Indorayon's fate hinges on social, environmental audit
Indorayon's fate hinges on social, environmental audit
JAKARTA (JP): Publicly listed PT Inti Indorayon Utama's pulp
and rayon mills in North Sumatra would have to undergo a social
and environmental audit process before the government determined
their fate, a leading government official said.
Director General of the Ministry of Trade and Industry Gatot
Ibnusantoso said on Friday that although the existing law only
stipulated environmental performance as the criteria for closing
down an industry, the government has decided also to audit
Indorayon's social performance in the region.
"In terms of environmental performance Indorayon may be good,
but if the social performance is poor this is wrong," he told
reporters on the sidelines of the Indonesia Forum conference.
He declined to disclose the criteria for the assessment of the
social performance, pointing out that the criteria for both the
environmental and social performances were still being prepared
by a small government team, which was expected to complete its
work next week.
"It will be something like contributions in developing
education, traditional markets, and other social infrastructure
in the area," he said.
He explained that Indorayon's mills had to be audited because
people living nearby demanded the mills be closed down on
allegations that they had damaged the environment.
"But we can't just close down the mills, we have to audit them
first to determine whether they have in fact damaged the
environment," he said.
The mills were forced to stop production in early July after
local protesters blocked the main access roads to the plants,
thereby disrupting the deliveries of supply.
They, however, resumed operation late last month as they have
to be working for some five weeks before a government-appointed
independent audit team begins work.
Gatot said that the government will select the auditors next
Friday, and the auditing process would start immediately.
After months of audit, the auditors would then provide a
recommendation to the government, but Indorayon would be given a
chance to challenge the result, he said.
He added that the final result would be handed over to the
minister of investment, and the final decision would be in the
hands of President B.J. Habibie because Indorayon was a foreign
investment venture.
Indorayon, which has invested US$600 million in its mills and
timber estates near Lake Toba, is listed on the Jakarta Stock
Exchange. It has an annual production capacity of 240,000 metric
tons of pulp and 60,000 tons of rayon fiber. (rei)