Indorayon wins backing for controversial mill
Indorayon wins backing for controversial mill
JAKARTA (JP): Pulp and rayon fiber producer PT Indorayon Utama has gained further backing for its controversial plant in the Porsea district, North Sumatra, with chairman of the National Economic Council Emil Salim warning the government on Saturday not to restrict operation of the factory without prior legal process.
Emil said the indiscriminate closure of the factory would taint the image of Indonesia in the eyes of investors and would further discourage foreign investment.
"A legal decision proving the company has caused environmental damage is required to close down Indorayon's factory," Emil was quoted by Antara as saying in the North Sumatra capital of Medan after delivering a speech at a ceremony to install new board members of the Association of the University of North Sumatra's Management School Graduates.
The former minister of environment noted that the government was in the process of trying hard to woo back investors to the country to revitalize the country's economy, which has been battered by the protracted economic crisis.
He said foreign investors were watching whether the new government of Indonesia would deliver on its promise to uphold law enforcement.
"By conducting a legal procedure in dealing with the case of Indorayon's factory, Indonesia will demonstrate to the international world its seriousness in upholding law enforcement," he said.
Emil said the ministries in charge of industry and trade, forestry and plantations, and agriculture had to prove in a court of law that Indorayon was at fault.
With regards to the demand of local people for the closure of the factory, Emil said he hoped the company and the local people could settle their dispute in talks mediated by the local government.
Minister of Environment Sonny Keraf recommended last month that the Indorayon factory be closed, citing the alleged environmental damage caused by the company.
The Porsea factory, which commenced operations in 1989, has a production capacity of 240,000 metric tons of paper pulp in addition to 60,000 tons of rayon fiber a year.
Local non-governmental organizations such as Friends of the Earth Indonesia and the Lake Toba Heritage Foundation supported Sonny's recommendation, saying the decision should have been made years ago.
But several top officials, including Minister of Trade and Industry Jusuf Kalla, State Minister of Investment and State Enterprises Development Laksamana Sukardi as well as Director General of Chemical, Agricultural and Forestry Industries Gatot Ibnusantosa insist that Indorayon could not be shut down without a court decision.
Indorayon's management itself has been calling for the government to hold a meeting to discuss the problem, together with other concerned parties, as a preferred resolution process before bringing the case to court.
President Abdurrahman Wahid promised late last month to find an amicable way to resolve the problem while upholding the rule of law.
Indorayon has been under fire since 1998 when it became the target of demonstrations of residents living near Lake Toba who opposed its operations over alleged improper environmental- protection management, which reportedly resulted in bad odors and polluted water and air.
Environmental organizations have alleged that Indorayon has caused the water level in Lake Toba to decrease and has harmed forests in the area.
Indorayon holds a concession right to 269,060 hectares of pine forest areas in the regencies of Dairi, Simalungun, North Tapanuli and South Tapanuli in North Sumatra.
Indorayon is a unit of the Raja Garuda Mas Group, a diversified conglomerate controlled by local businessman Sukanto Tanoto.
Indorayon has also floated its shares in the United States through American depository receipts. (jsk)