PT Timah refuses to follow Presidential Decree on usage of domestic products

The management of the publicly-listed tin mining company PT Timah Tbk has refused to follow a government decision regarding the obligation for state enterprises to procure goods and services from the domestic market, the Investor Daily Indonesia reported in its Thursday edition.

This is because PT Timah should no longer be considered as a state-owned company as the government has already sold part of its stake to the public.

The new ruling is contained in the Presidential Decree(Keppres) No. 80/2003 and the Minister of Industry?s Regulation No. 11/M-IND/PER/3/2006 regarding Technical Guidelines on the Usage of Domestic Products.

?The Presidential Decree is only applicable to the government agencies which are funded by the State Budget as well the companies that use listing of projects mechanism. But, PT Timah is a commercial company which follows the Corporate Law and the Capital Market Law,? Timah?s company secretary Prasetio Budi Saksono told the Investor Daily on Monday in Jakarta.

Budi said Ministry of Industry has recently asked PT Timah to buy wire rope from the domestic market.

Though PT Timah has been buying domestic goods for several reasons, the company has been buying wire rope from China since 2005.

The Ministry of Industry says PT Timah has signed a memorandum of understanding with the Office of the State Minister for State Enterprises on Dec. 28, 2005 regarding the usage of domestic products.

Based on the PT Timah?s 2005 financial statement, the government still have a 65 percent stake in PT Timah and the rest 35 percent is owned by the public. (*)