Mining group warn all lose in court actions

The Indonesian Mining Association (IMA) said on Wednesday that seeking court settlements in disputes between provincial governments and mining firms only caused losses to both sides, The Jakarta Post reported on Thursday.

IMA executive Paul Louis Coutrier said resorting to filing suit in disputes was ultimately counterproductive. "Legal proceedings are not only time consuming but costly too both sides," he said at a seminar on the implementation of the new autonomy law.

Coutrier said that court proceedings fueled legal uncertainty about a company's mining operations and disrupted its production process, which conversely caused losses of mining royalties payment to the provinces and regencies, he said.

He was referring to a dispute between Minahasa regency in North Sulawesi, which sued gold mining company PT Newmont Minahasa Reya for unpaid taxes. The regency's actions almost led to the suspension of Newmont operation but the central government facilitated an out-of-the court settlement.

Observers said that the implementation of the autonomy law and intergovernmental fiscal balance law beginning next year could trigger disputes between the local government and mining companies because the new regulations issued by the local government after the implementation of the new laws could contradict with the existing mining contracts.

Speaking at the same seminar, South Sumatera governor Rosihin Anwar said that local governments and investors should try to understand each other's value and expectations to prevent disputes.

But he warned that local government should also refrain from imposing unnecessary regulations because they could discourage investors. (*)