Controversial pulp mill set to resume operations

The Jakarta Post, Jakarta

A controversial pulp mill owned by Toba Pulp Lestari (TPL) in North Sumatra looks certain to resume permanent operations, despite strong environmental opposition.

Wagimin Wongso, president of TPL, formerly PT Inti Indorayon Utama, said in Jakarta Friday that following extensive preparations and a month-long test run, the pulp factory would open limited operations in March.

In its first year of operation the factory would use 700,000 cubic meters of timber, supplied from its industrial estates, to produce 150,000 tons of pulp, he said. Its maximum output was estimated at 1.1 million tons of pulp from about 250,000 cubic meters of wood.

"In the first years, we will operate in a limited capacity to meet environmental interests, to show the public that our company is committed to preserving the environment and to empowering human resources in the area where we are operating," he said at a press conference.

Waimin said TPL had built a waste water plant to manage its toxic waste water and utilized technology to minimize odors and neutralize other hazardous chemical waste.

With an injection of US$50 million from Hong Kong-based Sternt Capital Ltd and a consortium of stakeholders in Boston, the company, previously owned by Sukamto Tanoto of Radja Garuda Mas Group, is expected to export about 70 percent of its output to Japan, China and Taiwan.

From an environmental point of view, TPL had been operating for a month in accordance with environmental conditions required by the government and "so far, we have received no complaints on our waste water and gases released into the air," he said.

The planned opening of the pulp factory has met opposition from a small number of people in North Sumatra, religious institutions and an alliance of non-governmental organizations, who all cite the company's previous bad record.

The company, established in 1989 under former president Soeharto's repressive regime, has drawn strong protests from numerous sides for its arrogance and the absence of its contribution to local community development in Porsea and Toba- Samosir regencies, about 200 kilometers south of Medan, the capital of the North Sumatra province.

It has been blamed for alleged water and air pollution in the regency, rampant deforestation and a drop in water levels at lake Toba. No environmental studies have been conducted to verify the claims.

Sporadic anti-TPL demonstrations over the last four years, which led to the factory's temporary suspension of operations in July, 1999, has claimed tens of lives.

So far, 16 protesters, including two church ministers, have been charged after allegedly damaging the Porsea district head's office during a rally near the factory last November.

TPL spokesman Edward Depari said it was committed to complying with all social, environmental and economic requirements set by the government as conditions to resuming operations.

"TPL accepts the proposed establishment of an independent audit team to audit its performance annually and it's ready to accept a permanent closure should it breach environmental standards set by the environment minister's office. It will also supply logs as raw materials to the pulp mill from its industrial estates in North Sumatra.

"The management has paid Rp 5 billion in advance to a foundation established by Toba-Samosir administration and the local community to carry out local community development programs to empower local people," he said.

The management would contribute one percent of its annual profit to the programs, besides paying an estimated Rp 55 billion in taxes to the local administration, he said.

Postdam Hutasoit, a member of the House of Representatives' Commission V on environment and industry, called on NGOs and students to exercise patience and give TPL a chance to improve its social, economic and environmental performance.

"Toba-Samosir, a new regency with 350,000 people living in poverty, needs industries to stimulate its economic growth. TPL should be given the chance to resume operations in efforts to empower the local administration and local people," he said.

However, it would not be difficult to close the company down should it break its commitment, he said.