Forestry ministry soften stance on mining

Forestry ministry soften stance on mining

Rendi A. Witular, The Jakarta Post/Jakarta

The Ministry of Forestry has issued a new decree setting
conditions for mining firms to operate in protected forests in a
bid to minimize the adverse impacts of their operations on the
environment.

Several articles of the new decree, however, contain
ambiguities that could be abused by mining firms to avoid their
environmental obligations in collusion with corrupt officials
from the ministry.

Ministry of Forestry spokesman Transtoto Handadhari said the
Ministry had endorsed the decree on Wednesday after close
coordination with officials from the Ministry of Energy and
Mineral Resources.

"The decree is designed to limit the potential destruction
caused by mining operations on natural forests and the
environment," said Transtoto during a press conference on
Thursday.

According to the decree, mining firms must first secure an
operating permit from the ministry before starting operations.
The permit will be issued after this is recommended by a joint
investigation team.

However, the costs of the joint team in appraising requests
for an operating permit must be borne by the mining firm making
the request. This, analysts say, could open the way for collusion
between mining firms and the members of joint teams as the latter
will not lack independence in carrying out their duties.

Under the decree, mining firms are required to renew their
licenses every five years.

Each firm has to pay a bond to the government to cover the
cost of rehabilitating their mines after their closure.

A firm will also have to pay some of its yearly net profit to
the government over the course of the mine's life, in case its
concession cannot be rehabilitated.

"The bonds and the profit allocation requirements are to
ensure that firms do not ignore their responsibilities for former
mine workings," said Transtoto, adding that the amount of the
bond and allocation had yet to be decided.

A source at the Ministry of Forestry said the ministry had
proposed that mining firms allocate 10 percent of their net
profits for the rehabilitation of their concessions. However, the
proposal had been rejected by the Ministry of Energy and Mineral
Resources as it was considered to be a deterrent to investment.

It is feared that the failure to stipulate a minimum level of
rehabilitation funds could open the way for mining firms to collude
with corrupt government officials to reduce the money the firms
have to cough up for rehabilitation purposes.

The decree also provides that in exchange for a concession, a
firm will also have to provide a plot of land larger than its
concession if it operates in a province whose natural forests
account for less than 30 percent of its total land area.

The ministry has been criticized for endorsing a controversial
government regulation in lieu of law, which has since been
confirmed by the house as a law, that allows 13 mining firms to
resume open-pit operations in protected forests. With the
issuance of the new decree, the ministry is apparently seeking to
show the public that it cares about the environment.

The law, which was initiated by the Ministry of Energy and
Mineral Resources along with the State Secretary, was endorsed by
the House of Representatives last month. A group of dissident
legislators have said that some of their colleagues were bribed
to approve the law.

Eyebox
Sawn timber not for export

The Ministry of Forestry has issued a joint ministerial decree
with the Ministry of Trade and Industry to ban the export of sawn
timber, following the rampant smuggling of such timber out of the
country.

Ministry of Forestry spokesman Transtoto Handadhari said the
government had decided to ban the export of sawn timber following
reports of rampant smuggling of the timber to China -- something
that is feared could accelerate illegal logging at home.

"The ban has been imposed based on the consideration that the
export of this product fails to optimize the benefits accruing
from the exploitation of the country's forests, and only serves
to trigger more illegal logging and smuggling," said Transtoto.

According to the ministry, Indonesia only exported some
336,000 cubic meters of sawn timber in 2002 to China. However,
based on an official report from the Chinese authorities, the
country imported 1.22 million cubic meters of the product from
Indonesia.

"The huge disparity between the figures recorded by the
Chinese and Indonesian governments shows just how serious the
smuggling is," said Transtoto, adding that Indonesia produced
eight million cubic meters of sawn timber annually for local
consumption. -- JP