Review of mining ban in protected forests possible: Minister

Moch. N. Kurniawan, The Jakarta Post, Jakarta

The government is considering reviewing Law No 41/1999 on forestry, which bans open pit mining in protected forests, to help lure investors, particularly in the mining sector, Minister of Forestry Muhammad Prakosa said on Tuesday.

"It's possible to review the law. We are open to discussing it," Prakosa said at a workshop on the country's mining policy.

He said his office would first scrutinize the law before deciding whether to revamp it or not.

At present, Prakosa said, the government preferred to establish a special team to resolve the problems faced by mining companies that had obtained mining licenses in protected forests prior to the enactment of the law.

The team was established in coordination with the Ministry of Energy and Mineral Resources and the State Ministry for Environment, he added.

Law No. 41/1999, particularly the clause regarding the ban on open pit mining in protected forests, has been seen as one factor discouraging new investment in Indonesia's mining sector as some 60 percent of the country's mining resources are located in forest areas.

According to the latest data, about 150 companies have been banned from exploiting their mining sites as they had been relabelled as conservation forest areas.

Prakosa said that the special team would immediately start examining three big cases including the nickel mining operation of PT Gag Nickel on Gag Island in Irian Jaya, and the case involving a gold mining company PT Citra Palu Minerals in Central Sulawesi.

Gag Nickel had obtained a license to exploit a mining site located in the forest on Gag Island prior to the enactment of Law No. 41/1999. But the government later redesignated the forest as protected.

Gag Nickel is jointly owned by BHP Pty Ltd and local mining firm PT Aneka Tambang.

Citra Palu is 90 percent owned by Anglo-Australian Rio Tinto and the remaining 10 percent by local firm PT Arlia Karyamaska.

Paul L. Coutrier, executive director of the Indonesian Mining Association (IMA) said that the IMA supported the plan to revise the forestry law to provide legal certainty to investors.

Coutrier said that the IMA also welcomed the government's decision to establish a special team to determine the best solution for the 150 cases involving mining companies affected by the enactment of Law No. 41/1999.

"This is good while we wait for the revision plan to go through," he said.

Meanwhile, State Minister for Environment Nabiel Makarim said that he would object to any plan to allow mining companies to operate in protected forests.

"We must be strict on these cases because mining operations in conservation forest areas will only destroy the forests," he said.