Government vows to honor contracts with foreign investors

Coordinating Minister for Economy, Finance and Industry Kwik Kian Gie stressed on Thursday that the government would honor contracts with foreign investors made in the past in a bid to create legal certainty in the country.

"The government will remain consistent with all the contracts that have been signed. This is important to create investment certainty in Indonesia," Kwik told a Malaysian business delegation here.

Kwik's comment was made amid strong public pressure on the government to change or terminate contracts allegedly designed in a corrupt way during the past authoritarian rule of former president Soeharto.

The most high profile example was the case of giant gold mining firm PT Freeport Indonesia in West Papua or formerly known as Irian Jaya province.

Freeport has been alleged of environmental destruction, indifference to the local people, human rights violation and corrupt and nepotistic practices in the past.

Even Minister of Environment Sonny Keraf had threatened to change Freeport's contract if the company was proven to have violated environment.

Another cabinet member Freddy Numberi also demanded a change in the contract to incorporate the ownership of local people in the company.

But Kwik insisted that Indonesia must honor the contracts. He said that if there was a problem with the contract, there's always ways to renegotiate not terminate the contract. (*)