Controversial pulp mill set to resume operations

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.