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egislators have urged the Forestry Ministry to formally warn PT Freeport Indonesia over its failure to meet regulations over operational permits.

Members of the House of Representatives' Commission IV overseeing forestry, marine, husbandry and agricultural affairs, said the violation may have caused trillions of rupiah in state loss.

"PT Freeport Indonesia has never paid compensation for exploiting conservation forest areas," legislator Erik Satiya Wardhana said in Timika on Thursday.

Citing a 1999 mining law, Erik said that open mining activities could not be conducted in conservation forest areas.

A 2004 regulation-in-lieu-of-law, however, provides exceptions to 13 companies including Freeport, a subsidiary of US-based mining giant Freeport McMoRan Copper & Gold Inc.

He added that it appeared that the company had not obtained the requisite operating license for exploiting the conservation area of Lorentz National Park since the law came into effect in 2004.

The Forestry Ministry is said to have sent a warning letter to the company reminding it over the permit.

Another member of the commission, Markus Nari, urged the ministry to issue a second warning and said if the company ignored the third warning, the ministry would be within its rights to force the company to cease all operations.

Freeport corporate communications manager Budiman Moerdijat told The Jakarta Post in a text message that Freeport respected and upheld all the provisions included in their working contracts.

"We are willing to have and will keep conducting talks with the government regarding the possibility for the company to apply for the license," Budiman wrote.