Indonesia to stand firm by international contracts
JAKARTA (JP): President Abdurrahman Wahid reassured investors on Monday of Indonesia's firm commitment to honor all of its international contracts, but reiterated the need for renegotiating some that were made in the past.
The President told a news conference that Indonesia would stand firm by its international contracts, including those with independent power producers.
"We want to stand by our international commitments, and this is one of the things I discussed with Malaysian Prime Minister Mahathir Mohamad (last week)," Abdurrahman added.
Abdurrahman commented on a wide variety of issues raised by reporters during the news conference, ranging from former president Soeharto's health, to questions concerning corruption, and the legal quagmire involving the Roche pharmaceutical company.
The President implicitly rejected a recent comment made by finance minister Bambang Sudibyo who said the government would not recompense the Overseas Private Investment Corp's claim of roughly US$290 million.
The claim, paid by OPIC, a U.S. government insurance agency, was made after state electricity company PT PLN failed to pay Calenergy a sum awarded it by an independent arbitration panel.
Last week Abdurrahman endorsed a statement by Minister of Investment and State Enterprises Development Laksamana Sukardi asserting that negotiations with independent power contractors is the official Indonesian government policy.
In response to another question, the President said that Roche pharmaceuticals, a subsidiary of Switzerland's Roche Holding AG, should not be prohibited from producing drugs pending the resolution of its dispute with former distributor, PT Perusahaan Dagang Tempo.
He added that he might, if necessary, intervene by imposing international law on the case, but only if Roche Indonesia continues to be barred from normal production operations.
The South Jakarta District Court ruled late last year in favor of Dagang Tempo and decided to freeze Roche Indonesia's assets, including its factory near Bogor, east of the capital. This despite the fact that Dagang Tempo and Roche had agreed in their contract to settle whatever disputes they might have by means of an arbitration tribunal.
Roche and its lawyers insisted that the district court had no jurisdiction over the case, as it fell under Indonesia's law on arbitration and alternative dispute settlement.
Dagang Tempo filed a lawsuit against Roche last October for annulling a contract appointing the plaintiff as a major distributor of its over-the-counter drugs in Indonesia.
The President also was briefed early last week by Roche's president, Dieter Garbede, and Swiss ambassador, Gerard Fonjallaz, on what Roche's lawyer Todung Mulya Lubis considers a bizarre case, not to mention an unlawful verdict handed down by South Jakarta's District Court.
Abdurrahman told reporters on Monday that he expressed his wish to Swiss Ambassador Fonjallaz that Roche should continue to manufacture all over-the-counter products affected by the dispute.
Mulya ridiculed the court's unlawful handling of the case as more evidence that at present there is a real lack of legal consistency and stability in the nation.
Mulya's concern is that as long as there is such a rampant misuse of Indonesia's legal system, foreign investors will stay away.
Asked about the latest developments in the case of alleged malfeasance regarding the extension of Rp 9 trillion ($1.2 billion) in loans by the state Bank Negara Indonesia (BNI) to the Texmaco Group, the President reaffirmed that individuals (owners and directors) should be separated from institutions (businesses).
"I made it clear from the beginning that Texmaco factories should continue to operate while individuals in the group implicated in the alleged corruption should be prosecuted," he added.
"It is most important that businesses remain protected but that individuals are fairly prosecuted," the President said, adding that he was aware of rumors alleging his own involvement with the group.
Answering another question, Abdurrahman said he no longer had anything to do with the Harawi holding company, which he set up while chairman of the Nahdatul Ulama Islamic organization.
"I no longer own shares in Harawi and am no longer involved in its day-to-day business dealings," the President said.
Abdurrahman also mentioned that Edward Soeryadjaya (his former business partner in the early 1990s) might still use his name in relations with Harawi. "But I must make it fully clear that I am no longer in any way associated with the company."