Govt allows mining to proceed in protected forests

Govt allows mining to proceed in protected forests

A'an Suryana, The Jakarta Post, Jakarta

The government has agreed to allow mining companies to operate in
areas now categorized as protected forests, a decision that has
drawn strong protests from environmental groups.

Minister of Mineral Resources and Energy Purnomo Yusgiantoro
said on Tuesday that the decision was taken in a bid to boost
investment and increase economic growth.

"The government must attract investment to stimulate the real
sector," Purnomo told reporters on the sidelines of a hearing
with the House of Representatives Commission VIII on mining and
energy.

He claimed that the Ministry of Forestry, which had long been
against calls to allow open-pit mining in protected forests, had
given its approval.

He said the government would propose the House revise Law No.
41/1999 on forestry, which bans open-pit mining in protected
forests.

"The meeting will be held sometime this week," said Purnomo.

The law raised concerns among mining investors as it was
implemented after many had conducted expensive explorations in
areas that were later designated protected forests.

According to the latest data, about 150 companies have been
banned from exploiting their mining sites as they had been deemed
conservation forest areas. The areas, covering 11.4 million
hectares, are mostly located in the eastern part of Indonesia.

Many of these companies belong to multinational mining
companies like Freeport, BHP and Newmont.

One example is PT Gag Nickel which operates a nickel mine on
Gag island in Irian Jaya, believed to hold the world's largest
nickel deposits.

Gag Nickel, jointly owned by BHP Pty Ltd and state-owned
mining firm PT Aneka Tambang, obtained a license to exploit a
mining site located in the forest on Gag Island before the
Government relabeled the site a conservation area.

Purnomo said that only 50 mining companies would be allowed to
resume operations, and a special team would later decide which of
the companies would be eligible.

Meanwhile, non-governmental organization Mining Advocacy
Network (Jatam) strongly criticized the new plan, saying millions
of hectares of protected forest areas, which are home to
endangered wildlife and indigenous tribes, would disappear should
the government allow mining companies to operate in the forests.

"Every year, Indonesia loses 2 million hectares of forest. The
pace of deforestation will increase if the government and the
House allow open-pit mining," Jatam coordinator Chalid Muhammad
told The Jakarta Post.

Chalid said the mining sector was responsible for 10 percent
of the destruction to the country's forests.

But supporters of the government plan said that the rights of
foreign investors who had legally obtained their mining licenses
and had spent billions of dollars in investments must be
protected as well to help instill legal certainty.

They argued that without legal certainty, foreigners would not
invest in the country. And the revival of the mining contracts
was especially important for the economic development of the
eastern part of Indonesia, which has been lagging behind other
areas of the country.

The Ministry of Mineral Resources and Energy has been
campaigning to let the mining companies resume their activities.
The Ministry of Forestry and the Ministry of Environment were the
strongest opponents of the campaign.

But after years of wrangling the Ministry of the Environment
finally surrendered, closely followed by the Ministry of
Forestry.