East Kutai to file criminal charges against Ridlatama Group
Wednesday, March 5 2014 - 01:52 AM WIB
The East Kutai regency administration in East Kalimantan plans to file criminal charges against Ridlatama Group, reportedly owned by UK-based Churchill Mining Plc, for falsifying documents and other regulatory breaches made by four of the group?s companies.
The planned move comes as the International Centre for Settlement of Investment Disputes (ICSID) has ruled recently that it has jurisdiction to hear claims filed by Churchill against the Republic of Indonesia for revoking the company?s ownership over coal mines in East Kutai.
Regent Isran Noor said that Ridlatama has falsified the so-called KP mining permit documents to gain control over coal mines in the regency.
Speaking to reporters on Tuesday, Isran said the administration would file the criminal charges with the East Kalimantan Provincial Police this week.
He said that aside from falsifying documents, Ridlatama had also breached other regulations. He pointed out that the company had conducted coal mining operation while its permit from the Investment Coordinating Board (BKPM) and the Ministry of Energy and Mineral Resources were limited to mining service.
?But they instead conducted mining activities in East Kutai by falsifying documents to gain control over the mines. That?s why a few years ago, I revoked their KP permits,? he said.
He added that the group has also made a violation by transferring its majority shares to a foreign company, Churchill Mining, while existing regulations stipulate that KP mining permits must be 100 percent owned by Indonesian citizen or legal entity fully owed by Indonesian citizen.
Aside from that, Ridlatama also conducted mining activities in forest areas without the necessary permit from the Ministry of Forestry.
Isran said that the administration initially did not want to sue Ridlatama because the company has already suffered losses when its KP permits were revoked. ?I initially pity them because by revoking the KPs they?d suffered dear losses. But now I can?t allow them to walk free because Churchill Mining as the owner of Ridlatama Group has filed charges against us and the government of Indonesia with ICSID,? he explained.
Churchill filed in May of 2012 a Request for Arbitration with ICSID against the Republic of Indonesia (RI), alleging that Indonesia breached its obligations under the UK-Indonesia Bilateral Investment Treaty when licenses on the East Kutai coal project in Kalimantan were revoked.
Churchill?s Australian subsidiary Planet Mining Pty Ltd, which via its 5 percent shareholding in PT Indonesia Coal Development also held an interest in the East Kutai Coal Project, filed a separate arbitration with the ICSID against RI pursuant to the Australia-Indonesia Bilateral Investment Treaty (the Planet Arbitration). The Churchill Arbitration and Planet Arbitration have subsequently been consolidated into a single proceeding.
In its announcement on 10 May 2013, Churchill provided a preliminary estimate of its and Planet's damages as a result of the actions taken by the Republic of Indonesia of not less than US$1.054 billion, excluding interest.
Elsewhere, Isran is confident that Indonesia will win the legal battle against Churchill considering the various regulatory breaches made by the UK firm in acquiring the East Kutai coal project. He dismissed suggestion from some people for the government to seek for settlement with Churchill and pay compensation to the UK firm, the Investor Daily reported on Wednesday.
Editing by Reiner Simanjuntak