Business

Inco denies contract and
environmental violations

The world’s largest nickel producer, PT International Nickel Indonesia (Inco), denied allegations that it had reneged on a commitment to build more smelters and destroyed protected forests in Sulawesi and reduced workers’ welfare.

Inco said all issues had been resolved legally and in consultation with the government.

Inco’s outgoing president director, Tony Wenas, said that according to the new working contract, the company vowed to build two more smelters in Pomala and Bahodopi in Soroako, South Sulawesi, to generate more jobs and help empower locals in the past three years, but a feasibility study showed that a smelter facility was possible only in Bahodopi.

“It is not true that Inco is not committed to building more smelters. Inco has a strong commitment to generating more job opportunities and helping improve the economy of local people,” he told The Jakarta Post here over the weekend.

Tony said Inco was one of 13 mining companies in Indonesia granted permission by the government to mine in protected forest areas.

“Inco has no other alternative but to carry out open-pit mining because the ore deposits are located only 35 meter under the surface,” he said.

Mining analysts and critics called on the government to unilaterally terminate the working contract with Inco for various violations at its mines in South and Central Sulawesi.

They said the company, which has operated for more than four decades in South Sulawesi, reneged
on its promise to build more smelters, destroyed the environment in Morowali and Luwuk Timur and suspended social security programs for its workers.

Mining analyst Simon Felix Sembiring said Inco broke its promises to build two smelters in Pomala and Bahodopi in 2005 and 2010 respectively, and to hand over 50,000 hectares of its 118,000-hectare concession to locals.

Mining Advocacy Network (Jatam) research manager Andika accused Inco of bribing government officials to turn a blind eye to its violations.

Tony said company directors Fenato and Parulian Marpaung and former directors Claudio Renato Chaves and Ciho Darmawan Bangun were still on trial at East Luwuk District Court for destroying protected forests.

“Let the court determine whether they are guilty,” he said, denying allegations that Inco paid Rp 9 billion (US$1.05 million) in bribes to get the charges dropped.

Inco is focusing on increasing its production capacity to 90,000 metric tons in 2014 and 120,000 tons in 2016 from the current 72,500 tons.

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