Indorayon to improve ties with locals
JAKARTA (JP): Publicly listed pulp and fiber rayon firm PT Inti Indorayon Utama pledged to fulfill the local community's aspirations and other social and environmental aspects in its future mills operations.
"The company and its investors acknowledged the need for a trusting relationship with the local community so that Indorayon can continue its operations in harmony with the environment and in partnership with the local community so that all will benefit," a company statement received on Thursday said.
It said it was committed to ensure that on recommencing operations, the business would be conducted in an environmentally and socially friendly manner in compliance with the laws of Indonesia.
Indorayon said it would seek to be a "good corporate citizen" and ensure good social relations with surrounding communities.
Indorayon is currently preparing to reopen its controversial pulp mill in Porsea, North Sumatra, following the Cabinet's decision in May to allow it to reopen the mill for a minimum one- year period.
Discussion with local communities to seek a mutual resolution prior to the actual recommencing of the mill's operations is still active, the company said.
Local students, community groups and NGOs have continued expressing their opposition to the government's decision to allow Indorayon to reopen the pulp plant.
Indorayon said in response to the demands of the local community, it had agreed to certain principles which it considered essential in indicating its good faith to resolve outstanding grievances and various local aspirations.
The company said priority was given to creating business partnerships in the local community which would take the form of localizing services and supplies where feasible.
"This will also involve activities such as logging operations, the trucking of wood and raw materials into the mills, localizing supplies such as food for the workers," the company said.
It said it agreed to make some changes in its management in conformity with Indonesian law to help facilitate the implementation of the local community's aspirations.
The company also agreed to form a foundation dedicated especially to the development of the local community in line with the latter's needs and aspirations.
The foundation will be funded through the contribution of one percent of the cash costs of production at the Porsea facility and through a contribution by foreign investors in Indorayon.
Indorayon's pulp and fiber factories have been on halt since mid-1998 when the then president B.J. Habibie decided to suspend the plant's operations following prolonged protests from local residents over alleged environmental damages.
The government said in May Indorayon could reopen the pulp mill, but must keep its 60,000 ton capacity fiber plant closed pending an environmental audit to be performed by the government.
The company earlier said the pulp plant was expected to reach its full production capacity of 240,000 metric tons of paper pulp per annum in three months after recommencing operation.
Indorayon is listed on the Jakarta Stock Exchange and the in the United States through American depository receipts. (cst)