Anissa S. Febrina, The Jakarta Post, Jakarta
The Indonesian Chamber of Commerce and Industry (Kadin) has warned the political elite against stirring up protests directed at foreign companies' mining operations, with jittery investors watching from the sidelines.
""There should be no provocative approach anymore against mining operations,"" M.S. Hidayat said Wednesday in reference to a rash of attacks and protests against foreign companies. ""We should all try to create a conducive investment climate in order to further improve the economic condition.""
Speaking at a Kadin press conference, Hidayat said the local communities' resentment of mining operations, which are mostly controlled by foreign investors, could be fueled by an inadequate contribution provided by the companies for local development, which is the argument of human rights groups.
If that were the case, he added, the discontent could be resolved through negotiation, such as by reviewing the existing mining contracts to ensure that local people receive more financial benefits from their operation.
Protests against American companies' interests have spiraled into violence in recent weeks, including against ExxonMobil Corp., Newmont Mining Corp. and Freeport-McMoRan Copper & Gold Inc., with damage to property and the loss of at least five lives.
National Intelligence Agency head Syamsir Siregar indicated there were political moves behind the allegedly orchestrated protests, but he did not elaborate.
Kadin's deputy chairman for international cooperation John Prasetyo said many foreign executives also believed the unrest stemmed from conflicts among the country's political elite.
""We have to deal with the root of the problem -- is it lack of community development or a mistake during the history of the contract negotiations?"" he added.
Hidayat said demanding closure of the company's operations here sent the negative message to foreign investors that Indonesia lacked legal certainty.
National Economic Recovery Committee head Sofjan Wanandi said the protests would deter the crucial investment needed to boost growth and create more jobs.
""We still lack competitiveness in the manufacturing sector. As we still rely on the mining and agricultural sector to attract foreign investment, such destructive protests should be avoided,"" he said.
According to data from business consultant PriceWaterhouse Coopers, the mining sector contributed US$1.6 billion in taxes, and employed more than 37,000 workers, in 2004.
During the same period, the companies allocated Rp 466 billion for community development and $66 million for reclamation projects.
The chairman of House Commission VII on mining, energy and the environment, Agusman Effendi, said public discontent should be resolved by accommodating the people's demands in the proposed mining law, now being deliberated by the House.
""All input, be it on required community development programs, local ownership of shares as well as divestment issues, could be regulated through the law.""
Agusman said all recommendations would be considered before the bill was passed into law.
""I am sure all the politicians have their own representatives on the commission, so they should speak out in the discussions.
