Indorayon mill workers continue with Medan vigil

Indorayon mill workers continue with Medan vigil

JAKARTA (JP): Thousands of PT Inti Indorayon Utama employees,
faced with the threat of losing their jobs next month, entered
their fourth day on Sunday of camping out in the courtyard of the
North Sumatra governor's offices in Medan.

The demonstrators, including management staff, started their
vigil on Thursday as the government remained undecided on the
status of the mills in the North Tapanuli town of Porsea near
Lake Toba, which have been forced to stop production since July
due to security disturbances.

A spokesman for the workers, Nasrun, said on Sunday, "We will
remain here and will bring our families to join our protest until
the government takes firm action to allow our mills to resume
production without physical harassment by some local people."

A member of management, Fatmin Manalu, said that Indorayon's
board of directors had notified the company's 6,000 employees on
the probability of massive layoffs starting next month unless the
mills could return to normal operations, reported Antara.

Contacted in Medan, Indorayon's finance director, David Pile,
confirmed that his company continued paying full wages to all
employees between July and September despite the stoppage of
production.

"But our severely affected cash-flow is forcing us to halve
their pays for this month and, unless the mills reopen soon, we
may have to fire them all next month," Pile added.

Pile said Indorayon had lost about US$20 million a month in
revenues since July after a large group of local protesters
blocked the main public access roads to the mills, disrupting
deliveries of supplies and materials.

Pile could not understand why the government had not been able
to protect Indorayon, which did not breach any laws, from
security disturbances by irresponsible protesters.

Indorayon, which is traded on the Jakarta and Surabaya stock
exchanges, is 62 percent owned by Singapore-registered Asia
Pacific Resources International Holdings Ltd., which is listed on
the New York Stock Exchange.

The other 38 percent of Indorayon is owned by the investing
public, cooperatives and several other shareholders from Finland.

Before the operation suspension, Indorayon exported 70 percent
of its annual production of 240,000 metric tons of hardwood pulp
and 60,000 tons of rayon fiber.

"We do nothing wrong legally and environmentally. Yet, the
government did almost nothing to prevent 100 to 200 people from
acting outside of the law," Pile said.

He recounted that many fact-finding teams, including one sent
especially by President B.J. Habibie, had successively visited
Indorayon after a protest in late June by some local people who
accused the company of polluting Lake Toba.

"But none of the teams, including those assigned by the
ministers of environment, trade and industry and investment
promotion, gave us any clue as to what we have done wrong.

"Our operations have often been environmentally audited. The
last audit, in 1995, covering environmental, safety and health
standards, was conducted by U.S.-based Labat-Anderson Inc., a
leader in environmental compliance regulations, with good
commendations," Pile added.

Pile said that in response to the worsening situation,
Indorayon sent a letter on Friday to North Sumatra Governor T.
Rizal Nurdin and President B.J Habibie expressing shareholders'
concerns over the apparent lack of support from the local
government in protecting the substantial investment of $600
million that has been made by Indorayon in the Porsea facility.

"The company's management also expressed concern over the
negative impact that the closure of its Porsea operation would
have on investment within Indonesia, and in North Sumatra and the
Tapanuli district in particular," Pile added.

He added that Indorayon reached an agreement on Sept. 25 with
the ministers of industry of trade, manpower and the environments
and the North Sumatra governor that "our company's operations
will soon be subjected to an overall audit and that to facilitate
an effective audit, our mills have to be running operations for
at least three to six months".

"But until now, no follow-up measure has been taken," he said,
contending that how could Indorayon pollute Lake Toba because the
mills have relocated to the Asahan River, which is downstream
from the lake. (vin)