PT Newmont responds

PT Newmont responds

The editorial page of The Jakarta Post has often been a forum
for the debate of important issues involving the development of
democracy in Indonesia. I believe that no issue is of more
importance to the future of nation than the process of
decentralization, and Donna Woodward, as usual, has been at the
forefront of critically examining the issue and some of its more
troubling aspects.

Donna's article entitled Newmont: Tax peace at any price? (the
Post, April 24, 2000), was a provocative article with some very
important questions. The only problem with the article, however,
was the presumption of Newmont's guilt that was based on a
misunderstanding or lack of knowledge of the terms of the
settlement between Newmont and the Regent of Minahasa regency.

I do not blame Donna for misunderstanding the agreement; the
reporting of the terms by the major media was not entirely
accurate. Although widely reported as such, the community
development funds and our regional sustainable development
programs were not a part of the settlement of the tax dispute.

The tax dispute between Newmont and the Regent was settled
only on the virtue of the payment of Mineral C taxes on materials
that were used by the company for community development projects
on which we had not yet paid Mineral C taxes. These materials
were identified in a materials audit performed by the Ministry of
Mines and Energy in conjunction with representatives from the
Regent's office and the company. The total dollar amount for the
payment of the taxes and the associated penalties for late
payment is around US$500,000.

From the company's perspective, the most important part of the
deal was that the Regent dropped his claim that Mineral C taxes
could be levied on the company's overburden, or the materials
that cover the economic ore below. The dropping of this claim
constitutes an acknowledgement that the Contract of Work as a
guide for mining investment is still intact and cannot be
tinkered with by the regional governments.

For clarification's sake, the "new" Yayasan (foundation) for
sustainable development that was reported to be a part of the
settlement has been on the drawing boards as a part of our
closure plan for over a year. It has been modeled after a similar
Yayasan that we have already successfully implemented at our mine
site in Western Sumbawa. The plan to form the Yayasan was
included in the budget cycle of 1999 and has nothing to do with
the settlement of this case; nor do our ongoing community
development programs. The Yayasan or the monies that fund them
will be controlled by the Regent or the regional government.

In keeping with Newmont's desire to engage and involve as many
local interested parties as possible the Regent will nominate one
person to sit on the board of the regional development Yayasan
along with representatives of the local communities, non-
governmental organizations, company representatives and members
of the Councillors. Our goal is to maintain the highest levels of
transparency and honesty during the implementation of this
important legacy of our operation.

Donna's invitation to us to disclose the facts has been taken
up. We'd like to issue our own invitation to Donna, and that is
to join us at the table as an observer when we're implementing
our new Yayasan so that she can see with her own eyes how Newmont
works.

At any rate, we appreciate Donna Woodward's interest in our
case, and know that if she were armed with the full details of
the terms of the settlement, that she would feel quite
differently about the ramifications of what occurred. For Donna's
future reference, as well as anyone else who is interested in
learning more about Newmont, our Public Affairs Department in
Jakarta is available to answer any questions or to provide any
information requested about the company. The number is 572-1354,
ext.44011.

RICHARD B. NESS

President Director

PT Newmont Minahasa Raya

Jakarta