AUSTRALIA: Government Embarrassed for Seeking Support for Illegal Mine

By IPS Correspondents Reprint | | Print |

Bob Burton

CANBERRA, Mar 1 2004 (IPS) - -The Australian government has been embarrassed by revelations by Indonesian government officials that an Australian-owned mining company operating in a protected forest does not have legal permission for its mine.

For the last four years the Australian embassy in Jakarta has spearheaded a lobbying campaign, at the request of Australian mining companies, aimed at persuading the Indonesian parliament to revoke legislation banning open cut mining in Indonesia’s protected forests.

More recently controversy has engulfed the Melbourne-based Newcrest Mining, which has an 82.5% stake in PT Nusa Halmahera Minerals, which has developed a gold mine in the Toguraci protected forest on the Indonesian island of Halmahera despite the legislation.

Last week, Indonesian government officials from both the forestry department and the mining and energy ministry told ‘The Australian’ newspaper that Newcrest does not have legal permission to operate its mine in a protected forest.

Boen Purnama, planning division chief at the Indonesian forestry department, said the company had no permit to operate and any application would be rejected because of the ban on mining in protected forests.

The head of the mineral and coal enterprises sub-directorate in the Indonesian geology and mineral resources ministry, Bambang Gatot Ariyono, was more optimistic that the company would be given permission if parliament decided to lift the ban. However, he told the newspaper, that as far as he knew the company had not been issued with an operating permit.

Asked about the revelations that the mine was operating illegally, the department of foreign affairs and trade here insists it is adopting a hands-off approach. ”Clarification of the legal position is the responsibility of the Government of Indonesia,” a departmental spokeswoman said.

While the department is now seeking to distance itself from the controversy, it has until recently championed Newcrest’s case with Indonesian officials. However, on February 10, Alexander Downer, minister for foreign affairs and trade, confirmed in an answer submitted to the Senate that embassy officials have raised the ban on open cut mining in protected areas with Indonesian officials.

”Officials have raised the potential implications, both for Australian companies and the Indonesian economy, of the continuing lack of investment in the mining sector,” Downer told parliament.

On at least nine occasions in recent years, Australian embassy officials have pressed Indonesian government ministers and officials to drop the ban on mining in protected areas that are excluded from open cut mining under the provisions of the 1999 Forestry Act.

When 156 companies sought exemption from the law, the Indonesian government ministers baulked and selected 22 companies they considered merited exemption. However, a strong campaign by community organisations has resulted in a stalemate, with the Indonesian Parliament so far refusing to change the law.

Downer also revealed that in June 2002 Australian embassy officials and the Indonesian national operations manager from Newcrest had met with senior officials from the department of forestry to raise concerns about a number of Australian mining projects affected by the ban on mining in protected forests.

The projects included BHP-Billiton’s Gag Island nickel project, Weda Bay Minerals’ proposed nickel mine at Weda Bay which is also on Halmahera island.

The controversy over Australian companies mining in protected forests gained international attention in early January when traditional landowners opposing the gold mine were violently attacked by Indonesian paramilitary forces paid by the company.

Last Friday the Indonesian national commission on human rights (Komnas HAM) decided to dispatch a team to undertake a field investigation into abuses against the mine opponents and the killing of 30-year-old community activist, Rusli Tungkapi, by a Brimob commander.

While their lobbying on behalf of an illegal mining operation has embarrassed embassy officials, the company is pressing ahead undeterred. Newcrest managing director Tony Palmer boasted to a meeting announcing its financial results in Melbourne last Friday, that it was currently pouring gold from the project.

Palmer also claimed that problems in Indonesia at the Toguraci mine had been exaggerated. ”We remain convinced that there are no problems with permits and they are all in place,” he said.

Palmers reassurances, however, contradicted the statement by Newcrest spokesman only days earlier that the company was waiting for the two Indonesian agencies to resolve their differences and issue a mining permit.

In May 2003 Newcrest successfully pressed the ministry of forests for a temporary exemption from the ban open-cut mining in protected forests in the expectation that the Indonesian Parliament would soon weaken the law.

While the general manager of corporate affairs for Newcrest, Peter Reeve, acknowledges the exemption expired in June 2003, he claims support from the government mining department means the company doesn’t need to wait to see if the Indonesian Parliament overturns the ban on mining in protected forests.

Spokesman for the Sydney-based watchdog group, the Mineral Policy Institute, Igor O’Neill, who visited the mine’s site late last year, argues that the provisions of the mining contracts warn that legislation affecting the company may change.

Nor, he argues, is there the legal power for Newcrest to gain an exemption or claim that provisions banning open-cut mining in a protected forest are overridden.

”The mines operation is, therefore, unambiguously in violation of Article 38(4) (of the Forestry Act). The Act contains no provisions, which would allow the restrictions of Article 38(4) to waived under any conditions. No permits issued by the Forestry Minister, Mining Minister, President or others have the authority to waive the provisions of Article 38(4), nor of Article 19,” he wrote in a legal analysis of Newcrest’s claims.