House commission demands review of Guthrie deal
House commission demands review of Guthrie deal
JAKARTA (JP): A commission of the House of Representatives has
urged the government to revise the sale of 24 palm oil estates to
Malaysia's Kumpulan Guthrie Bhd. in view of claims by local
farmers that they were not properly compensated for their land.
Benny Pasaribu, who chairs the commission overseeing state
finances, said on Thursday the US$350 million deal between the
Indonesian Bank Restructuring Agency (IBRA) and Guthrie Bhd. was
shrouded by irregularities.
The deal, signed in November, allowed Guthrie to take over
24 palm oil estates -- covering 260,000 hectares in Sumatra,
Kalimantan and Sulawesi -- formerly owned by the Salim Group.
IBRA took possession of the estates as collateral for massive
debts Salim owed to the government.
Many farmers, who felt that they had been cheated or forced
into selling their land to the Salim Group, are now pressing the
new owners to give them better compensation. Others even claim
that the amount of land procured is still being disputed.
Analysts pointed out that the hectarage involved in the deal
violated the 100,000 hectare maximum limit that a company can
possess nationwide under a 1999 regulation of the Ministry of
Forestry and Plantations.
Many politicians have since traveled to Riau to support the
farmers' demands.
"IBRA must revise the deal to comply with demands from all
parties involved," Benny said, warning of serious disturbances
unless the government complied.
Finance Minister Prijadi Praptosuhardjo said last week that
the government had signed the first of two parts of the sale.
Benny said IBRA should not only pursue financial targets to
meet the time limit set by the government. Social and political
factors should also be taken into consideration, he added.
If the deal is finalized without revisions, Guthrie will face
opposition, including the possibility of farmers occupying the
plantations, he said.
IBRA should revise the sale immediately because any further
delay will damage plants and risk even bigger losses, he said.
"Without proper cultivation, the oil palm plants will die
after six months," he said.
Benny said IBRA has been spending Rp 50 billion a month to pay
the salaries of plantation employees.
Separately, Guthrie chief executive Abdul Khalid Ibrahim told
reporters in Kuala Lumpur on Wednesday that his company would not
renegotiate the deal.
"Neither IBRA nor Guthrie are looking at the opposition as a
deterrent to progress that can derail the deal," he was quoted by
Reuters as saying.
However, Guthrie will resolve a number of "technical matters"
even after it closes the deal, Khalid said, adding that it felt
confident handling sensitive issues, including issues involving
the community and land, due to its overseas investment
experience. (03)