Controversial mining regulation may be rejected by House

Rendi A. Witular, Jakarta

Most legislators deliberating a controversial government regulation in lieu of law on mining expressed their opposition on Wednesday to a provision in the regulation that allows 13 mining firms to resume their operations in protected forests.

Herman Widyananda, the chairman of the House of Representatives' special committee assigned to deliberate the regulation, said that although it was not yet final, most of the committee members were determined to reject it.

"Most of the team members are likely to annul the regulation as we suspect there may have been some irregularities involved given that it was issued in a hurry when the House was in recess," said Herman after a meeting with Minister of Forestry M. Prakosa and Minister of the Environment Nabiel Makarim.

The House special committee deliberating the regulation consists of legislators from Commission VIII on energy and Commission III on forestry and agriculture. The approval of the House is needed in order for the regulation to take binding effect.

The government issued the regulation in March, and it allows open-pit mining in protected forests as long as the mining companies had signed contracts with the government prior to the enactment of Law No. 41/1999 on forestry, which prohibits open- pit mining in protected forests.

The regulation was issued to provide an immediate solution to a dispute between the government and several mining firms whose operations had to be halted following the enactment of Law No. 41/1999. The dispute had been going on for more than two years.

To follow up on the implementation of the regulation, the government issued Decree No. 41/2004 in May to allow 13 mining firms to operate in protected forests.

Herman, who is from the Golkar Party, said that if the regulation was revoked, the country should be ready to face the legal repercussions as the result of the filing of claims by the 13 firms in international arbitration courts.

"According to one study, we would have to pay US$22.7 billion if we lose these cases. This amount, however, is nothing compared to the losses that would result from the destruction of our virgin forests in the future," he said.

The House is expected to give its final say on the regulation on July 15, just one day before it goes into recess.

Aside from questioning the impact of the mining operations on the surrounding environment, the legislators also questioned the process of selecting the 13 firms, which they said was not transparent.

"We have not received satisfactory answers from either Prakosa or Nabiel regarding transparency during the selection of the companies. Prakosa seemed to be trying to avoid answering our questions," said Herman.

Another team member, Tari Siwi Utami of the National Awakening Party (PKB), said some of the 13 firms were not among the list of 22 mining companies previously proposed by the government for the receipt of licenses to operate in protected forests.

"Some of the 13 companies are not among the 22 qualified firms that it was previously proposed would get licenses. We feel there is a lack of transparency here," said Tari to Prakosa during the hearing.

Prakosa readily admitted that the 13 firms had been selected as they had a "serious intention and major potential to take their cases to international arbitration, while the other firms were not that serious."

Eyebox for mining

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Concessions of the 13 mining companies

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 (North Luwu, Kolaka, Kendari,

Morowali 218,828 ha

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, South

Kalimantan 15,860 ha

10. Weda Bay Nickel Central Halmahera,

North Maluku 76,280 ha

11. Gag Nikel Sorong, Papua 13,130 ha

12. Sorikmas Mining North Sumatra 66,200 ha

13. Aneka Tambang Kendari, Southeast Sulawesi 14,570 ha

Source: Ministry of Forestry