Removal of Indorayon's mill contradicts prior agreements
Removal of Indorayon's mill contradicts prior agreements
SINGAPORE (Dow Jones): The Indonesian government's call for
the relocation of PT Inti Indorayon's mill in North Sumatra
contradicts prior agreements between the company and the
government, Asia Pacific Resources International Holdings Ltd.
(ARH) said Tuesday in a press statement to the New York Stock
Exchange.
Singapore-based Asia Pacific Resources International Holdings
Ltd., or April Group, is listed on the New York Stock Exchange
and owns 62 percent of Indorayon.
The relocation call contradicts an agreement made Sept. 25 to
set up an independent audit committee to study the social,
economic and environmental impact of the mill in Porsea, North
Sumatra, the statement said.
The audit team comprises officials from the environment
ministry, trade and industry ministry, local environmental
groups, non-government organizations and economists.
The Indonesian environment minister Panangian Siregar said
Tuesday in parliament the ministry recommended Inti Indorayon
move its mill from the Porsea area following allegations of
pollution of the surrounding environment over the last 10 years.
The Porsea mill is located downstream from Lake Toba, it said
in the statement.
PT Inti Indorayon hasn't received verbal or written warnings
of environmental license contravention from the Indonesian
government, the statement said.
Since July, the mill's operations have been disrupted by
demonstrations by community members accusing the company of
polluting nearby Lake Toba.
Indorayon's finance director, David Pile, late September said
disruptions to the Porsea mill operations since July have cost
the company nearly $20 million a month in lost revenue.
Indorayon reported a first half net loss of Rp 492.8 billion
rupiah, compared with a net profit of Rp 8.9 billion for the same
period last year.
The Porsea mill has a yearly production capacity of 240,000
metric tons of hardwood pulp and 60,000 tons of rayon fiber.