Govt to amend regional autonomy policy: Purnomo

JAKARTA (JP): Minister of Energy and Mineral Resources Purnomo Yusgiantoro hinted on Friday that the government might have to make some changes to the new regional autonomy policy amid "misuse" by some regional governments.

Purnomo said that many leading foreign investors, particularly in the mining and oil and gas sector, had complained about the poor implementation of the regional autonomy policy.

"If this (problem) continues, foreign investment will not come to Indonesia," he told reporters.

The government launched Law No. 22/1999 on regional autonomy early this year giving regional government, including regencies and mayoralties, greater power in managing their social and economic affairs.

Purnomo, however, did not say clearly whether the government would revise the law or introduce a new government ruling.

Purnomo said that some local administrations had been too aggressive in collecting revenue by imposing new taxes, which not only burdened foreign investors, but also contravened the contract signed with central government in Jakarta.

He said his ministry had received many complaints about this problem from foreign investors, citing gold mining company PT Newmont Minahasa Raya and coal mining company PT Kaltim Prima Coal.

The country's oil and mining industry had also been badly affected by the poor implementation of regional autonomy, experts said.

President Megawati Soekarnoputri, who was the country's vice president when the autonomy policy was launched, has also voiced her criticism several times over the policy, urging immediate measures to evade more abuses from regencies.

Purnomo said that the Ministry of Home Affairs would be responsible for making the changes. He did not provide details.

"There will be pluses and minuses, but we must move forward to pass this transition period," he said.

However, he said, the government would still give regencies the authority to issue operation licenses to mining and oil companies.

Purnomo stressed that the government remained committed to the implementation of regional autonomy to help accelerate local economic development.

"We totally support regional autonomy because we want provinces and regencies to be well developed," he said.

He added that the regional autonomy issue would be one of his five priorities under the new Cabinet of President Megawati Soekarnoputri.

The other four programs were to meet the government target of oil and gas exports, to complete a review of existing laws related to energy and mineral resources, to restructure state- owned enterprises under the ministry such as the state-owned oil and gas company Pertamina and electricity company (PLN) and to establish clean and good governance at the ministry.

Elsewhere, Purnomo expressed his optimism in meeting the government oil and gas export target of Rp 100 trillion (US$10,4 billion) this year amid fears of continuing declining international oil prices.

He said his optimism was attributed to the strong result between January and July, which reached 60 percent of the full- year target.

"I'm upbeat that we can meet or even surpass the target," Purnomo said, adding that demand for oil would remain high this summer as well as winter.

He said the government would also support the Organization of Petroleum Exporting Countries' (OPEC) plan to cut oil production by 1 million barrels per day starting Sept.1 to prop up prices.

Crude oil price future in London were $25.98 per barrel on Friday, compared to $25.57 the previous day.

The government has set the assumption in the State Budget that the average price of crude oil in 2001 will be $24 per barrel.(05)