriedly issued in early 2004 and was
\neventually enacted by the House of Representatives as Law
\nNo.19\/2004 in July, 2004, in an effort to correct the glaring
\nerror made by the framers of Law No.41\/1999 on forestry, which
\nwas made retroactively applicable to mining contracts awarded
\nbefore 1999.<\/p>\n
Hence, the amendment essentially boiled down to the insertion
\nof transitional provisions into Law No.41\/1999, which stipulated
\nthat companies that had obtained mining contracts prior to 1999
\ncould continue to engage in open-pit mining in protected forests
\nuntil the expiry of their concessions.<\/p>\n
After all, the insertion of transitory provisions is normal
\npractice in legislation that introduces new rules of the game, or
\nwhich repeals provisions contained in earlier legislation.<\/p>\n
Law No.41 only stipulated that open-pit mining operations were
\nentirely prohibited in areas designated as protected forests, but
\nhad nothing to say about the legal status of the 150 mining
\ncontracts the government had awarded prior to 1999 for open-pit
\nmining operations in protected forests.<\/p>\n
The problem was that many of the 150 mining contractors had
\ninvested hundreds of millions in their concessions, and
\nunilaterally annulling their contracts would have plunged the
\ngovernment into highly expensive and protracted litigation, and
\nresulted in a lack of legal certainty in the mining industry.<\/p>\n
It was this very same principle of non-retroactivity that was
\napplied by the Constitutional Court in its majority ruling in
\nJuly 2004, which stated that the Antiterrorism Law (No. 16\/2003)
\ncould not be applied retroactively to cases arising out of the
\nterrorist attacks in Bali on Oct. 12, 2002.<\/p>\n
Consistency in the upholding of all the articles of the
\nConstitution is key to building up the public's confidence and
\ntrust in the court, and its own ability to perform its role as
\nthe guardian of the Constitution.<\/p>\n
This isn't an easy task as the court has to tread a fine line
\nbetween fulfilling popular aspirations for justice and the
\ndemands of political exigency, while all the time striving to
\navoid any whiff of arbitrariness in its rulings. A credible
\nconstitutional court, both as regards legal competence and
\nintegrity, is vital to rebuilding public trust in the judicial
\nsystem as its ruling cannot be appealed.<\/p>\n
We share the great concern of environmentalists about the
\ndamage that could be inflicted on our forests by greedy miners.
\nThe dilemma, though, is that the sanctity of a legal contract
\nmust be honored, otherwise our economy will collapse into total
\nchaos.<\/p>\n
Law No.19\/2004 seems to be the best compromise that could be
\nstruck between the objective of protecting our forests and that
\nof maintaining legal certainty for investors and the public in
\ngeneral.<\/p>\n
First of all, this legislation does not open wide the gates of
\nour protected forests to open-pit miners as it permits only 13
\nconcessions in such forests. Moreover, the concessionaires
\ninvolved were selected by a special team made up of
\nrepresentatives of the government and the House on the basis of
\nthe level of investment already made, the commercial volumes of
\nthe mineral deposits already found and the potential benefits of
\ntheir operations to the national economy.<\/p>\n
We should respect the Constitutional Court's ruling. Our task
\nnow is to help oversee the enforcement of the legislation to
\nensure that no more companies, besides the 13 existing ones, are
\nawarded open-pit mining concessions in protected forests and that
\nthe 13 mining companies strictly abide by the prevailing mining
\nand forestry regulations.<\/p>",
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"sponsor": "Okusi Associates",
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