Govt tries to stop Cemex exit
Govt tries to stop Cemex exit
The Jakarta Post, Jakarta
The government said it will try to prevent Mexican-based
cement giant Cemex SA from leaving the country by offering a
settlement to resolve a protracted dispute over the company's
investment in this country.
"I cannot reveal what option the government will take now,
because it is confidential. For sure, we will try to offer Cemex
a lucrative solution, so that they don't leave the country,"
State Minister of State Enterprises Laksamana Sukardi said on
Wednesday.
Rumors are circulating that Cemex may leave the country after
facing difficulties in carrying out its investment plans.
Laksamana, speaking after a hearing with the House of
Representatives Commission IX for finance, said the country's
image would be tarnished if Cemex decided to pull out.
He added that the government was now in the process of
preparing a team of legal advisors to handle the arbitration case
at Washington-based International Center for Settlement of
Investment Disputes (ICSID), while investigating options for an
out-of-court settlement.
The dispute between the government and Cemex centers on its
being unable to acquire a controlling stake in state-owned PT
Semen Gresik, Indonesia's third largest cement maker.
Cemex acquired a 25.50 percent stake in Gresik in late 1998,
when the government agreed to provide Cemex with an option to
increase its ownership to a maximum 51 percent by 2001.
But efforts by Cemex to acquire a majority stake in Gresik
could not be realized due to strong opposition from Gresik's West
Sumatra-based subsidiary PT Semen Padang and provincial
administration, and the government has thus retained its 51
percent stake in publicly listed Gresik.
After years of trying unsuccessfully to resolve the dispute,
Cemex filed a litigation against the government with ICSID late
last year.
Under ICSID rules, the losing party, besides paying an award
to the winner as determined by the tribunal, must reimburse all
arbitration costs borne by the winning party.