Government won't cancel deal with KL firm despite protest
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)