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BKPM, police team up to support business
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Thomas Lembong, Investment Coordinating Board (BKPM) chairman. (-/-)
D
winad Nusa Sejahtera (DNS), a gold mining firm run by Australian-listed Sumatra Copper and Gold, recently decided to call off its operations in South Sumatra after confronting rampant disturbances from illegal miners.
The management claims the prolonged conflict has created doubt about whether the company can make a profitable investment in the province.
“As we all know, social conflict with illegal miners in the area is a main problem for gold mining firms. Recently, illegal miners created disturbances that made us stop our operations. We’re worried about how we’re going to give yields to our investors,” DNS general manager Leonard Manurung said on Monday during an investor’s forum organized by the Investment Coordinating Board (BKPM) and the National Police.
Apart from social conflict, businesspeople also see security issues as factors that discourage the expansion of investment in the country. Violent labor strikes in Batam, Riau Islands, for instance, have hampered the investment climate in the area and a number of foreign firms reportedly pulled out of their investments in Riau Islands due to severe disruptions to their production facilities.
BKPM data shows that over 60 projects worth Rp 342 trillion (US$26 billion) had to be delayed over the past few years due to security issues.
With this in mind, the BKPM and the National Police are teaming up to tackle the problem. On Monday, the latter passed a working guideline titled “Coordination for Protection and Security for Businesses to Support Investment in Indonesia” to the BKPM as proof of its commitment to help maintain a healthy investment climate in the country.
Coordination between the institutions will take place across the 10 provinces that attracted the largest number of realized investments over the past few years. The regions are Jakarta, Banten, West Java, Central Java, East Java, North Sumatra, South Sumatra, Riau Islands, East Kalimantan and South Sulawesi.
The coordination will allow regional BKPMs as well as industrial estates and local police forces to exchange data and information to solve existing problems as quickly as possible.
In following up conflicts involving businesses and illegal miners, National Police chief Gen. Tito Karnavian, for example, instructed regional police chiefs to arrest the financiers of the illegal miners, instead of the workers, to deal with the matter effectively.
“The principle in dealing with these illegal gold miners is how to weaken their financiers, those who pay them. Arresting the miners will only create social conflict,” he said.
“However, the problem is that these financiers have lobbied here and there [with various officials] to gain protection. But we still need to get them,” he added.
Indonesian Industrial Estate Association (HAKI) general chairman Sanny Iskandar applauded the joint commitment, while acknowledging the possibility of workers’ strikes over the coming weeks as many regions begin to negotiate new minimum wages.
“Workers will be forced by certain parties to join in demonstrations to increase their minimum wage to an unreasonable level. We hope the police can intensify supervision in areas where coercion is rampant,” he said.
BKPM head Thomas Lembong said with stronger cooperation with the police, the board hopes to see the delayed projects begin their operations soon. The BKPM hopes to achieve an investment target of Rp 594.8 trillion this year, Rp 298.1 trillion of which was realized last semester.
