Government still sees environment as minor issue

Government still sees environment as minor issue

JAKARTA (JP): A local environment organization said here on
Saturday that the government still considers environmental
problems as minor issues and often sides with investors in
settling environmental disputes.

Mas Achmad Santosa, executive director of the Indonesian
Center for Environmental Law (ICEL), said the government must
change such attitudes in the future, and that complying to
environmental regulations should be mandatory for investors
wanting to operate in Indonesia.

"Unfortunately, what the government cares about now is getting
as many investments as possible. The preservation of the
environment has taken a back seat," he told a media briefing.

He said the government must also issue a regulation that
clearly states sanctions for violating the regulations, and how
and when the sanctions will be executed.

Mas Achmad said the government had always taken sides with
foreign investors, although the latter caused damage to the
environment with their recklessness.

The fact that the government eventually allowed pulp and paper
company PT Inti Indorayon Utama to recommence its controversial
pulp plant operations in Porsea, North Sumatra has proven that
the government is leaning on the side of the investors, he said.

"I'd say that the government agreed to allow Indorayon to
reopen its plant because it has eaten up the lobbying by the
company," he said.

"Indorayon's executive Palgunadi and lawyer Mulya Lubis are
known for their strong lobbying and good connections to people in
decision-making circles," he added.

After placing a temporary suspension on Indorayon in 1998, the
government finally decided last week to allow the firm to resume
its pulp production, but ordered it to permanently shut down its
rayon-making unit for environmental reasons.

Mas Achmad said the government made a big mistake by assuming
that pulp production was less damaging than the rayon production.

He said the government itself had clearly stated that
industrial projects, such as pulp and paper plants, using sulfite
or chlorine in the operations were totally prohibited.

But, the government said the final decision was still subject
to an environmental audit, which would be conducted within one
year, before it decides whether the pulp plant should be allowed
to continue operations, be relocated to another area or be shut
down forever.

The two-decade presence of Indorayon's pulp and fiber factory,
which has a capacity to produce 240,000 metric tons of pulp in
addition to 60,000 tons of rayon fiber a year, has led to
mounting criticism and pressure from local people and many non-
governmental organizations.

Former President B.J. Habibie decided in 1998, to suspend the
company's operations following prolonged protests from local
residents for alleged environmental damages.

He ordered an independent audit, but it was only recently that
the audit was completed.

The foreign shareholders of Indorayon, who jointly own 86
percent of Indorayon, threatened late last month to file suit
with the International Center for the Settlement of Foreign
Investment Disputes in Washington D.C. against the Indonesian
government for its unlawful closure of the operation.

"Obviously, the shareholders' threat has successfully scared
the government and it thus decided to allow Indorayon to reopen
its pulp plant," Mas Achmad said, adding that several
environmental organizations planned to sue Indorayon for damaging
the environment.

Indorayon, a unit of local conglomerate Raja Garuda Mas Group,
is listed on the Jakarta Stock Exchange and is also traded in the
United States through American depository receipts.

The company said its inability to operate for the last two
years had resulted in a sharp drop in its market capitalization
value from about US$1.4 billion in 1996 to only around $40
million at present.

Indorayon has continued paying more than 6,000 employees
despite the production stoppage beginning in late 1998 and as a
result booked a total loss of $95.18 million last year, up from a
deficit of $46.2 million the year before. (cst)