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) 1