What a difference five years makes. The mining industry, which

What a difference five years makes. The mining industry, which
prospered during the Soeharto administration from the late 1960s
until the authoritarian leader's resignation in 1998, is now
languishing in a mire of new government policies, opposition from
environmentalists and hostility of local communities.
In the first years after Soeharto's downfall, many firms were
forced to suspend operations for many months due the blockage of
their sites by locals, who claimed they were denied a fair share
of mining revenues, most of which went to the central government.
Other firms faced villagers who, claiming rights over mineral
resources in their native lands, conducted illegal mining
activities on the firms' contract areas.
Today, the protests have decreased, but many companies are still
struggling to cope with the illegal miners.
The industry is also caught in the middle in problems arising
from the government's autonomy policy, which gives greater power
to the local governments to manage their own political and
economic affairs.
Several firms have decried the new taxes imposed by local
governments, now enthusiastically searching for new sources of
revenue.
Chairman of the Indonesian Mining Association (IMA) BN Wahyu said
some regions obliged mining companies to pay vehicle taxes on
their heavy equipment, although they were exempted the tax in the
past.
"Vehicle taxes belong to regional administrations. Thus, they
(regional administrations) issued bylaws obliging mining
companies to pay taxes on their heavy equipment as it is
considered as a kind of car," Wahyu said, noting Indonesia's
dubious distinction as the only country in the world to impose
vehicle taxes on mining equipment.
"And the tax is very burdensome because mining heavy equipment is
valued 100 times higher than a car."
Benny said the most serious problem confronting the industry at
present was Forestry Law No. 41/1999, which bans open-pit mining
in protected forests. Mining companies can still operate in
protected forests as long as the mines are developed underground.
Environmentalists, who cite the mining industry as one of the
main culprits behind the rapid depletion of the country's
forests, have championed the law as a prime means to curb
deforestation.
Many mining companies were shocked to find that the law barred
them from proceeding with their activities despite the fact they
made considerable investment and located mineral resources in
their areas.

A total of 22 mining contracts were suspended by the ministry
following the issuance of the law.
The Ministry of Energy and Mineral Resources has sought solutions
for the companies to continue their activities. Thus far, its
efforts have been in vain, with the Ministry of Forestry
insisting the companies cannot work in protected forests.
President Megawati Soekarnoputri recently formed a joint
interdepartmental team to negotiate with each of the 22 mining
companies, with Minister of Energy and Mineral Resources Purnomo
Yusgiantoro promising to find solutions to the protracted dispute
within three months.
"Most likely, some companies that started production in 1999 but
had to halt their operations due to the forestry law will be
allowed to resume operations," Purnomo said.
Chairman of the Mining Advocacy Network (JATAM) Chalid Muhammad
contended that profit was the main reason behind the industry's
opposition to the forestry law, because an open-pit mine is much
cheaper than an underground one to develop.
Chalid insisted that banning open-pit mining activities was
crucial to protect the country's forests.
Although Wahyu agreed that open-pit mines were cheaper to
develop, he denied that profit was the reason behind many mining
companies' insistence on using open-pit mines. In many cases,
mining companies have to remove land surface to find mineral
resources because it is technically impossible to exploit the
resources from an underground tunnel.
He said mining companies should not be the scapegoat for
deforestation as the sector exploited a small area of forest
compared to timber concessionaires.
Citing the Clive Aspinall 2000 report, he said the total land
used for the existing 38 mines amounts to less than 1,350 square
kilometers -- less than 0.1 percent of the country's total land
of 198,000 square kilometers - and represents a smaller area than
that covered by Jakarta and its surrounding suburbs.
In comparison, timber companies have deforested some 66,000
square kilometers, about 33 percent of the country's land mass.
He contended that all multinational mining companies reclaim
their areas and show concern for the environment. The real
culprits, he said, were illegal miners who move on to new areas
without cleaning up the environment.

Table (22 contracts which have been suspended (ada pada rendi)
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