Abdurrahman promises to find solution to Indorayon dispute
Abdurrahman promises to find solution to Indorayon dispute
JAKARTA (JP): President Abdurrahman Wahid moved on Thursday
night to break up the fight between those who supported and those
who were against the closure of pulp and rayon fiber producer PT
Indorayon Utama's plant in Porsea, North Sumatra.
Speaking at the Indonesian Democratic Party of Struggle's (PDI
Perjuangan) 27th anniversary celebration, Abdurrahman promised to
find an amicable way to resolve the problem while upholding the
rules of law.
"We have to always uphold our commitments to both the
regulations and international laws," he said. "In the Indorayon
case, for instance, our international commitment must be upheld."
He said the government was in a dilemma.
Wahid also said the government would try to resolve the
problem in a fair way without having to succumb to any particular
interests.
He said the government guaranteed that the resolution for
Indorayon, which was recommended by State Minister of Environment
Sonny Keraf, to be shut down for alleged violations of
environmental laws, would benefit the local people.
The dispute over Indorayon erupted earlier this month when
Sonny's recommendation to shut down Indorayon received mix
reactions from environmental organizations and fellow ministers.
Local non-governmental organizations such as Friends of the
Earth Indonesia and the Lake Toba Preservation Foundation
supported Sonny's recommendation, saying the decision should have
been made years ago.
But, Minister of Trade and Industry Jusuf Kalla, State
Minister of Investment and State Enterprises Development
Laksamana Sukardi as well as Director General for Chemical,
Agricultural and Forestry Industries Gatot Ibnusantosa insisted
that Indorayon could not be shut down without a court decision.
Indorayon's management itself has been calling for the
government to hold a meeting to discuss the problem, together
with other concerned parties, as a preferred resolution process
before bringing the case to court.
Indorayon has been under fire since 1998 when it became the
target of demonstrations of residents living near Lake Toba who
opposed its operations over alleged improper environmental-
related management, which resulted in bad odors and polluted
water and air.
Environmental organizations alleged Indorayon had caused the
water level in Lake Toba to decrease and had harmed forests in
the area.
Indorayon holds a concession right to 269,060 hectares of pine
forest areas in the regencies of Dairi, Simalungun, North
Tapanuli and South Tapanuli in North Sumatra.
Commencing operations in 1989, the company's mill in the
Porsea district has the capacity to produce 240,000 metric tons
of paper pulp in addition to 60,000 tons of rayon fiber a year.
The House of Representatives ordered the company in July 1998
to suspend operations pending an audit on the environmental
impact of its activities.
The company resumed operations in November, supposedly to
allow the environmental audit to take place. The audit, however,
was called off and demonstrations turned ugly when protesters
clashed with company employees fearful of losing their jobs.
The violence forced then president B.J. Habibie in March 1999
to completely suspend the company's operations pending an audit
by an independent auditor to be appointed through a bidding
process.
President Wahid's pledge to find an immediate and fair
resolution to the dispute boosted the trade of Indorayon's shares
on the Jakarta Stock Exchange (JSX) on Friday.
Indorayon's shares jumped by 50 percent from Rp 400 (50 U.S.
cents) to Rp 600 per share during the first trading session.
The price surge led to JSX management temporarily suspending
the trading of Indorayon's shares at 9:44 a.m.
Indorayon is a unit of the Raja Garuda Mas Group, a
diversified conglomerate controlled by local businessman Sukanto
Tanoto.
Indorayon has also floated its shares in the United States
through American depository receipts. (cst)