FOCUS: Wimpy says human rights, environment, community development prominent in mining bill
Saturday, June 23 2001 - 06:54 AM WIB
Director general of geology and mineral resources Wimpy S. Tjetjep said different from the existing Mining Law No. 11/1967, the mining bill to be proposed by the government put emphasis on investors? obligation to protect human rights, environment and to help economically develop the communities living around their operations.
?The existing law lacks attention to community development, protection of human rights and environment,? Wimpy said last Thursday during a roundtable discussion organized by consultancy firm Apco.
Conflicts have often occurred in many mining operations across the nation because local villagers, supported by non-governmental organizations, considered mining companies did not pay enough attention to community development, environmental protections and the local people? land rights.
The mining bill more clearly define the actions that investors have to take or avoid in protecting the local people?s human rights, environment and in participating in the development of the local communities? economy, Wimpy said.
Regarding community development, the mining bill says investors should take part in the development of the areas and communities around their mining operations, the creation of job opportunities, the empowerment of the small and medium scale businesses in cooperation with the central government, the regional governments and the local communities.
Investors should give chances for local small and medium companies to take part in supporting services, environmental management and protection. The mining companies should also provide local people with training and education programs.
Investors also encouraged to form ?partnership? with local traditional miners by buying their output or giving them parts of their concession with an agreement that all the products would be sold to the investors.
Investors should protect environment during operation and reclaim their mining sites after the end of their operations, the bill says, adding that investors have to put the so-called reclamation fund at central government or regional government-owned banks as a guarantee that they would reclaim their mining sites after the end of their operations.
In case investors are not able to do the reclamation, the government would assign third parties to carry out the job using the reclamation funds.
The bill also says investors should respect the local people?s land rights, including customary land rights, in acquiring land for their operations.
Investors may buy the land, lease the land or form a production-sharing agreement with the landowners, the bill says.
Wimpy said different from the existing law, the bill metes out strong punishment to anyone or companies that do mining activities without license, and any parties who obstruct the operations of licensed companies.
Under the bill, anyone or companies who do not have licenses are threatened with a maximum 10-year imprisonment or a maximum fine of Rp 500 million for doing surveys and explorations and a maximum 10-year imprisonment or a maximum fine of Rp 1 billion for doing production activities.
Licensed mining companies are threatened with a maximum 10-year imprisonment or a maximum fine of Rp 1 billion for giving faked reports about their activities to the government.
Anyone who attempts to obstruct the surveys, feasibility study and explorations by licensed companies is threatened with a maximum one-year imprisonment or a maximum fine of Rp 200 million. If investors are already in the phase of construction of production, the maximum jail terms for troublemakers is five years and the maximum fine Rp 500 million.
Anyone who buys products of unlicensed mining companies may be sentenced up to five years and fined up to Rp 500 billion, the bill says.
With the strong punishment, analysts say, the bill seeks to address the concerns of many mining investors about the rampant illegal mining activities and blockage of their operations by local villagers.
Under the bill, the central and regional governments issue three types of licenses, that is Mining Venture License (IUP), People Mining License (IPR) and Mining Venture Contract (PUP).
IPR license is given to small-scale traditional miners, while IUP and PUP are allocated for modern companies, which are owned by either local or foreign investors.
Wimpy said other key points in the mining bill are as follows:
-The regional governments hold rights to manage, supervise mining companies in their respective in accordance with the Autonomy Law No. 22/1999 and the intergovernmental fiscal balance law No. 25 /1999, which took effect early this year.
-Under the bill, both local and foreign investors will have equal rights to develop all kinds of mining resources across the nation. In the existing regulation, foreign investors are barred from developing the so-called C-category mining resources, including sand, stone, kaolin, underground water etc. Foreign investors are also prohibited from operating in Java.
-Under the bill, investors will be given options to choose whether to follow the fixed fiscal regime stated on their contracts, that is the one applied during the signing of the contract, or follow all the changes in the fiscal regime made by the government.
-The Contract of Work (COW) system, which is made obligatory in the existing law and has gained appreciation by the international mining industry, will be abolished. Instead, under the bill, investors will be given options whether to choose the IUP license or the PUP contract. The PUP license will be issued by either the regional or central governments, and similar to COW, it has to be consulted with the House of Representatives. (Alex)