RI woes Canadian firms despite Busang case

RI woes Canadian firms despite Busang case

MONTREAL (JP): Indonesian and Canadian trade ministers agreed
here over the weekend that the Busang debacle in East Kalimantan
should not disturb trade and investment relations between the two
countries.

Indonesian Minister of Industry and Trade Tunky Ariwibowo and
his Canadian counterpart Arthur Eggleton agreed at a sideline
meeting to the APEC conference to treat the Bre-X Minerals Ltd.
fiasco as an isolated case.

"I don't believe that it would affect relations between
Indonesia and Canada, but I think we both want to get to the
bottom of what happened here and find out all of the details with
respect to Bre-X matter," Eggleton told journalists after the
bilateral meeting Friday.

He said many Canadian mining firms, like Inco, had been
operating in Indonesia for quite a long time and nothing had
happened to them. They even proved to be good citizens of
Indonesia.

Tunky agreed, reaffirming that Indonesia remained open to
Canadian mining companies despite the gold hoax at Bre-X's Busang
property in East Kalimantan.

"We hope it will not affect bilateral economic relations
because the climate for business and trade ties between our two
countries have been very good, excellent," Tunky said.

Tunky and Eggleton were among the 18 trade ministers meeting
here to set the stage for the Asia Pacific Economic Cooperation
(APEC) leaders meeting that Canada will host in Vancouver in
November.

During the bilateral meeting there was no discussion on the
official investigations being carried out by both countries in
connection with possible fraud at Busang.

But Tunky appeared to blame Canadian corporate practices for
any improprieties.

"It is an unfortunate case ... and actually it happened not on
the Indonesian side but on the Canadian side ... It's a corporate
problem, really," Tunky said.

The Busang fiasco rocked the mining world after independent
Canadian consultant Strathcona Mineral Services Ltd. last week
disclosed in its audit report that what Bre-X had claimed to be
the century's largest gold find in Busang was a hoax.

Strathcona said it did not find gold of any commercial value
at Busang and that it had found evidence that test samples from
the Busang property had been falsified and tampered with.

The Indonesian government has frozen the activities of Bre-X
and its related companies in Indonesia but has not banned any
other Canadian firms from operating in the country.

Last month, the government signed 65 sixth generation mining
contracts of work, most of which were controlled by Canadian
firms.

Canadian mining firms also account for the bulk of the 170
applications for the seventh generation contracts of work
currently being processed at the Ministry of Mines and Energy.

Most Canadian newspapers still give more prominence to stories
on the Busang gold debacle than to the proceedings of the APEC
Trade Ministers Meeting here.

The latest reports told of a series of top-executive
resignations from Bre-X, including independent directors
Hugh Lyons and Paul Kavanagh and vice president and chief
financial officer Rolando Francisco.

Bre-X's chief geologist and vice president John Federhof also
resigned earlier Thursday at the company's request.

Bre-X said the departure of Francisco and Federhof, along with
the resignation of Lyons and Kavanagh, had forced the company to
seek court protection.

Meanwhile, the Royal Canadian Mounted Police said it had
formed a team of 10 officers from Alberta, British Columbia,
Ontario and Quebec to investigate the suspected case of gold
fraud. They will work in Canada and Indonesia, a spokeswoman was
reported by The Global and Mail as saying. (rid)

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