A matter of commitment: Porsea pulp

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.