35 NGOs threaten to sue Energy Minister

As many as 35 non-governmental organizations (NGOs) in East Kalimantan have threatened to file a class action, and to sue five senior officials at the Ministry of Energy and Mineral Resources for allegedly blocking the local people?s demand to acquire 51 percent of Kaltim Prima Coal? shares, Bisnis Indonesia reported on Friday.

The NGOs have appointed Herry Tombeng, Dahri Yasin and AP Iskandar as their lawyers in the legal fights against the five government officials who include Minister of Energy and Mineral Resources Purnomo Yusgiantoro, the ministry?s Director General and Secretary General.

The NGOs said that the five officials had acted against the law by blocking the local people?s spirit to acquire 51 percent of KPC shares.

KPC, which operates a large coal mining area in East Kalimantan, is equally owned by world mining giants Rio Tinto and BP. Under its contracts of works, the company?s shareholders are required to divest 51 percent of their shares to local investors.

However, the mandatory divestment program does not run as expected due to dispute with the East Kalimantan provincial administration, which recently filed a legal suit against the existing shareholders for allegedly barring it from bidding the 51 percent share.

Minister Purnomo and several other senior officials at the Ministry of Energy and Mineral Resources condemned the local government?s legal action and demanded the withdrawal of the legal suit to allow for the resumption of the divestment plan but the East Kalimantan turned over the demand.

The minister than proposed the government?s cabinet to decide the future of the KPC divestment plan, and recommended two main options which could be taken to solve the problem. The recommendation which requires the government to take over the 51 shares of the coal mining company, or to allow it to decide the buyer of the shares have, however, angered the locals.(*)