Growth and environment

Growth and environment

The House of Representatives appeared to ease its outright
opposition to the government's proposal that 50 foreign
companies, which had invested heavily in their concession areas
in protected forests, be allowed to resume open-pit mining
operations.

The House Mining and Energy Commission said last week it had
set up a special team to review the mining contracts and to set
tougher criteria for selecting mining concessionaires that would
be allowed to resume operations.

The government seemed able to gain some understanding on the
part of the House of Representatives about the enormous damage
which could be inflicted on the mining industry and on the
credibility of the government itself, as well as the potentially
huge loss of jobs, taxes and royalty revenues if all the mining
concessions were closed down.

The House was apparently swayed by the government's argument
that entirely shutting down the mining operations could also lead
the state into messy litigations involving billions of dollars in
damages because it was, in the first place, the mistake of the
government in awarding the concessions in those areas, which were
later designated as protected forests.

We, nonetheless, strongly dispute the government claim that
the areas where the 50 mining concessions are located had been
designated as protected forests only after Law No. 41/1999 on
Forestry had been enacted.

Even before this law was enacted, the government had ratified
Law No.5/1990 on Biodiversity and Ecosystems that bans commercial
operations in protected forests, national parks and conservation
areas.

Moreover, the government had designated 330 national parks,
conservation areas and wild-life preserves covering 19 million
hectares (ha) and 30 million ha of protected forests as early as
1990.

We also wonder what happened to the National Biodiversity
Action Plan and the National Tropical Forest Action Plan which
were made in the early 1990s partly under international pressure
on Indonesia to protect what environmentalists claimed was the
world's richest diversity of plant and animal species, ecosystems
and genetic resources.

It is nevertheless futile now to debate the flaws of the
procedures for the granting of the mining concessions. Attention
should now focus on a solution that would minimize the potential
damage, which the government has warned of, but also would exact
the least cost to the environment.

After all, our reckless management, as a result of ignorance
and greed, has so far destroyed an estimated 45 million ha of our
120 million hectares of forests.

The government does have a valid point in its argument that
the sanctity of a contract should be honored, otherwise our
economy would be in total chaos, and the country that is now so
desperate for new investment would become a pariah among
investors.

True, mining is now theoretically one of the most promising
businesses in the crisis-ridden country, especially in the least-
developed eastern provinces, and has multiple benefits for the
whole economy and consequently the people.

However, a rapidly growing economy and high per capita income
would be worthless if people lived in a severely damaged
environment that would cause much human misery.

There must be a middle ground. Technological developments
should have advanced enough to allow for a balanced use of forest
resources, reconciling the productive use of forests with the
maintenance of their environmental value. After all, forest
policies, to be effective and enforceable, should be based on the
aspirations and needs of the people they most directly effect.

It is this objective, we think, that should be the top
priority for the House special team in setting the criteria for
selecting which of the 50 mining concessions will be allowed to
continue operations.

The special team should, however, be assisted by an
independent team of experts from various disciplines in assessing
the concessions, case by case, location by location, to make the
selection process credible and to ensure that the few, which
would be allowed to continue operations, are really capable of
undertaking good forest management practices.

Certainly, strict environmental standards would qualify only a
few of the 50 mining concessions for resuming operations, and
there is always the risk that the investors who would have their
concessions revoked, would go to international arbitration to
claim compensation for broken contracts.

But as long as the review and selection process is credible,
let us fight them. Since the global community benefits from the
biodiversity and climate-regulating role of our tropical forests,
we are confident that judges in international arbitrations would
support our firm action to correct our mistakes.