Indonesia?s arbiter in coal dispute case resigns
Friday, June 17 2016 - 04:43 AM WIB
Indonesia?s arbiter in facing lawsuit filed by India Metal and Ferro Alloys Limited (IMFA) over a coal dispute has resigned to avoid conflict of interest.
Head of the Legal Division at the Directorate General of Mineral and Coal of the Ministry of Energy and Mineral Resources, Heriyanto said on Thursday that IMFA is a Mauritius Island registered company, while the Indonesian arbiter turned out to have at one time represented Mauritius. ?So the arbiter has resigned because he feels there?s conflict of interest,? Heriyanto said, adding that the government would soon appoint a new arbiter, probably next month.
IMFA filed in September of last year a lawsuit against the Indonesian government with an arbitration court in The Hague after the company failed to carry out mining operations at its concession in Kalimantan due to overlapping permits. The Indian firm also demanded compensation worth US$581 million (about Rp 7.7 trillion).
IMFA acquired the concession from an Indonesian firm PT Sri Rahayu Indah (SRI) in 2010 for $8.7 million, according to the government. SRI obtained an IUP mining business permit for a combined concession of 3,600 hectares, spanning the regencies of East Barito, South Barito (South Kalimantan) and Tabalong (Central Kalimantan).
Problem emerged for IMFA after the local regency administrations issued permits to other seven investors.
The problem of overlapping permit emerged after the central government handed over the authority in issuing mining permits to local administrations as part of their greater autonomy power. This has been seen as one of the key challenges of investing in the Indonesian mining sectors.
The government has said that IMFA has failed to conduct proper due diligence process in acquiring SRI. He said that the Indian firm should have consulted the central government before making the investment.
Elsewhere, Heriyanto acknowledged that the lawsuit filed by IMFA has triggered other miners to prepare similar action. He declined to provide details.
Editing by Reiner Simanjuntak