Mining: (un)protected Forests

Mining: (Un)Protected Forests

July 18, 2004

Laksamana.Net

Parliament has endorsed a controversial presidential regulation allowing 13 mining companies to resume their operations in protected forests.

After a lengthy debate at a plenary meeting on Thursday (15/7/04), 131 legislators voted in favor of the ruling and 102 voted against it.

"This decision is in line with the government's attempt to ensure legal certainty in the mining sector, which has been in limbo for years," Forestry Minister Muhammad Prakosa was quoted as saying by The Jakarta Post daily.

Mining in protected forests was banned under the 1999 Forestry Law, jeopardizing dozens of mining concessions awarded prior to the enactment of the legislation.

Keen to reverse six consecutive years of declining investment in the mining sector and to avoid potential lawsuits for breach of contract, President Megawati Sukarnoputri on March 11 issued the regulation allowing the 13 companies with contracts issued before 1999 to continue their work.

Environmentalists have condemned the regulation and expressed suspicion the mining firms, which include several multinationals, might have donated campaign funds to certain political parties ahead of the recent presidential election.

Most of parliament's nine factions opposed the ruling but they lacked the numbers to have it annulled.

Those against the regulation were the National Awakening Party, the Reform faction, the Crescent Star Party, the Military/Police faction, the Indonesian Nationhood Unity faction and the Daulat Ummah faction.

Those in favor were Golkar Party, the United Development Party and Megawati's Indonesian Democratic Party of Struggle.

The 13 firms covered by the ruling are Freeport Indonesia, Karimun Granite, Inco, Indominco Mandiri, Antam - Bahubulu, Antam - Buli, Natarang Mining, Nusa Halmahera Minerals, Pelsart Tambang Kencana, Interex Sacra Raya, Weda Bay Nickel, Gag Nikel and Sorikmas Mining.

Critics claim the endorsement of the regulation will allow about 140 other mining firms with contracts issued before 1999 to also demand resumption of their operations in protected forests.

But Prakosa said the government had not yet considered granting the other companies the same permits.

A coalition of conservation groups, led by the Indonesian Forum for the Environment (Walhi), is planning to challenge the regulation in the Constitutional Court.

They say the challenge will be a test case to see if the court puts the interests of the nation and the environment above those of multinational corporations.

Conservationists have rejected arguments that companies banned from mining in protected forests could sue the government for billions of dollars under international arbitration for breach of contract.

Investment commitments by the 13 mining firms reached $17 billion last year and contributed $400 million to state coffers, an official of the Energy and Mineral Resources Ministry said Friday.

Simon Sembiring, director general of geology and mineral resources, said the mining operations were also accelerating infrastructure development and job creation in the regions.

Commenting on the objections by environmentalists, he said they were reasonable. "The protests are positive, they remind us we have to be careful to not destroy our environment," he was quoted as saying by state news agency Antara.