INCO to file lawsuit at International Arbitrage

INCO to file lawsuit at International Arbitrage

Miningindo newsletter

28th April 2004

International Nickel Indonesia (INCO) will file a lawsuit against the Indonesian government at the International Arbitrage if the government excludes the company in the list of mining companies that will be allowed to mine in protected forests. The company will also do the same thing if the Indonesian national parliament (DPR) declines legislating the regulation in lieu of law (Perpu) No. 1/2004 into law.

President Director of PT Inco Tbk, B. Tobing, said in Jakarta recently as quoted from Tempo Interactive, Inco should be included in the list of companies that will be allowed to continue their mining activities in protected forests. Inco obtained a contract of work for nickel mining in Sulawesi from the Indonesian Government in year 1968; it had been long before the issuance of Law No.41/1999 on forestry that bans mining in protected forests in Indonesia. "In this regard we have rights to go ahead with our mining activities in our concession area," he said.

As previously reported, early in March the Indonesian government issued a Perpu that allows 13 of 22 mining companies to go ahead with its mining activities in the overlapping areas between the forestry and mining sectors. The guidelines of the implementation of the Perpu will be legislated with the issuance of a presidential decree.

So far the presidential decree has not been issued. The presidential decree will explicitly include the resumption of the operations of 13 mining companies. In a letter submitted by Indonesian coordinating minister of economy to President Megawati Soekarnoputri, are mentioned 13 mining companies as follows: PT Inco, PT Freeport Indonesia, PT Karimun Granite, PT Indominco Mandiri, PT Antam, PT Natarang Mining, PT Nusa Halmahera Mineral, PT Pelsart Tambang Kencana, PT Interex Sacra Raya, PT Weda Bay Nikel, PT Gag Nickel, and PT Sorikmas Mining.

But so far none of those companies has been confirmed for the resumption of mining activities in the protected forests under the list of priorities of the central government. But Tobing was sure Inco would be one of the 13 companies, which will soon be allowed to resume their mining operations. "If our company were not included in the list of priorities, we would take any necessary action as referring to in the contract of work including filing a lawsuit against the Government at the International Arbitrage," he assured.

The issuance of the Perpu No. 1/2004 has yet to be in a final stage because the central government has not passed it over the DPR for legislation into law. If the DPR does not approve the Perpu, the presidential decree will automatically be declared null and void. In response to it, Tobing said it should be the concern of the central government on passing the Perpu over the DPR for legislation into law. Inco is only to wait for the government to announce the result of approval from the DPR. So far Inco has not taken any action to either approach or invite members of the DPR to visit the company's site in the protected forest prior to the issuance of the Perpu.

Tobing promised that Inco would preserve the environment in the protected forest. Rehabilitation and re-vegetation are always conducted by Inco following any termination of its mining activities.