Wed, 05 Apr 2000

Agreement on natural resources sought

JAKARTA (JP): Recent conflicts related to the exploitation of natural resources have led to fears of increased clashes of interest among investors, local communities, and the government.

In a bid to reduce the conflicts, representatives from the business community and non-government organizations focusing on the environment announced on Monday plans to seek an agreement on a general rule for natural resources exploitation.

The search would be conducted through a national conference here, scheduled for three days beginning April 23.

Dewi Motik Pramono from the Indonesian Chamber of Commerce and Industry (KADIN) called for a "handbook" on natural resources exploitation for investors and entrepreneurs.

She said such a handbook would "avoid cases such as PT Indorayon Utama."

The company which produces pulp and rayon fiber in Porsea district, North Sumatra, has been charged with creating environmental damage. Its operations were suspended in 1998 pending results of a new audit.

On Friday lawyer Todung Mulya Lubis, the trustee of Indorayon foreign shareholders -- who hold 86 percent of Indorayon -- said the foreign shareholders have decided to file suit against the government if there was no progress on the new audit.

The suit could be filed at the International Center for Settlement of Investment Dispute in Washington, D.C. by the end of April, he said.

On Monday's press conference Dewi said that a general agreement should be established not only between investors and the government, but also within the government itself.

Ministers have recently issued different statements on problematic cases such as Indorayon and mining company PT Freeport Indonesia in Irian Jaya.

State Minister of Environment Sonny Keraf said on Jan. 18 that he decided to continue with the decision made by B.J. Habibie to temporarily close PT Indorayon. The next day State Minister of Investment and State Enterprises Development Laksamana Sukardi said that the closure would discourage foreign investors.

Regarding Freeport, Sonny said that if necessary the contract between the government and the company should be reviewed, while President Abdurrahman Wahid said the contract would not be amended.

Organizers of the planned event said such conflicts would continue if shareholders did not make a "mutual and concerted effort" to overcome their differences.

About 300 participants from the government, entrepreneurs, non-governmental organizations, universities, and shareholders will be invited to the event. (08)