Fri, 17 Sep 1999

Five consultancy companies bid to audit Inti Indorayon

JAKARTA (JP): Five foreign consultancy companies have been short-listed by the government in the tender to conduct an environmental audit of PT Inti Indorayon Utama Tbk, a senior official at the Ministry of Industry and Trade said on Thursday.

The government is expected to announce its selection next month, Gatot Ibnu Santosa, the director-general of chemical industry at the ministry, said on the sidelines of the Responsible Care Indonesia seminar and workshop.

The publicly listed pulp and paper company which has a major operation near Lake Toba in Porsea, North Sumatra, was ordered by President B.J. Habibie to suspend its operation in March pending the outcome of an independent environmental audit.

Gatot said the five remaining bidders came from Germany, the United States, Finland and Australia.

They have been asked to submit their technical proposals, he said.

The audit must be concluded within six months, including one month to receive verification of the audit results from the Environmental Impact Management Agency, he said.

Gatot said, however, that for the audit to be conclusive, Indorayon must be allowed to resume full operation in order to obtain samples of its waste, which would then be used to determine whether the company was damaging the environment.

Because Indorayon is a foreign investment company, the audit results will be sent to the Investment Coordinating Board, which in turn will issue its recommendation to the President.

The company became the target of demonstrations in July of last year by residents living near Lake Toba who were opposed to its operation.

They claimed the pulp and paper company damaged the environment and presented a health hazard to residents. Environmental organizations said the company caused the water level of Lake Toba to decrease and harmed the forest in the area.

The House of Representatives ordered the company in July of last year to suspend its operation 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 Habibie in March to completely suspend the company's operations. Trading in Indorayon shares was suspended on the Jakarta Stock Exchange following the President's ruling. (02)