MAC: Mines and Communities

Government excludes mining firms from environmental audit

Published by MAC on 2003-07-31

Government excludes mining firms from environmental audit

Moch. N. Kurniawan, The Jakarta Post

July 31 2003

Jakarta - The government has excluded mining companies from the 2002 environmental audit (PROPER) due to the lack of precise indicators to measure the amount of damage they have caused to the environment, says an official.

"We can assess mining firms based on pollution criteria, but we do not have clear indicators yet to appraise their environmental destruction, and that is why the government has decided not to include mining companies on the list of firms to be audited in 2002," Deputy State Minister for the Environment Isa Karmisa Ardiputra, who is in charge of the Management of Environmental Impact from Institutional Sources, told reporters on Wednesday.

The government reintroduced PROPER last year to inform the public about polluting companies, after the environmental audit was stopped in 1997 because of the economic crisis.

The 2002 PROPER's results will be announced within the next two weeks, said Isa.

PROPER is an audit of companies' environmental performance based on air and water pollution, waste management and environmental damages.

A total of 85 companies had been listed to take part in the 2002 PROPER, 12 of which were mining firms. The remaining companies are in the forestry and manufacturing sectors.

The 12 mining firms that have been phased out from the 2002 PROPER are: PT Freeport Indonesia in Papua, PT Kaltim Prima Coal and PT Kelian Equatorial Mining in East Kalimantan, PT Adaro and PT Arutmin in South Kalimantan, PT INCO in South Sulawesi, PT Newmont Nusa Tenggara in West Nusa Tenggara, PT Antam Pomala Kolaka in Southeast Sulawesi, PT Timah and Kobatin in Bangka Belitung, PT Antam in West Java and PT Bukit Asam in South Sumatra.

Isa said the government must establish clear criteria on environmental destruction caused by mining firms.

"For example, we should determine a measurement based on change in landscape, floods and forest destruction because of mining operations," he said.

KPC spokesman Drajat Panjawi and Newmont Nusa Tenggara spokesman Heru Harjono said that their firms had not been informed by the Office of the State Minister for the Environment about the exclusion of mining firms from the 2002 PROPER list.

Drajat added that principally, KPC was ready to undergo the 2002 PROPER.

"We still support the program, as it will verify whether we care about our environment or not," he said.

Isa said the 2002 PROPER showed that between 60 percent to 70 percent of the participants were polluters, but he declined to identify them.

For example, he said, many firms in the forestry and agriculture industry had failed to comply with hazardous waste management regulations and standards.

"They may possess the facilities to collect, store and manage the hazardous waste for further use, but do not have any license from the government to do so," he said.

"Global mining industry picking up'

Fitri Wulandari, The Jakarta Post

July 31, 2003

Jakarta - The global mining industry is on the rise again due to strong demand from the growing economies of China and India, a mining association said on Wednesday.

Paul L. Coutrier of the Indonesian Mining Association (IMA) said that the mining industry had suffered a slump during the 1990s, which had prompted many experts to call it a "sunset industry".

The slump happened because of a decrease in demand from the United States, the main consumer of mining products, which had reached the peak of its "new economy" growth during the 1990s, something that resulted in reduced interest in manufacturing industry.

Instead, during the period, the Americans were more interested in intelligence-based industries, which allowed them to rake in huge profits by selling copyrights.

However, in 2002, in line with the growth of China's and India's economies, global demand for mining products started to pick up, Coutrier said.

"The global mining industry is repositioning itself. Within the next five years, the mining industry will be up again," he said during a discussion between the association and The Jakarta Post.

Coutrier explained that with populations of 1.5 billion and one billion respectively in China and India, these countries were projected to have mushrooming incomes per capita, which would enable them to buy consumer products, such as cellular phones, whose components were mostly made of mining products. They would also need more mining products to support their growing manufacturing industries.

According to Coutrier, a number of new players in the mining industry had sprung up, including Vietnam, Laos, Cambodia and South Korea.

The new developments in the global mining industry should have served as a wake-up call for Indonesia, whose mining industry had been in the doldrums for years, Coutrier said.

Jeffrey Mulyono, the chairman of Indonesian Coal Mining Association (ICMA), said that unless the government worked to revive the industry, Indonesia would lose out on the opportunity to compete in the global mining industry.

"Don't let us lose opportunities in the mining business again," he remarked.

The country's mining industry has received very little investment for the last ten years while no new exploration had taken place during the past four years, he added.

On top of that, many mining companies were about to stop operating due to declining resources. Most mining companies in Indonesia have been operating since the 1970s and 1980s.

For example, gold mining companies PT Kelian Equatorial Mining and PT Newmont Minahasa were closing their mining operations in East Kalimantan and North Sulawesi respectively.

Due to the worsening investment climate, the IMA said Indonesia's ranking in the mining sector had continued to drop. Indonesia was now ranked 27th out of 35 countries surveyed in 2001-2002 by an international consultant, the Fraser Institute of Mining Companies, in terms of the "attractiveness" of their mining sectors.

Mineral production had remained unchanged since 2001. A report from the Ministry of Energy and Mineral Resources revealed that gold production had dropped to 142,238 kilograms in 2002 from 162,605 in the previous year, while ferronickel output fell to 8,804 tons from 10,302 tons

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