Inco COW needs to be reviewed
Saturday, September 9 2000 - 04:00 AM WIB
South Sulawesi governor HZB Palaguna, Central Sulawesi governor HB Paliudju and Southeast Sulawesi governor La Ode Kaimoeddin will soon meet with Vice President Megawati Soekarnoputri to present their proposal to review the government's contract of work (COW) with PT Inco.
The three governors met in Kendari, the capital of Southeast Sulawesi, on Friday to sign Sulawesi regional development cooperation agreement.
"We will soon meet with the Vice President to discuss this matter. We will ask the government to review and revise the COW with PT Inco because it is not anymore in line with current development," Palaguna told reporters.
Palaguna, accompanied by Paliudju and Kaimoeddin, said that currently, Inco's contribution to the three provinces was very small, compared to the environmental destruction the company had caused in the three provinces.
Inco mining concessions cover areas of around 90,000 hectares in South Sulawesi, 68,000 hectares in Southeast Sulawesi and 36,000 hectares in Central Sulawesi. And the company only Rp 776 million in land rent to the South Sulawesi administration, Rp 420 million and Rp 284 million respectively to Southeast and Central Sulawesi administrations.
Besides the land rent, each provinces also gets other income from Inco, including royalties as well as land and building taxes. The South Sulawesi administration, for instance, gets an average of Rp 2.5 billion per annum in royalty, and Rp 1 billion in land and building taxes.
Most of the royalties money is given to the Luwu Utara district administration, where Inco's mining sites are located. Besides, Inco also allocates Rp 1 billion per annum for community development programs in Luwu Utara.
Palaguna said that the money Inco contributed to local administrations had been very small compared to profits it enjoyed every year. The company's income in the first quarter of thsi year alone reached US$20 million, and second quarter at $29.2 million.
Inco, a foreign investment venture, has been mining for nickel matte in Malili, Luwu Utara since mid 1970s. Its mining concessions cover 194,000 hectares area spreading in South, Central and Southeast Sulawesi. (*)