Mining association regrets Newmont's closure
Monday, April 10 2000 - 04:00 AM WIB
The Indonesian Mining Association (IMA) regretted on Monday the decision of the Tondano District Court to close down the mining operation of gold mining company PT Newmont Minahasa Raya in the Minahasa regency, North Sulawesi at the request of the regency administration.
IMA's executive director P.L Courtier said the court's decision reflected "the arrogance of power" of the local authorities "amid euphoria over autonomy".
Coutrier also blasted the "questionable" process through which the district court made the decision.
"Mining is a very technical matter which a judge does not well understand. Unfortunately, the court's judge did not give chances for Newmont to present expert witnesses during the hearing of the case," Coutrier told Petromindo.
The Tondano District Court ordered on Saturday Newmont to close down its mining operation by April 16, 2000.
The court made a provisional decision to suspend Newmont's operation in January, this year at the request of the Minahasa regency administration which sued Newmont following its refusal to pay the local tax on overburden. Newmont refused to pay the taxes because they were not included in the contract of work and it also claimed that it did not commercially use the overburden. The overburden was extracted to enable it to mine the gold deposits beneath.
The Provincial High Court recently gave its approval to the provisional ruling, paving the way for the District Court to execute the ruling.
According to North Sulawesi's Manado Post, Newmont's lawyers were set to present two mining experts during the hearing on Saturday, that is former director general of mining Kosim Ganda Taruna and mining professor of the prestigious Bandung Institute of Technology Ambro Mangunwijaya.
The paper said judge Susmono Wijodimulyo rejected both experts on the grounds that the hearing was belatedly held and both of them knew only technical matters.
Former director general of mining Sutaryo Sigit, who is also a commissioner of coal mining company PT Adaro Indonesia, also voiced concerns over the court's decision, saying it would affect mining investment in the country.
He noted that Minister of Mines and Energy Susilo Bambang Yudhoyono and his predecessor Kuntoro Mangkusubroto had maintained that overburden was not taxable but the Minahasa regency, turning deaf ears to them, insisted to levy taxes on overburden on the company.
"Minister of Mines and Energy is the highest authority in the sector. Thus investors will ask if the highest mining authority is not listened to, who is then in charge?" Sutaryo told Petromindo.
Sutaryo said the court's decision could risk Newmont's filing arbitration lawsuit against the government of Indonesia, which was a party to the contract of work held by Newmont, for violating the contract.
"Thus, the consequence could be worse," Sutaryo said.
Legislator Irwan Prayitno, head of the House of Representatives' Commission VIII for mines and energy also regretted the court's decision.
"I really regret the decision. The decision will not bring a win-win solution to both disputing parties. Investors will get discouraged," Irwan said, adding as the consequence of the closure of Newmont's mining operation, the regency will have a smaller revenue and face rising unemployment.
He said the Minahasa regency should have asked for concessions to settle the dispute rather than pursuing on litigation. (*)