NGO says open-pit mining causes Rp 70t loss a year
<p>NGO says open-pit mining causes Rp 70t loss a year</p><p>Tony Hotland, The Jakarta Post, Jakarta</p><p> The country may lose at least Rp 70 trillion (US$8.7 billion)
annually in environmental costs and declining regional revenue as
a result of the government's recent decision to allow 13 mining
firms to resume operations in protected forests, a non-
governmental organization warns.</p><p>Greenomics Indonesia executive director Elfian Effendi said
that the open-pit mining method used in over 925,000 hectares of
forest would bring much greater losses financially compared to
the tax revenue from the firms.</p><p>"The calculation was based on a benefit transfer approach in
which values of elements of the environment per hectare were
converted into figures. The approach is widely used by many
economic experts across the globe," Elfian said on Thursday.</p><p>Elfian said that the government's move would inflict an
environmental cost of Rp 46.4 trillion at the very least. The
cost is calculated from the economic value of ecosystem services
(water, erosion, soil fertility), biodiversity (animal and plant
species), the environmental cost of rivers destroyed by
deforestation, and the sustainable use of forest (the loss of
non-timber forest products).</p><p>Another Rp 23.1 trillion, Elfian added, was the loss in
regional revenue in the affected areas.</p><p>"The regencies where the firms are located will also lose 56
percent of their current Rp 42 trillion annual revenue due to the
possible poor performance in the agriculture, fisheries, and
trade sectors," he said.</p><p>The total cost, said Elfian, was 70 times bigger than the
revenue generated by the mining sector, which recorded Rp 1.07
trillion last year.</p><p>Furthermore, he said that the country's annual 7.1 percent
national growth that occurred in the period between 1971 and 1984
was actually only 4 percent after the environmental cost was
subtracted.</p><p>"A study by the World Resource Institute in the United States
shows that environmental costs are incurred in the mining, forest
and land-use sector," said Elfian.</p><p>The government issued a regulation in-lieu-of-law last month
to allow 13 mining firms to resume operations in a bid to draw
foreign investment. The firms had to freeze their operations
after the government enacted Law No.41/1999 that banned open-pit
mining.</p><p>Among the firms are PT Freeport Indonesia in Papua, PT Aneka
Tambang Tbk and PT Inco Tbk in Sulawesi, PT Sorikmas Mining in
North Sumatra, and PT Nusa Halmahera Mineral in North Maluku.</p><p>Siddharta Moersjid of PT Freeport Indonesia said that he would
need to discuss the calculated environmental losses and make his
own calculation to be able to give an adequate response.</p><p>"I can't comment because I don't know in detail where and how
they get these figures. I admit that mining activities do have
negative excesses, but we're also taking measures to reduce
them," he told The Jakarta Post.</p><p>He said that his company was exercising the right mining
method and was also replanting grass and bushes to prevent
deforestation.</p>
annually in environmental costs and declining regional revenue as
a result of the government's recent decision to allow 13 mining
firms to resume operations in protected forests, a non-
governmental organization warns.</p><p>Greenomics Indonesia executive director Elfian Effendi said
that the open-pit mining method used in over 925,000 hectares of
forest would bring much greater losses financially compared to
the tax revenue from the firms.</p><p>"The calculation was based on a benefit transfer approach in
which values of elements of the environment per hectare were
converted into figures. The approach is widely used by many
economic experts across the globe," Elfian said on Thursday.</p><p>Elfian said that the government's move would inflict an
environmental cost of Rp 46.4 trillion at the very least. The
cost is calculated from the economic value of ecosystem services
(water, erosion, soil fertility), biodiversity (animal and plant
species), the environmental cost of rivers destroyed by
deforestation, and the sustainable use of forest (the loss of
non-timber forest products).</p><p>Another Rp 23.1 trillion, Elfian added, was the loss in
regional revenue in the affected areas.</p><p>"The regencies where the firms are located will also lose 56
percent of their current Rp 42 trillion annual revenue due to the
possible poor performance in the agriculture, fisheries, and
trade sectors," he said.</p><p>The total cost, said Elfian, was 70 times bigger than the
revenue generated by the mining sector, which recorded Rp 1.07
trillion last year.</p><p>Furthermore, he said that the country's annual 7.1 percent
national growth that occurred in the period between 1971 and 1984
was actually only 4 percent after the environmental cost was
subtracted.</p><p>"A study by the World Resource Institute in the United States
shows that environmental costs are incurred in the mining, forest
and land-use sector," said Elfian.</p><p>The government issued a regulation in-lieu-of-law last month
to allow 13 mining firms to resume operations in a bid to draw
foreign investment. The firms had to freeze their operations
after the government enacted Law No.41/1999 that banned open-pit
mining.</p><p>Among the firms are PT Freeport Indonesia in Papua, PT Aneka
Tambang Tbk and PT Inco Tbk in Sulawesi, PT Sorikmas Mining in
North Sumatra, and PT Nusa Halmahera Mineral in North Maluku.</p><p>Siddharta Moersjid of PT Freeport Indonesia said that he would
need to discuss the calculated environmental losses and make his
own calculation to be able to give an adequate response.</p><p>"I can't comment because I don't know in detail where and how
they get these figures. I admit that mining activities do have
negative excesses, but we're also taking measures to reduce
them," he told The Jakarta Post.</p><p>He said that his company was exercising the right mining
method and was also replanting grass and bushes to prevent
deforestation.</p>