MAC: Mines and Communities

Government Allows Mining Firms Back Into Protected Areas As Investment Lure

Published by MAC on 2004-03-12
Source: The Jakarta Post

Government allows mining firms back into protected areas as investment lure

Fabiola Desy Unidjaja/Fitri Wulandari, The Jakarta Post, Jakarta

March 12, 2004

The government has issued a regulation in lieu of law (perpu) that will allow 13 mining companies to resume their operations in protected forests in a bid to provide legal certainty for investors.

The decision was greeted by protests from environmental activists, who said it would open the way for the further destruction of the country's natural resources.

Coordinating Minister of the Economy Dorodjatun Kuntjoro-Jakti said it was decided during a Cabinet meeting on Thursday to issue Perpu No. 1/2004 to address the issue of mining concessions that overlap with protected forests.

"The 13 mining companies will be allowed to resume their mining activities because they have proven reserves and are economically viable," Dorodjatun said after the meeting.

He added that the decision was aimed at providing certainty to investors in a bid to increase the sluggish investment in the mining sector.

President Megawati Soekarnoputri led the meeting, which was also attended by Minister of Law and Human Rights Yusril Ihza Mahendra, Minister of Energy and Mineral Resources Purnomo Yusgiantoro and Minister of Forestry M. Prakosa.

In the country's legal system, a perpu is equal to a law and is normally issued in cases of emergencies in order to avoid the lengthy process of law making, which involves the House of Representatives. A perpu immediately takes effect and remains so until the House approves a law to replace it. The government may also propose the perpu as a bill.

The 13 mining companies to be affected by the perpu are among 22 mining firms that appealed to the government to be allowed to resume their operations in protected forests following the implementation of Law No. 41/1999 on forests banning open-pit mining in protected forests.

The remaining nine companies will not be given licenses to resume their mining activities in protected forests because no proven and economically viable reserves have been found in their areas.

The 22 firms received contracts from the government several years ago before the law on forests came into effect, and their concession areas were not designated as protected forests at the time the contracts were signed.

The names of the 13 mining companies affected by the perpu was not available on Thursday.

Lambock V. Nahattands, deputy state secretary for legal affairs, said the government regulation basically added a new article to Law No. 41/1999 on forests.

"The new article, 83a, says all mining licenses and agreements in forests that were in place prior to the imposition of Law No. 41/1999 will remain in effect until the agreement or license expires," Lambock said.

He said the perpu would be submitted to the House as a bill, and that the government would issue a presidential decree on the 13 mining companies.

Environmental activists who had fought to prevent the issuance of the licenses protested the decision.

Longgena Ginting, executive director of the Indonesian Forum for the Environment (Walhi), said the government not only violated its own law but also the global commitment to stop the destruction of biodiversity.

"We regret the decision. It is the legalization of the destruction of natural resources," Longgena told The Jakarta Post, adding that Walhi would take legal action against the decision and hold an international campaign to protest the move.

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