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.