Occupation of Bintan estate starts to scare off investors

JAKARTA (JP): State Minister of Investment and State Enterprises Laksamana Sukardi warned that the occupation of industrial plants such as on Bintan island, Riau, could be harmful to the country's economic recovery.

Laksamana deplored on Wednesday the occupation of a power plant by demonstrators in the Bintan Industrial Estate in Lodam, Bintan island, saying that it was scaring foreign investors.

Speaking to journalists before attending a Cabinet meeting at Bina Graha presidential office, the minister said several Singaporean and Japanese investors told him during his visit to Singapore a few days ago that they would close their companies on the island unless the government was able to stop the protests.

"Do not disturb economic activities, and what's more important is the foreign investors' point of view as they do not know anything about the problems there," he said.

Laksamana said he understood people's dissatisfaction over the low compensation they received in 1991.

He acknowledged that during the New Order regime, military and government officials often intimidated and forced people to sell their land at a very low price.

"Security forces even coerced villagers to accept a low settlement for their land which was also arbitrarily cut by unscrupulous officials," Laksamana said.

However, the minister warned the unjust practices could not be used as a pretext to disrupt economic activities on the island.

Thousands of Bintan residents have occupied a power plant on the Bintan Industrial Estate since Saturday.

Farmers said they deserved much better compensation because they only received Rp 100 for every square meter of the land they sold to investors in 1991. They insisted the fair price should be at least Rp 10,000.

The villagers blocked a key entrance to Bintan Beach International Resort.

The resort is managed and owned by a consortium of the Salim Group, Riau's provincial administration, the Indonesian Navy and a group of Singaporean investors.

Singaporean investors comprise Singapore Technologies Industrial Ltd., the Development Bank of Singapore, Overseas- Chinese Banking Corporation, Overseas Union Bank, UOL Equity Investment, Straits Steamship Ltd., Tropical Resorts and KMP Bincorp Investments.

Bintan's proximity to Singapore makes it especially attractive to investors from the island state.

Goh Song How, the president of SembCorp Parks Management, which manages Bintan Industrial Estate, has threatened to close the industrial park if the government fails to protect it.

"We've put our money in the country and we expect the Indonesian government to protect this investment, or maintain law and order at the very least," he told The Strait Times on Tuesday.

Using petrol bombs, machetes and arrows, protesters checked all vehicles passing through the road outside the resort's main gate.

Dialog

Indonesian Military (TNI) Commander Adm. Widodo A.S. said on Wednesday he had ordered security forces on the island to deal with the issue wisely by facilitating a dialog between villagers and the companies there.

"I have ordered security officers there to help people settle the issue," Widodo said after meeting with President Abdurrahman at Bina Graha presidential office.

Riau Governor Saleh Djasit described the villagers' rally as embarrassing.

But he said that local residents on the island should be given more of a say and be able to participate in the development of the island.

He said he had called on foreign companies on the island, including hotels, to boost the involvement of locals in economic activities.

He said villagers should be given more opportunity to sell raw materials, such as selling their agricultural products to hotels.

"They can train the farmers to provide vegetables, chickens to the companies," the governor said.(prb)