Occupation of Bintan estate starts to scare off investors

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)