Semen Padang strongly urged to fork out compensation

Kasparman, The Jakarta Post, Padang

Residents of West Sumatra's subdistrict of Lubuk Kilangan where state-owned cement factory PT Semen Padang stands, have renewed their demand that Semen Padang not only pay compensation for 412 hectares of their communal land but also share a small part of its income to promote social development programs in the subdistrict.

Syamsyair Datuk Pamuncak, chief of the Lubuk Kilangan subdistrict, said that out of respect for communal rights guaranteed by the Constitution and by law, the government and Semen Padang should pay compensation for the communal land appropriated for the company's operation.

"We have not received any compensation, either from the former Dutch colonial administration or the Indonesian government, for the land where the company stands and extracts its raw materials for the cement products.

"We have the pride of having a giant factory but most of us cannot enjoy it as most locals are still living in poor conditions," he told The Jakarta Post at his house on Friday.

He said community and religious leaders in the subdistrict had agreed in a recent meeting that besides paying compensation for the land, the company should also pay Rp 5 for every kilogram of cement it produces to help social development programs in the subdistrict.

"We also demand the government give a seat in the company's board of commissioners for the subdistrict as a sign of the commitment between the local people and the government to maintain the company's operation," he said.

Pamuncak said his was considering filing a lawsuit against the company and the central government to seek justice for the Lubuk Kilangan community whose land was appropriated for the cement factory.

Zainal One, a community leader in the subdistrict, was surprised by the prolonged dispute over the company's status, saying the local people were not concerned whether the company would be spun off from holding company PT Semen Gresik or controlled by Mexican cement company Cemex SA de CV.

"More importantly the company must be managed professionally to support the national development program. The more professional the company management, the more it will contribute to the local people and the government," he said.

He pointed out that most people in the subdistrict were of the same opinion that the government should sell some 30 percent to 40 percent of its shares to Cemex to allow both sides to join forces to manage the company professionally and to eradicate the alleged rampant corruption and collusion within the company.

Semen Padang was established by NV Nederlandsch Indische Portland Cement in 1910 and was later taken over by the Indonesian government. In 1995, PT Semen Gresik acquired Semen Padang and PT Semen Tonasa in South Sulawesi.

Last year, the West Sumatran people demanded the company be spun off from Gresik to prevent the government from selling it to Cemex.

Zaharman, coordinator of Care for Padang Community Forum, called on the central government to go ahead with its plan to reshuffle the company's management and revamp the working system in an attempt to curb corruption in the company.

"Only with the planned reshuffle, the government will be able to improve the company's performance," he said.