?Lex specialist? status in mining contracts will be removed: Purnomo
Saturday, August 11 2001 - 03:22 AM WIB
The minister said that international investment analysts has downgraded Indonesia?s position into one of the most unattractive countries in the world for mineral investment due to the implementation of the so called lax specialist in the existing contract.
?We have studied and found that the reason behind the lack of interest in the country?s mining sector is due to the lex specialist adopted in the contract,? he was quoted by Bisnis Indonesia as saying.
Under the lex specialist clausal, a contract could not be changed although it is no longer consistent with the regulations issued after its issuance.
Purnomo said that the government would replace the lex specialist treatment, which was adopted to ensure the certainty in the part of investors, would be replaced with incentives. Such kinds of incentives would be introduced in the production-sharing contract in the oil and gas production.
Investors in oil and gas as well as in mining sectors would be also be given tax incentives such a tax breaks to reduce their import costs, the minister said.
According to the minister, many mining companies are still required to sell part of their stake to local investors to meet the mandatory divestment program imposed on foreign companies as stipulated in their contracts.
The government has in fact allowed foreign investors to own up to 100 percent of their investment but mining companies whose contracts signed before the new invest regulation was issued in. 1994 could not enjoy the incentive.
The minister said that only PT Freeport Indonesia can enjoy the incentive, while other mining firms should stick to their contracts which require them to transfer part of their interest to local firms. (*)