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Coal producers agree to soon pay royalties, fines
Five coal producers accused of withholding royalties have agreed to pay all their disputed debts to the state before the year ends, including the large penalties some may receive, an official said on Friday
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Five coal producers accused of withholding royalties have agreed to pay all their disputed debts to the state before the year ends, including the large penalties some may receive, an official said on Friday.
Soepomo, a director at the finance ministry, said the executives from these five companies had signed an agreement stating they would pay their entire obligations arising from an ongoing audit by the State Development Finance Controller (BPKP).
The agreement led to the revocation of a travel ban on 12 executives from the five companies.
"Whatever the audit's result, they have agreed to pay all their obligations, including the fines. They will pay all of them at least within one month after BPKP announces its audit results," said Soepomo.
BPKP is expected to complete its investigation in mid November, according to BPKP deputy Binsar H. Simanjuntak.
In August, the government banned 14 executives from six coal companies from traveling overseas over allegations that their companies had evaded royalty payments between 2001 and 2007 amounting to Rp 7 trillion (US$769 million).
The six are PT Kideco Jaya Agung, PT Kaltim Prima Coal, PT Kendilo Coal Indonesia, PT Arutmin Indonesia, PT Berau Coal and PT Adaro Indonesia.
The travel ban on two of Kendilo's executives were yet not revoked by the government, as the company did not sign the agreement.
Previously and repeatedly, the six companies defended their decision not to pay the royalties, saying the government had not reimbursed value-added tax (VAT) payments that they were entitled to as stipulated by their contracts.
To settle the dispute, the government and the companies have agreed to return to the so-called first-generation work contracts, signed between 1979 and 1980.
Energy and Mineral Resources Minister Purnomo Yusgiantoro said on Aug. 25 that such contracts required the producers to pay 2 percent interest on overdue royalty payments every month until all payments are settled.
He, however, refused to mention the amount of fines in this case, saying that this would be determined by the BPKP's audit.
The companies will also be obliged to pay sales tax from 1983 onward.
Supriatna Suhala, executive director of the Indonesian Coal Mining Association (ICMA), said the companies actually intended to pay these taxes, but they just did not know how to do so as the post for this payment was no longer available at the tax office.
"I think the government needs to learn a very good lesson from this case. It must improve coordination between its agencies," Supriatna said.
Energy and Mineral Resources Ministry Purnomo Yusgiantoro said in Bandung, West Java that the government would open a post for sales tax payments immediately after BPKP finished its audit.
-- Yuli Tri Suwarni contributed for the report from Bandung
