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