Toba group opposes Indorayon reopening

JAKARTA (JP): The Lake Toba Heritage Foundation denounced the government on Saturday for allowing PT Inti Indorayon Utama (IIU) to resume its pulp making operation in North Sumatra.

The foundation, grouping prominent public figures from the Lake Toba area, warned of chaos and security disruption in the area unless the government reversed its decision.

"The resumption of IIU's operation will clearly lead to chaos in the Toba Samosir area in particular, and in North Sumatra in general," the foundation said in a statement.

The chaos will certainly bring countless damages that would be counterproductive to current government efforts in wooing foreign investors to Indonesia, it said.

The government ruled on Wednesday of letting publicly listed IIU resume its pulp making operation but not its rayon production line, which it deemed as the most harmful of the two to the environment.

IIU, which is 86 percent owned by foreign investors through American depository receipts, was forced by the government to close down its entire operation near the Lake Toba area in 1998 following riots between local people and company workers.

The local people claimed that IIU's operation was destroying the environment, a theme echoed by the foundation on Saturday.

In the two years since IIU ceased its operation, the "stinking odors have disappeared, as have the polluting poisonous gasses; gone also are the heavy trucks which once ruled and destroyed the roads and bridges; gone also is the systematic destruction of the forests by IIU", it said.

IIU has insisted that its operations were in compliance with environmental regulations. It has offered to submit its operations for an independent audit.

The foundation refuted the government's announcement that the ruling was a "win-win solution for every one concerned".

The pulp operation would still mean felling trees and destroying forests; logging trucks would continue to destroy hundreds of kilometers of roads and the operation would emit poisonous gasses, it said.

"The income and foreign exchange earnings resulting from the operation will not be comparable to the destruction of the ecosystem, forest, roads and bridges it causes.

"The number of jobs created for around 2,000 people pales in comparison to the approximately 50,000 people it displaces in agriculture, animal husbandry and fisheries," the statement said.

The foundation "strongly urged the government to revoke its decision to allow IIU to resume operating".

It also proposed the establishment of an independent committee to investigate, validate and verify every internal and external transaction, payment and loan made by and to IIU and its subsidiaries.