Indonesia revokes gold mine, plantation permits after floods
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The authorities said they were probing 31 land-right holders for any role their operations may have played in floods and landslides in northern Sumatra.
PHOTO: AFP
JAKARTA – Indonesia will revoke permits held by 28 resource companies, including one of the country’s largest gold miners, after authorities linked their alleged forest misuse to floods that killed more than a thousand people in Sumatra in December.
The permits span a wide range of land uses – like logging, pulpwood plantations, mining and hydropower – and cover more than a million hectares, according to a government presentation on Jan 20.
The companies were found to have violated laws governing activities in forest areas, State Secretary Prasetyo Hadi told reporters.
The revocations affect several well-known companies in the region, including PT Agincourt Resources which owns the major Martabe Gold Mine and is part of the Astra International conglomerate.
Pulp producer PT Toba Pulp Lestari, founded by billionaire Sukanto Tanoto, will also have its permits rescinded.
The move mirrors a broader crackdown by President Prabowo Subianto against alleged malfeasance in the natural resources sector, which is largely owned by the nation’s elite businessmen.
The government has already seized parts of lucrative nickel and coal mines, as well as more than 4 million hectares of palm oil plantations which have been consolidated under state control.
Shares of PT Astra International, which owns Agincourt through listed subsidiary PT United Tractors, fell as much as 13 per cent on Jan 21.
Trading in Toba Pulp Lestari shares has been suspended since Dec 17 after the government halted the company’s operations pending an audit into its potential role in the floods.
Toba Pulp Lestari said on Jan 21 it was still awaiting official clarification in the form of a written decision from the government, and that it continues to carry out essential operational activities, asset maintenance and forest area security.
Agincourt did not immediately reply to a request for comment.
The majority – 22 permits – cover a wide variety of operations in natural forests and plantation areas spanning about one million ha, late on Jan 20.
The remaining six relate specifically to mining, plantations and timber-extraction activities.
In December, the authorities said they were probing 31 land-right holders for any role their operations may have played in floods and landslides that devastated three provinces
Around 900,000ha of the seized land will be designated for restoration to conservation forest, including nearly 82,000ha within Tesso Nilo National Park in Riau province, Mr Prasetyo said.
The Environment Ministry recently said it was suing six companies for more than US$280 million (S$360 million) for allegedly causing massive environmental damage in North Sumatra province.
Environmental group WALHI North Sumatra said the revocations must be followed by a halt to new permits in the same areas, warning against granting licences to the affected companies or others with similar operations.
The group also urged the authorities to impose strict sanctions, saying renewed licensing would only perpetuate environmental damage. BLOOMBERG
