Government won't cancel deal with KL firm despite protest
JAKARTA (JP): The Indonesian Bank Restructuring Agency (IBRA) will not cancel the recent sale of 25 oil palm plantations to Malaysia's Kumpulan Guthrie Bhd despite protest from local farmers and politicians, said a senior official at the agency.
IBRA deputy chairman Mahmuddin Yasin stressed on Tuesday that the transaction had been conducted in a transparent manner according to international standards.
Mahmuddin also said the sale was part of the committment made by the government to the International Monetary Fund as stipulated in its letter of intent to the fund, and the proceeds had been used to help finance the 2000 state budget deficit.
"Canceling the sale will have serious consequences," he told The Jakarta Post in a brief interview.
IBRA, a unit of the finance ministry, sold last November the plantations, which were previously owned by the Salim Group, to Kumpulan Guthrie for US$350 million (Rp 3.6 trillion).
The sale had helped the agency meet its target of raising at least Rp 19 trillion in cash to help finance the state budget.
IBRA plans to sell more assets under its management this year to raise some Rp 27 trillion in cash.
The Salim Group, once the country's largest conglomerate, surrendered its ownership in over 100 companies to IBRA to repay its Rp 52 trillion debt to the government.
The plantations, covering 260,000 hectares, are located in several provinces in Sumatra, Kalimantan and Sulawesi.
Local farmers and several legislators in Jakarta had called on the government to cancel the sale amid claims that part of the land belongs to the local people. Some have also claimed that the transaction had not been conducted transparently.
Malaysia's International Trade and Industry Minister Rafidah Aziz is scheduled to visit Jakarta in March to discuss, among others, the problems faced by Malaysian plantation companies here.
Reports said Rafidah hoped the government of Indonesia would stand firm on the sale of the Salim Group plantations to Guthrie.
Rafidah also wanted firmer action by Jakarta to protect Malaysian plantation companies operating in Indonesia amid reports of locals seizing large tracks of plantation land.
Separately, director general of plantations Agus Pakpahan vowed on Tuesday to seek a solution to the problems faced by Malaysian plantation companies here.
Agus told the Post he would arrange next week a meeting with the association of Malaysian plantation companies to discuss ways on how to solve the problem.
"We need to discuss the latest developments with them (Malaysian plantation companies," he said.
Agus said illegal "land-grabbing" of plantation land belonging to state-owned companies and private companies by locals claiming ownership of the land had been occurring for the past two years.
He acknowledged that the regional autonomy "euphoria" had further intensified illegal annexation of land.
The regional autonomy policy launched by the government earlier this year grants greater power to provinces and regencies to manage their own economic and social affairs.
Agus said the illegal "land-grabbing" of plantation land was a violation of the property rights of investors. (rei/03)