Indonesia committed to upholding legal certainty, says Kwik

Indonesia committed to upholding legal certainty, says Kwik

JAKARTA (JP): Coordinating Minister for Economy, Finance and
Industry Kwik Kian Gie reiterated on Wednesday that the
government was committed to ensuring legal certainty in the
country despite the clamor from some camps in the bureaucracy for
revising or terminating business contracts made in the past.

Kwik said that enforcing laws and regulations was part of the
governments efforts to create a better investment climate to woo
more foreign investors.

"We know that investors will come to Indonesia only if there
is a legal certainty that will protect their contracts," he told
a group of German businessmen at a gathering.

"We therefore ensure that laws and regulations of business
contracts, including the bankruptcy law, will be enforced
consistently."

Kwik made the statement amid increasing concern among foreign
investors over strong pressures from certain groups for
unilateral termination or revision of business contracts made
with the previous government.

One of the latest cases includes calls from legislators for
the government to revise its contract with the giant gold mining
firm PT Freeport Indonesia copper and gold mining company on
grounds that the contract was allegedly made through corruption
and collusive practices.

Another gold mining firm in North Sulawesi, PT Newmont
Minahasa Raya, was shocked recently by what the company saw as a
questionable verdict issued by the Tondano district court. The
decision required the company to shut down the operation on
grounds that it had failed to pay a local mineral tax.

The company denied the allegations, and Jakarta has also said
that Newmont has not violated any tax regulation.

Kwik said that Indonesia needed foreign investors' money to
help revive the ailing economy.

Asked by reporters whether the dismissal of Gen. Wiranto from
the cabinet would discourage foreign inventors, Kwik said: "There
is neither a negative nor positive impact on the economy from the
(Wiranto's) suspension.

"Investors are more fixed on the economic fundamentals of the
country, which look okay for 2000."

President Abdurrahman Wahid made a surprise move late on
Sunday, suspending the former armed forces commander from the
cabinet following weeks of stand-off and rumors of a possible
military coup.

Wiranto has been implicated by a human rights investigation in
the mass destruction and bloody massacres in the former East
Timor province after the August referendum.

Many analysts welcome Abdurrahman's move, pointing out that
this proves the government's commitment to justice and democracy.

Kwik also said that the government would press ahead with its
bank and corporate restructuring programs.

He pointed out that the recent establishment of the Financial
Sector Policy Committee (FSPC), whose members include four senior
economic ministers under his coordination, would help accelerate
the banking and corporate restructuring programs.

"This committee is now actively overseeing the process of
banking reform and corporate restructuring," he said.

Kwik said that the FSPC was helping the Indonesian Bank
Restructuring Agency (IBRA) to be more flexible and active in the
corporate restructuring process.

He didn't provide details, but said that the government had
issued a ruling that would protect IBRA staffs and FSPC members
from costly litigation as they exercise their authority.

IBRA staff reportedly have been scared of possible litigation
following revelation of the high profile Bank Bali scandal last
year, from which several senior government officials, including
IBRA staff emerged as suspects.

This has been one of the factors causing delays in the
government bank and corporate restructuring programs.

Kwik reaffirmed that the government would accelerate the
disposal of various bank assets held by IBRA.

"The government has proven that it is not a competent banker
or businessman. Therefore we want to return the assets held by
IBRA to the private sector as quickly as possible while
collecting a fair value for the assets," he said.

IBRA currently controls around Rp 600 trillion worth of
various assets surrendered by former bank owners, closed banks,
nationalized banks or recapitalized banks.

"If you combine the assets held by IBRA with state
enterprises, then government now controls 70 percent of
Indonesia's productive business ... this means that we're like a
Communist country," Kwik said.

IBRA is currently planning to immediately sell its 45 percent
stake in auto giant PT Astra International and to launch an
initial public offering of Bank Central Asia (BCA) in a bid to
meet the target of raising Rp 17 trillion for the current state
budget ending in March. The agency has so far collected around
Rp 12 trillion.

The agency is also tasked with raising approximately Rp 16
trillion to help finance the upcoming April-December 2000 state
budget. (rei)