House finally approves new mining contracts
JAKARTA (JP): The House of Representatives has finally approved the drafts of the controversial seventh generation contracts of work (COWs) to prospect and develop mineral resources in the country, a legislator said yesterday.
Iskandar Mandji of Golkar, said that Commission VI, which is responsible for assessing the contracts, would pass the contracts without any changes.
"We have approved the contracts but we recommend the government further examine the applicants to prevent a scam," Mandji told The Jakarta Post yesterday.
According to the existing law, all mining contracts should gain House endorsement before being passed to President Soeharto for final approval.
The seventh generation COWs, the latest series of contracts to prospect and develop mineral resources, have sparked controversy after newspapers reported that members of Commission VI had received "illegal funds" from the contract applicants to smooth the deliberation process.
Commission VI for industry, mining, manpower and investment has delayed the COWs deliberation in protest of the bribery charge.
The commission and the Ministry of Mines and Energy denied the reports.
Mandji said commission members approved the draft contracts even though several companies had applied for "so many concessions".
"Do they really want to develop the concession they applied for or do they just want to sell the concessions to others later? Many people are making money from selling mining concessions," said Mandji, a commission member.
"That's why we want the government to further check applicants," he said, adding that giving mining concessions of up to two million hectares to a company was too much.
According to the Ministry of Mines and Energy, companies which applied for concession areas up to two million hectares include Canada's Yamana Resources Inc. (11 concessions covering 2.1 million hectares) and Canada's International Pursuit (eight concessions of 2.8 million hectares). They both prospect for gold in various areas throughout the country.
The commission also found another Canadian company applying for 13 concessions covering areas of more than two million hectares in Kalimantan using different names like Batec, Catec, Datec, Eatec, Fatec, Gatec, Hatec, Katec, Matec, Natec, Patec and Qatec.
"We don't know why it uses different names. We hope there is no bad intention behind it," said Mandji.
A total 171 companies have applied for seventh generation COWs but 32 of them recently withdrew their applications.
Mandji said the commission in its recommendation also urged the government to improve the shareholding of local companies in mineral projects, which are now mostly owned by foreign mining companies.
Minister of Mines and Energy I.B. Sudjana earlier proposed a change in the draft COWs to allow the government to have a stake in all mining ventures.
But Sudjana withdrew his proposal following opposition from the applicants and mining experts, saying the proposal did not make sense. (jsk)