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.