Local residents disappointed in mining companies

JAKARTA (JP): Security conditions have again cast a shadow over the business climate in the country after local residents turned their anger against multinational resource companies operating in Riau and East Kalimantan.

Riau Deputy Governor for People's Welfare Rustam S. Abrus said on Monday dozens of residents of Sintong village, Bangko district in Rokan Hilir regency, Sumatra had been occupying five oil rigs belonging to PT Caltex Pacific Indonesia, a subsidiary of American-based oil firm, since Saturday over disappointment with the company's failure to employ them.

"The resentment came out due to unemployment. The people were angry because Caltex rejected them, so they attacked the company," Rustam said.

He said the company had sparked animosity among local residents due to its preference for outsiders.

However, he regretted the incident, saying that the company, which produced 30,000 barrel per day from the rigs, could suffer big losses.

"Although the company has not yet reported the incident we would help solve the dispute," Rustam was quoted by Antara as saying.

He said his administration is now preparing a bylaw which would oblige foreign companies to employ local residents.

Hundreds of students attacked the company's office and set fire to several vehicles early this year to demand a fairer revenue sharing from oil exploitation in the province. Caltex produces about 800,000 barrel of crude oil, more than half of Indonesia's daily crude oil production.

Meanwhile, spokesman for PT. Caltex Pacific Indonesia Poedyo Oetomo said the company is still negotiating a settlement with the residents.

"It's impossible for the company to employ all local residents," Poedyo remarked.

Separately, East Kalimantan Police denied that 24 residents of Marangkayu district, Kutai regency, were injured when police dispersed residents who blocked an access road to PT Unocal coal mine company in Kutai.

"It's not true. Only three people were injured, and no one was detained," the police spokesman Supt. Faah Sumarno said on Monday.

He said one of the people suffered wounds in his left leg because of a rubber bullet, while the others had minor injuries.

He said the people had committed a crime and endangered public interest.

The police seized four molotov cocktails, and several traditional weapons, including an axe, spears and 14 arrows, from the people during the clash on Sunday, he said.

Meanwhile, Unocal's spokesman Samsulistyo said the company is still negotiating with the residents who demanded compensation over land appropriation.

"We have offered compensation worth Rp 1 billion in community development program. We have agreed about it," Samsulistyo.

The residents, who have blocked the road for almost two weeks, still claim their land was damaged because of the company's operations. (jun)