MAC: Mines and Communities

House Urged To Challenge Mining Ruling

Published by MAC on 2004-07-02
Source: The Jakarta Post ()

House urged to challenge mining ruling

A. Junaidi, Jakarta, The Jakarta Post

2nd July /2004

Opposition to the government regulation in lieu of law, or Perpu, on mining is growing, raising doubts over the future of mining operations in protected forests.

Two prominent legal experts told the House of Representatives (DPR) on Thursday that Perpu No. 1/2004 had no strong legal basis.

"In terms of procedure and substance, Perpu No. 1/2004 does not meet the requirements for issuance," Koesnadi Hardjosoemantri, a law professor from Gadjah Mada University, told House members in charge of deliberating the regulation.

According to Article 22 of the Constitution, Koesnadi said, a perpu was issued only in an emergency.

The government issued Perpu No. 1/2004 when several mining companies halted operations following the enactment of Law No. 41/1999, which bans open-pit mining in protected forests.

"The substance of the regulation could cause greater environmental damage. So we suggest that the House reject it," Koesnadi said.

The House has begun deliberating Perpu No. 1/2004, which stipulates that all mining contracts signed before the enactment of Law No. 41/1999 on forestry are valid for the remainder of their terms.

President Megawati Soekarnoputri also issued a complementary decree on May 12, 2004, allowing 13 mining companies to resume operations in protected forests.

The firms, most of which are owned by foreign investors, including those from the United States and Australia, operate in protected forests in Riau, Maluku, Lampung, East Kalimantan, South Kalimantan, Papua and other areas throughout the country.

Several non-governmental organizations have deplored the perpu and the presidential decree, saying that the rulings opened the way to more environmental damage.

They said the two regulations had violated Law No. 41/1999 on forestry, which banned the operation of open-pit mining in protected areas.

Many local residents have also opposed the renewed operation of the firms. One resident was shot dead by police last year during a protest against a coal mining operation in a protected forest in Halmahera, Maluku.

Noted lawyer Todung Mulya Lubis told legislators that the government should not worry about the possibility of lawsuits being filed by foreign investors.

He said foreign investors could not demand that the government be accountable for a breach of contract, as Law No. 41/1999 had been ratified by the House, and because any agreements between the government and investors could not violate Indonesian laws.

Minister of Energy and Mineral Resources Purnomo Yusgiantoro had previously warned of legal repercussions if Indonesia failed to honor its mining contracts.

Government officials have often cited a 2001 case in which the Geneva Arbitration Court ordered state oil and gas company Pertamina to pay US$261 million in compensation to Karaha Bodas Co., which was owned by several U.S. investors, for canceling its geothermal power project in Garut, West Java.

The government had halted the project in 1998 as part of belt-tightening measures to cope with the economic crisis.

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