Investors urged to seek military help

Investors urged to seek military help

JAKARTA (JP): Minister of Defense Juwono Sudarsono encouraged
mining investors on Tuesday to cooperate with the military and
the police in ensuring the safety of their businesses amid
widespread security instability in the country.

Juwono said that the cooperation between security forces and
investors was necessary because the government could not work
alone to deal with the growing security problem in the country,
due to the lack of funds.

"At present, I cannot guarantee the safety of investors," he
told reporters in a press meeting following his presentation at
the Jakarta International Energy Conference 2000.

Juwono said that such cooperation might take different forms,
depending on the various security situations and conditions. He
cited the example of giant gold mining company PT Freeport
Indonesia, which was cooperating with the army in transporting
security personnel in areas surrounding its mining site in Irian
Jaya.

However, he warned that the use of security personnel against
civilians should be kept at minimum and should be avoided when
possible.

Disputes between mining companies and local residents and
workers are escalating. The mining firms have often been forced
to close their operations due the lack of security guarantees
from the local government.

Juwono said he understood the need to provide an immediate
solution to handle the security problem. But he said that it
would take years to regain stability in Indonesia which has been
racked for the past two years by political turmoil and communal
bloodshed.

At present, he said, the country's police force was lacking in
modern equipment and personnel to adequately protect companies'
plants.

According to him, it would take about 10 to 15 years to bring
the ratio of police personnel to civilians to the ideal level of
one police officer to every 400 civilians as commonly adopted by
developed nations.

On the other hand, he said, the government must also improve
the welfare of the Army and the police.

He said that current members of the Army or the police force
were prone to join illegal activities, which sometimes offered
higher earnings than their salaries.

Juwono was commenting on reports of army officers who backed
illegal coal mining activities, thereby becoming part of the
security problem foreign investors are facing in East and South
Kalimantan.

Since the downfall of former president Soeharto in May 1998,
law enforcement has deteriorated, causing many mining companies
to face security problems with locals or company workers.

Locals often feel that the presence of foreign mining
companies, exploiting their natural resources, are of little
benefit to them.

They increasingly resort to extreme measures such as blocking
roads to the companies' mining sites.

The latest example being PT Kaltim Prima Coal (KPC), which
stopped operating after about 60 striking workers occupied
important mining facilities.

The company has faced losses of about US$1.4 million a day
since the closure of its operations on June 15, and has declared
force majeure to its coal customers.

Faced with this trend, President Abdurrahman Wahid earlier
ordered the military to protect mining operations.

"I have ordered the mines and energy minister to provide
mining investors with protection," he said in his opening speech
at the conference on Monday evening.

He said that security was a vital factor for continued
investment in this country.

But Minister of Mines and Energy Susilo Bambang Yudhoyono gave
a cautious note, saying that investors should prioritize
negotiations and not rely on the military.

"Negotiations would prevent locals or workers from forcing a
mining company to shut down its operation," Bambang told
reporters on the sidelines of the conference.

He said that the use of force should be the last option, and
only aimed at upholding law enforcement.

Bambang said earlier in a speech to the conference that the
mining and energy sector last year accounted for around 14
percent of Indonesia's gross domestic product and generated about
$10.5 billion or 20 percent of total export earnings.

"In the last fiscal year (1999/2000), tax revenues from the
mine and energy sector accounted for almost 27 percent of total
government receipts," he added.

Bambang said the contribution of the mining and energy sector
to the state budget could be even higher in the current fiscal
year in view of the higher international oil prices. (bkm)