Police to act against planned seizure of assets

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.