Constitutional Court rules six mining companies still prohibited from open pit mining in protected f

Constitutional Court rules six mining companies still prohibited from open pit mining in protected forests

Press Release 8 July 2005: NGO Forum for Protected Forests (JATAM, WALHI, ICEL, HuMA, ELSAM, YLBHI, LBH Jakarta Pokja PA PSDA, AMAN, TAPAL, MPI)

Jakarta – According to yesterday’s Constitutional Court ruling, of the 13 companies listed in the Presidential decree on mining in protected forests, the six companies which are only at the stage of exploration or feasibility study are still required to adhere to clause 38 (4) of the Forestry Law. The ruling means that these 6 companies (listed below) are still prohibited from open pit mining in protected areas. However, the Constitutional Court declined an Indonesian NGO request to annul the entire Presidential Decree and subsequent amendment to the Forestry Law, ruling that the remaining 7 companies which have already entered the exploitation phase in protected forests may continue with open pit mining.

"This Court concurs with the opinion of expert witness Prof. Dr. Emil Salim ... that the six companies which are still at the stage of exploration or feasability studies, at such time as they enter the exploitation stage must comply with the requirements in Clause 38 (4) of the Forestry Law (41/1999) [which prohibits open pit mining in protected forests] as long as their licences for exploration and exploitation are not a combined licence" (quoted from the conclusions at pp 414-415 of the Judgement of the Constitutional Court).

Under the Indonesian mining law framework, a Contract of Work (CoW) is granted to a mining company to exclude others from mining in a certain area, however a CoW holder only gains a licence for exploitation once their mining plan and Environment Impact Assessment recieves government approval. The practical outcome is that the six companies prohibited from open pit mining in protected forests are those which have not had reached that exploitation stage through submitting a plan and having their EIS approved:

Weda Bay Nickel (Canada), Gag Nickel (BHP Billiton from UK/Australia), Pelsart Tambang Kencana (Australia), Aneka Tambang (Indonesia), Sorikmas Mining (Aberfoyle from Australia), and Interex Sacra Raya (Indonesia).

"Transnational mining companies such as BHP Billiton have nothing to celebrate. The Constitutional Court ruling stresses to the government, especially the Minerals and Energy Department, that open pit mining in protected forests is still prohibited for all but the seven companies that have already begun exploitation" said Siti Maimunah, National Coordianator of the Mining Advocacy Network, JATAM.

The Constitional Court decision handed down on 7 July 2005 on the one hand recognises the huge impact on communities and the environment of open pit mining, but on the other hand makes an exception for seven companies to continue with such mining in protected forests. To be consistent with the evidence brought by the appellants, the Court should have annulled the Presidential Decree (and ratification) because it endangers the livelihoods of many and thus contravenes clause 33 (3) of the Indonesian Constitution. Nevertheless, the Court chose the road of compromise:

"Although this Court shares the opinion of all the experts brought by the appellants regarding the dangerousness and negative impacts of open pit mining in protected forests, nevertheless this Court also understands the reasoning for the need for a transitional regulation which continues the rights or legal status gained by mining companies before the advent of the Forestry Law (1999)." (quoted from the conclusions at pp 413-414 of the Judgement of the Constitutional Court).

The Indonesian Constitution requires that Presidential Decrees only be issued in conditions of pressing national crisis, "kegentingan yang memaksa", but the judges concluded that this is a subjective test at the discretion of the President, whilst recommending that in future, the President must consider more objective conditions before issuing further Decrees.

"This is a dangerous precedent. The impact is that the President may in future often use the Presidential Decree mechanism to steamroll forward with developments having large impacts on many people's livelihoods," said Chalid Muhammad, Director of WALHI, Indonesian Forum for Environment.

Indro Sugianto, Director of the Indonesian Center for Environmental Law concluded “Remember, with this Constitional ruling, no other companies outside the seven which have already begun may conduct open pit mining in protected forests. The government and mining industry must respect and comply with this judgement" [ends]

Contact:

Chalid Muhammad (WALHI) : +62 811 847 163
Siti Maimunah (JATAM) : +62 811 920 462
Indro Sugianto (ICEL) : +62 815 943 4228

BHP nickel plan in doubt

By Sian Powell in Jakarta, Finance News (Australia)

July 09, 2005

INDONESIA'S Constitutional Court has banned open-pit mining in protected forests for all but six companies that have already begun operations, potentially outlawing BHP Billiton's plan for a $1 billion-plus nickel mine in Papua.

According to a coalition of Indonesian environmental organisations, the ruling could also stymie two other Australian projects in the country.

However, the environmental coalition's interpretation of the ruling has been disputed by BHP. A spokeswoman said yesterday the ruling had not forbidden the mine, but the Gag Island operation nevertheless remained dormant.

"BHP obviously hasn't read the full judgment," responded Chalid Muhammad from the Walhi environmental organisation.

The Constitutional Court on Thursday rejected the request to ban all open-pit mining in protected forests, allowing seven firms that had begun work to continue, the environmental coalition said in a statement.

However, the coalition added that six other firms affected by the ruling were required to follow the Forestry Law, which forbids open-pit mining in protected forests.

In the complex 420-page judgment, the Constitutional Court judges ruled that "the six companies which are still at the stage of exploration or feasibility studies, at such time as they enter the exploitation stage must comply with the requirements in Clause 38 (4) of the Forestry Law (which prohibits open-pit mining in protected forests) as long as their licences for exploration and exploitation are not combined licences".

In general practice, mining companies are only awarded so-called exploitation licences once environmental impact assessment plans are approved. According to the environmental coalition, the court's ruling prevents open-pit mining in protected forests by BHP's Gag Nickel and two other Australian-backed companies - Aberfoyle Mining's Sorikmas Mining and Pelsart Tambang Kencana.

