A matter of commitment: Porsea pulp

Ridwan Max Sijabat, Staff Writer, The Jakarta Post, Porsea, North Sumatra

For many people in Porsea, a small town some 200 kilometers south of the North Sumatra capital of Medan, the name of pulp mill company PT Toba Pulp Lestari (TPL), previously PT Inti Indorayon Utama (IIU), is identical with environmental catastrophe, human rights abuses and arrogance of a conglomerate owner. For many others, however, including the government, the high-scale pulp industry provides job opportunities for more than 1,500 locals and is a source of income to both the central government and the Toba-Samosir regental administration.

The public-listed company has been stuck in a serious dilemma that led to the temporary suspension of the pulp mills' operation in July, 1998, following increasing protests organized by an alliance of non-governmental organizations (NGOs) both at home and abroad. It has been blamed for the decreasing water level in Lake Toba as well as a series of negative impacts to the environment, including water and air pollution in the regency. The temporary suspension of the pulp mills' operation resulted in massive layoffs and the loss of some Rp 55 billion (US$6.1 million) in annual revenues to the government.

Yet, a small group of Toba-Samosir locals, with the support of NGOs, student activists and certain religious leaders, continues their resistance of the planned reopening of the pulp mills. An anarchic demonstration staged by hundreds of locals and students last November ended with the arrest of 16 demonstrators, including two church ministers. The suspects are facing charges of damaging private property at the Balige District Court. It was the latest incident in a series of actions undertaken by the local people against both security authorities and the corporation.

The pulp issue has been become complicated as conflicting sides are no longer aware of what is actually the key problem, which could range from environmental issues, human rights abuses, legal uncertainties or business competition, and many unauthorized parties have been involved in the conflict without any comprehensive understanding of the issues at hand.

Visiting the pulp plant in Sosorladang Village some ten kilometers on the outskirts of Porsea will raise a fundamental question in visitors, since the location is adjacent to settlement areas. Pulp mills everywhere in the world emit odor and other toxic gases such as chlorine and absorbable organic halogen to pollute the air. But, who should be blamed for the polluting plant?

It is a known fact that the government issued an official permit for the Raja Garuda Mas holding group (RGM) to set up its pulp and mills in the location on recommendations from the then- national environmental management agency (Bapedal), after conducting analysis on the mills' environmental impacts (Amdal) in 1988. RGM has run the operation for ten years following the temporary closure.

However, many parties do not know that the temporary closure had nothing to do with the company's environmental performance, which was exposed later to demand the government action, but with the company's employees and security personnel and their arrogance in the field. The company's trucks, carrying logs from forest areas in the region, hit several pedestrians but went free without a trial nor compensation. The trucks have also damaged the road network, but without contributing to any repair or upkeep. The local Batak community, including religious institutions such as the Toba Batak Protestant Church (HKBP) and the local Roman Catholic Church, felt uneasy with the way the management and the security authorities treated such incidents, but they could do nothing under former president Soeharto's repressive regime.

The anti-Indorayon movement was launched by the alliance of NGOs following Soeharto's resignation in May 1998 to enter the reform era. The increasing protests led to a temporary suspension of mill operations under Soeharto's successor B.J. Habibie. Mounting international and domestic pressures, however, convinced the government to allow the pulp mills to resume operations to ensure a safe investment climate and legal certainty to foreign investors.

So far, the core problem has been the absence of social, legal, political and environmental commitment, from the investors, authorities and even the local community, to break down their conflicting interests.

The pulp mills should have no problems were it committed to carrying out a development program to empower the local community, and to forging cooperation with local NGOs and universities to make them important assets of progress in the regency.

Aware of the company's numerous faults in the past, TPL president Wagimin Wongso vowed to carry out a series of development programs to empower the local community and to install environmentally friendly technology to keep environmental hazards to a minimum or reduce them to well below the accepted levels.

The relocation last year of the polluting rayon mill to China is expected to reduce the consumption of wood products from the nearby forests and the emission of pollutants into the environment.

Wongso said the company, with its new paradigm under two consortia of new investors from Hong Kong and Boston, would pay serious attention to environmental and social problems in running the pulp business. They were also open to the idea of conducting an annual audit through an independent auditing company appointed by the government.

Under the autonomy law, the Toba-Samosir administration has political and economic interests with regards the pulp mills in the regency, as it must display a political will to ensure security and legal certainty for investors in the regency.

The presence of high-scale industries such as PT TPL and PT Inalum is much needed to contribute to the local administration's income, improve the least-developed regency's economic growth and cope with unemployment.

The local administration could also use its annual revenues from the company to purchase its stakes on the capital market, apart from the specific percentage of shares the management will grant to the local community. This shared ownership will strengthen the administration's bargaining power to supervise and control the company in the future. So far, RGM head Soekamto Tanoto controls only five percent of the company's shares.

The secretary of the local administration, P. Simbolon, has said that the local administration sent a team to Kerinci, Riau, and Tangerang, Banten, to study how the two regencies have successfully run pulp mills without any conflicts with the local communities or the environment.

He said the local administration would also encourage local people to plant trees such as pines and eucalyptus in large barren areas of the regencies to supply wood to the pulp mills.

The majority of the local people living around the pulp mill plant has apparently accepted the planned reopening of the pulp mills with hopes that it will contribute to the local community; but a minority of locals are still staging protests to demand the government to close the factory permanently.

Several student groups and church ministers have actively opposed the pulp mills, partly because of the absence of dialog among conflicting sides to clarify the ongoing disinformation and misinformation released on the pulp mills among opposing groups.

Once again, it is a matter of commitment among affected groups to seek a comprehensive solution to the existing problems peacefully. Batak people are commonly known to speak their minds, generally in a blunt manner, but are also known to be honest and democratic.