IMA urges lawmakers to amend forestry law

Rendi A. Witular, The Jakarta Post, Jakarta

The Indonesian Mining Association (IMA) has urged the House of Representatives and the government to continue with plans to amend the forestry law to boost investment in the mining sector.

IMA chairman BN Wahju told The Jakarta Post on Tuesday the law had prompted some mining companies to hold off their investments.

He acknowledged that the association had lobbied the Ministry of Energy and Mineral Resources to push lawmakers to revise the law, which bans open-pit mining in protected forest.

Some 22 mining companies had been awarded mining contracts from the government and had made investments before the law was put into effect in 1999.

"The law is inapplicable, it only hurt investor confidence. Our main point is that the government should honor the contracts they made with mining investors," said Wahju.

Many mining companies that invested millions of dollars for exploration activities prior to the issuance of the law were infuriated when the government stopped their operations in areas later designated as protected forests.

Wahju said the banning of open-pit mining was unacceptable because other methods could not be used in certain mining activities, such as coal and nickel mining operations.

As an example, he said that closed-pit or underground mining could cause an avalanche.

However, chairman of non-governmental organization Mining Advocacy Network (JATAM) Chalid Muhammad challenged Wahju's argument, saying that banning open-pit mining in protected forests was crucial to save the country's natural forest resources and protect the environment.

Chalid said that the reason mining companies preferred open- pit mining was because it enabled them to greatly minimize their investment costs.

He also said that mining companies had not shown any goodwill to protect the forest and the local environment.

He said that there should be a law forcing mining firms to be responsible for restoring the condition of the forest.

However, Wahju added that mining companies should not be solely blamed for accelerating the deforestation process as the sector only occupied a small area of forest compared to those controlled by timber concessionaires.

On concern over the negative environmental impact of open-pit mining, he said that mining companies had prepared measures to prevent toxic materials from damaging the environment.