New team set up to settle mining concession disputes

New team set up to settle mining concession disputes

A'an Suryana, The Jakarta Post, Jakarta

The Indonesian government established a joint team on Thursday
to seek solutions to problems faced by 22 mining companies that
cannot continue their operations due to a law that bans open-pit
mining in protected forests.

The joint interdepartmental team, established by President
Megawati Soekarnoputri during a Cabinet meeting on Thursday, was
given three months to resolve the problems, said Minister of
Energy and Mineral Resources Purnomo Yusgiantoro.

Purnomo said the team, which comes under the auspices of the
Coordinating Minister for the Economy, would meet with each of
the 22 mining companies.

"We hope to find solutions in three months," Purnomo told The
Jakarta Post at his office.

The formation of the joint ministerial team came after the
Ministry of Energy and Mineral Resources and the Ministry of
Forestry failed to bridge their differences over the issue.

The Ministry of Energy had initially proposed that the 22
mining companies, whose concessions are mostly located in the
eastern part of Indonesia, be allowed to resume their operations.

The Ministry of Forestry, however, rejected the proposal on
the grounds that the concessions were located in protected
forests. Under the 1999 Forestry Law, mining companies are not
allowed to conduct open-pit mining in protected forest areas.

Last year, both ministries brought the dispute to the House of
Representatives for resolution. But, months of discussion in the
House has thus far failed to settle the problem.

Purnomo said the new team would sit down with each of the
mining companies at the negotiating table, and that solutions
would very much depend on the negotiating process.

"Most likely, some companies that started production in 1999
but had to halt their operations due to the forestry law, will be
allowed to resume operations," said Purnomo.

Purnomo asserted that the final outcome must seriously reflect
the government's commitment to respecting the mining contracts
that had been signed both by the government and the mining
companies before 1999.

If the government allowed the 22 mining companies to resume
operations, it would give a positive signal to investors that
Indonesia respected the sanctity of contract, he said.

Purnomo added that if the projects were allowed to start up
again, it would have a good impact on the Indonesian economy
considering that the projects involved large sums of money. The
22 projects were valued at US$12 billion, and could provide
employment for 33,000 workers, he claimed.

However, environmentalists have strongly objected to the
goverment's plan to allow the 22 mining companies to start their
operations, saying the mining industry was one of the main
culprits behind the rapid depletion of Indonesia's forests.