Rp 55b loans earmarked to curb pollution

JAKARTA (JP): The government has provided Rp 55 billion (US$26 million) in soft loans, derived from the Japan Overseas Economic Cooperation Fund (OECF), which were made available under the pollution abatement equipment program and given to an industrial plant, officials said yesterday.

Deputy Director of the Environmental Impact Management Agency (Bapedal) Nabiel Makarim, declined to identify the recipient but hinted that it has been "badly polluting the air and affecting people's heath for a long time".

Accompanied by Soeprobo Soetojo from Bank Indonesia, he told a press conference that the polluting plant was one of the 20 companies which have been granted a total of Rp 118.8 billion in soft loans for the purchase of pollution control equipment since 1993.

The loan was derived from OECF, which has allocated no less than 16.2 billion yen (Rp 255 billion) in revolving funds. Most of the funds, amounting to 12.6 billion yen, are to support the pollution abatement equipment program. The rest is for the development of small scale industries and technical cooperation.

Nabiel said that Bapedal, which has the authority for technical evaluations and monitoring of the loans, agreed to provide the Rp 55 billion soft loan to the company for "strategic considerations."

He said that the enormous loan was granted to the polluter "for the sake of the health of the people.

Pressed why the government declined to mention the name and location of the recipient, Soeprobo, the deputy head of Bank Indonesia's department in charge of credit for small scale industries and cooperatives, said: "It is a matter confidence, we can't give you the name of our creditors,".

Soeprobo said that there was no clause in the agreement between the two governments specifying the limit of the loans to be provided for the companies which need them.

The interest for the soft loans is only 10.3 percent a year compared to the 19 percent interest in the market.

In the 1993/1994 fiscal year the government provided soft loans amounting to Rp 60.8 billion for four of 11 companies which applied for the credit. There were 50 companies asking for the credit in the period of 1 April 1994 to Nov. 30, but only 16 of them were granted the loans, Nabiel said.

He said that they received a total of Rp 57.9 billion. The target for the 1994/1995 fiscal year was Rp 140 billion, much bigger than the target of the previous fiscal year, which was only Rp 60 billion.

The creditors are to return the loans within three to 20 years.

The government provides the loans through Bapedal and Bank Indonesia, in cooperation with appointed handling banks.

An executive of Lippo City real estate company said that the firm received Rp 2.5 billion soft loans for the water treatment project with a capacity of 10,000 tons of water a day in its newly-developed area west of the city.

PT Leces, a state-owned paper company, required Rp 15 billion to improve its waste treatment units, according to its research and development director Made Dastri.

Today, the company disposes of all of its solid and liquid waste. With the new equipment, it would reduce the solid waste up to 60 percent and the liquid waste up to 40 percent. Made said the company also hoped to save on energy by 30 percent, reduce emissions and recycle the waste.

Since 1989, Bank Indonesia has required all banks in the country to take environmental aspects into account when approving operation and investment credit applications, according to Soeprobo.

"The rule is still effective," he said.

According to the executive director of the Indonesian Center for Environmental Law Mas Achmad Santosa, the requirement was waived in 1991. (sim)