"Transnational mining companies such as BHP Billiton have nothing to celebrate," said Siti Maimunah, national co-ordinator of the Mining Advocacy Network, Jatam. "The Constitutional Court ruling stresses to the Government, especially the Minerals and Energy Department, that open-pit mining in protected forests is still prohibited for all but the seven companies that have already begun exploitation."

The BHP spokeswoman said the Constitutional Court's ruling permitted the Gag Island mine in Papua to go ahead.

"At this stage BHP Billiton does not have any firm development plans for Gag Island; we are evaluating a range of potential options and will continue to consult with the local community and relevant stakeholders," she said.

The laterite nickel find at remote Gag Island, in Indonesia's Papuan province, is touted as one of the richest in the world.

However, it has been stalled by opposition from environment groups based on BHP's plan, which may not meet the company's own environmental standards, to dump tailings into the ocean.

Originally hailed as a win for the mining lobby, the latest ruling honoured the contracts of companies that already had mining licences and had begun operations. These include Newcrest, with its mine in northern Sulawesi, and the giant Freeport operation in Papua. Chief Judge Jimly Asshiddiqie said overturning the law permitting 13 firms to operate could have created legal uncertainty in Indonesia.

Indonesia's Constitutional Court Upholds Mining Law

Thursday July 7 2005

Dow Jones Newswires

JAKARTA - Indonesia's Constitutional Court voted Thursday to uphold a law that has enabled 13 mining companies to operate in officially designated "protected forest" areas.

"We decided to uphold the law as it isn't against the 1945 Constitution," said presiding Judge Jimly Asshiddiqie.

Jimly said the decision was also taken on the basis that the government must honor contracts of companies that have already obtained licenses to operate in the areas.

He said overturning the law could result in legal uncertainty in Indonesia.

Analysts say the ruling is positive news for the local operations of foreign mining giants Freeport-McMoRan Copper & Gold Inc. (FCX) and Inco. Ltd. (N), as well as Indonesia's PT Aneka Tambang (ANTM.JK).

The Constitutional Court's review was prompted by appeals from eleven non-government environmental organizations and 82 individuals. The court agreed to review the case in January and began hearings in February.

As BHPBilliton gets the UK Busines in the Community's gong as"Company of the Year" for its "environmental and social performance" Henderson Global Investors releases its report on the contribution to carbon emissions by the UK's top FTSE-250 companies.

BHPBilliton is revealed as contributing to four fifths of such emissions among London's top four mining companies (BHPB, Rio Tinto, Anglo American and Xstrata), and 4% of the FTSE-250's total carbon output.

Corus, the UK-Netherlands steel (and now alumininum) maker chalks up 6%, while Shell and BP are held responsbile for a whopping 40% of the total .

However the company may not get everything its own way in Indonesia...

BHPB may be gagged

Miningnews.net

Monday, July 11, 2005

BHP Billiton may reportedly be forced to shelve its massive Gag Island nickel laterite project in the Indonesia following a court ruling last week regarding the development of new open pit mines in protected forests.

According to a report in The Australian, BHPB's estimated $1 billion mine is likely to be affected by the ruling effectively prohibiting open pit mining in protected forests except for the seven companies that have already started exploration.

However a BHPB spokeswoman said the ruling would not affect its Gag Island mine.

"At this stage BHP Billiton does not have any firm development plans for Gag Island. We are evaluating a range of potential options and will continue to consult with the local community and relevant stakeholders," the spokeswoman said.

BHPB chief executive Chip Goodyear has previously confirmed the company's commitment to not operate in areas of environmental significance, while not ruling out development of Gag Island.

The company was recently awarded the Company of the Year award by London group, Business in Community, for its efforts in improving its environmental and social performance, particularly in Africa.

Shares in BHPB were up 25c in morning trade to $18.63.

Court rules mining companies can operate in protected forests

July 07, 2005

The Jakarta Post

Jakarta - Thirteen mining companies will be able to operate in protected forests in Indonesia after the country's highest court on Thursday rejected a petition by environmental groups claiming the practice violated the constitution.

The Constitutional Court chairman Jimly Asshiddiqie said changes made to the forestry law, which allowed 13 firms to resume mining in protected forests, were aimed at improving Indonesia's investment climate and did not violate the constitution.

The request to annul the changes "lacks justification and therefore must be rejected," Asshiddiqie said.

Some 150 mining firms suspended their operations in protected forests following the issuance of the 1999 forestry law.

The country's economic minister said the ruling was "good news" for investors, but green groups said it would result in further degradation of Indonesia's forests, already under threat from illegal logging, slash-and-burn agriculture and urban expansion.

Coordinating Minister for Economy Aburizal Bakrie told AP that "it will definitely (bring) more confidence in the mining sector because this has been upheld. It reinforces the rule of law."

El Constitucional falla a favor 13 mineras y en contra 'verdes'

07-07-2005

Terra Actualidad - EFE

El Tribunal Constitucional de Indonesia validó hoy, jueves, los contratos que tienen 13 compañías mineras para operar en bosques tropicales protegidos y rechazó el recurso presentado por los ecologistas.

El Gobierno indonesio prohibió en 1999 la explotación minera de los bosques protegidos, pero el año pasado una ley reconoció la validez de los contratos de las mineras firmados antes de la prohibición.

Los responsables económicos de Indonesia se mostraron contentos con la decisión judicial porque, en su opinión, será bien acogida por los inversores.

Los ecologistas lamentaron el resultado jurídico y dijeron que la víctima serán los bosques indonesios.

El Ministerio de Medio Ambiente de Indonesia realizó hace dos años un estudio que decía que la selva tropical del país cubre un área de 120,35 millones de hectáreas, pero advirtió que desaparecería en quince años si no se ponía freno a la tala ilegal.