Police to act against planned seizure of assets

Nana Rukmana, The Jakarta Post, Indramayu, West Java

Threats by the Indramayu regent and Indramayu regency legislative council to seal and seize assets belonging to the state oil and gas company Pertamina here following its giant processing subsidiary's negligence to pay taxes to the local administration have received a strong reaction by the police.

The Cirebon Police and the Indramayu Regency Police sent strong signals on Monday that they would not tolerate such coercion by the local administration.

"We'll take firm action against any forceful attempts that will interrupt the operational activities of vital facilities here, including the Balongan oil refinery," Cirebon Regional Police chief Sr. Comr. Sunaryono told a media conference, accompanied by Indramayu Police chief Adj. Sr. Comr. Eko Hadi Sutedjo.

The Cirebon Regional Police supervises the Cirebon City Police, the Cirebon Regency Police, the Majalengka Regency Police, the Kuningan Regency Police and the Indramayu Regency Police.

Sunaryono's statement was an immediate response to a recent threat by Indramayu regent Irianto M.S. Syafiuddin that he would order the closure and seizure of Pertamina's assets in Indramayu, if the latter failed to immediately pay the taxes due. The regent has won the support of the local legislature.

The police chief said he had ordered troops from the police's Mobile Brigade (Brimob) to help the local police protect the assets.

Meanwhile, officer Eko Hadi Sutedjo said the police would continue to attempt to bring Pertamina and the Indramayu administration to a meeting to settle the dispute.

"Hopefully, the two parties will be able to understand each other's position and avoid committing destructive acts," he said.

The warning was officially delivered by the Indramayu regent in his letter No: 973/1075/DPLH on May 26, giving Pertamina 21 days to pay tax on the oil it processed and distributed to Jakarta and West Java. The regent did not specify the amount that Pertamina owed to the regency.

Processing about 51,000 barrels per day, the Balongan refinery is the main supplier for Jakarta and parts of West Java.

The regent has repeatedly argued that the obligation to pay the taxes is stipulated in Bylaw No. 25/2002, which requires all mining companies, including the Balongan factory, to pay tax to the local administration.

The bylaw stipulates that Pertamina has to pay Rp 10 (U.S. 0.001 cents) for every liter of oil and Rp 5 for every one kilogram of gas it processes and distributes.

But, the bylaw has been declared by Minister of Home Affairs Hari Sabarno as unlawful as it goes against another regulation, Law No. 8/1971 on Pertamina.

The minister issued a letter No: 188.3447/135/SJ on Jan. 22, 2003, which ordered the cancellation of the bylaw. The letter was later upheld by a ministerial decree No: 13/2003, which nullifies the bylaw.

Pertamina spokesman for the Balongan refinery Suwandi told reporters that his office had repeatedly told the Indramayu regent that he had lost the right to demand the payment of tax from the company.

"We've repeatedly told him that our company here is only a subsidiary of the one in Jakarta. If he insists on demanding the payment, he should ask for it from our head office," he said.

Suwandi also said Pertamina would comply with Law No. 8/1971 on Pertamina until another was passed in 2005.

"Pertamina was established to support the government and everything, including taxes, has been set out in the law and, therefore, the Indramayu administration should also respect the law," he said.