13 companies to resume mining in forest areas

Fitri Wulandari, The Jakarta Post, Jakarta

President Megawati Soekarnoputri has signed a presidential decree to allow 13 mining companies to resume activities in protected forest areas.

Presidential Decree No. 41/2004, signed on May 12, is a follow up to the Government Regulation in Lieu of Law No. 1/2004 which allows open-pit mining operations in protected forests as long as the mining companies had contracts prior to the introduction of Forestry Law No. 41/1999, deputy cabinet secretary Erman Radjagukguk said on Friday.

The Forestry Law prohibits such activities.

The regulation is similar to the Forestry Law except that it has an additional clause stipulating all mining licenses and agreements involving forest areas that existed prior to the imposition of the Forestry Law will remain in effect until the agreement or license expires.

Business analysts have praised the issuance of the regulation, saying it shows that Indonesia honors contracts. They claimed it would also prevent the government from being sued at arbitration courts, which could result in billions of dollars in losses. However, it sparked protests from environmental activists who insist that open-pit mining in protected forests should be banned as it had causes severe destruction of the country's forest resources.

The regulation still needs approval from the House of Representatives.

The 13 mining companies are among the 22 mining firms who sought to resume operations in protected forests.

They received contracts from the government years before the Forestry Law was introduced and the government designated their concession area as a protected forest.

Government data indicates that the 13 companies generate US$379.81 million in taxes and non-tax revenue annually for the government. They absorb 47,269 local employees.

Simon Sembiring, Director General of Geology and Mineral Resources at the Ministry of Energy, said only companies listed in the presidential decree could start operations for the time being.

Other companies which had also signed contracts prior to the introduction of the Forestry Law may resume operations if the House approves the regulation.

"But of course, they will be tightly screened," Simon told the Post.

Ibox:

13 Mining companies to resume operation

Name Area Concession

1. Freeport Indonesia Mimika, Papua 10,000 ha

Freeport Indonesia Puncak Jayawijaya, Papua 202,380 ha 2. Karimun Granit Riau 2,761 ha 3. INCO Sulawesi 218,828 ha

(North Luwu, Kolaka

Kendari, Morowali) 4. Indominco Mandiri East Kutai, E. Kalimantan 25,121 ha 5. Aneka Tambang North Maluku 39,040 ha 6. Natarang Mining Lampung 12,790 ha 7. Nusa Halmahera Mineral North Maluku 29,622 ha 8. Pelsart Tambang Kencana South Kalimantan 201,000 ha 9. Interex Sacra Raya East Kalimantan, 15,860 ha

South Kalimantan 10. Weda Bay Nickel North Maluku 76,280 ha

(Central Halmahera) 11. Gag Nikel Papua (Sorong) 13,130 ha 12. Sorikmas Mining North Sumatra 66,200 ha 13. Aneka Tambang Southeast Sulawesi 14,570 ha

(Kendari)