Have you heard anything good lately? Recently, most of the news has been
bad, so bad that readers somewhat tend to ignore the good news. Firstly, let
us see what the bad news actually is.
Last week, government officials in East Java prohibited fishermen to sail as violent weather will cause high tides and heavy rains until the end of February. In the eastern part of the archipelago, villagers in Irian Jaya went to higher ground as seawater engulfed their homes, afraid that a tsunami would follow.
In Jakarta, Telkom’s governing board sent a letter to the government asking permission to increase rates, while according to the media; PLN, state-owned power company is also reported to request for a similar hike in electricity tariffs.
On the economic front, January inflation was ahead of expectation, with the higher price of rice said to be the cause. For the public, more cash is needed not only to buy rice, but also to purchase sugar.
So what is the good news? The Rupiah strengthens against the US dollar, as
foreign portfolios rush into the Indonesian capital market. SBY’s nomination
for the Noble prize (for peace) can also be considered as good news.
On the other hand, some news is quite difficult to comprehend, blurring the
line between good and bad news. Syafruddin Temenggung, former Chairman
of the Indonesian Bank Restructuring Agency (IBRA), was recently named a
corruption suspect by the Jakarta High Court, accused of selling IBRA assets
well below book value, inflicting billions of Rupiah in damages towards
government funds.
Pontjo Sutowo, son of late Ibnu Sutowo (long-time President Director of state-owned oil company, Pertamina, during the early Suharto era), together with Ali Mazi (Governor of South East Sulawesi), were also named suspects by the Attorney General Office in the case of irregular land use permits regarding the Hilton Hotel.
It was also heard that the Finance Director of PLN, Parno Isworo, is under police investigation as a witness in the South Sumatra Borang price markup case. Abdul Latief, a prominent businessman, is also a suspect, in relation to the non-performing loan (from Bank Mandiri) extended to one of his companies, Lativi ,a television broadcaster.
For several years, government after government voiced their efforts to go after
corrupters, yet throughout the years, the results are seldom heard. To be fair,
the current government managed to successfully bring a few people to jail,
in the case of Bank BNI L/C irregularities for example, nonetheless, the success
rate remains low.
The case of several police officers owning bank accounts worth billions of Rupiah, as reported by the media, is still somewhat fresh in our minds. In the end, only one or two officers, with relatively low ranks, were named as suspects in possession of illegal funds amounting to several hundred million rupiah.
The low success rate may be the result of several reasons. The lowest on the list is due to “collusion” between the suspects, police officials, the attorney general and the court office. However, with the existence of the Corruption investigation Agencies (KPK and Tipikor), these officials become
more reluctant to collude, afraid of being caught, unless the payoff is high.
Therefore, we expect this kind of collusion may only occur in cases that involve
large amounts of money.
On the other hand, the office of the attorney general may lack the necessary
skills to handle cases that are rather “technical”, either financially or
transaction wise. For example, the sale of PT Rajawali III, state-owned sugar
manufacturer, that involved Syafruddin Temenggung, may be hard to prove
because as Chairman of IBRA, he has the right to sell any assets below book value as long as the procedures for selling them (transparency, bidding process, etc) are met.
Without the technical know how, it will be hard for the attorney general office
to improve the success rate, especially on cases like Rajawali III, Hotel Hilton
and others. We believe there are shortcuts to increase the success rate. First,
the office can recruit corporate lawyers in its team.
Although sounding like a “brilliant” idea, few problems remain regarding such approach, which is: who will bear their cost? Secondly, the office must be more aggressive to push the law on “whistle blower” or “witness protection” program.
With such law, a whistle blower could reveal all technical aspects regarding the suspect’s wrong doings as well as provide significant evidence. However, the problem (again) rests on the ability of the attorney general’s office to finance such a program, paying the bills and all living costs of the whistle blower.
The government must quickly find solutions to finance these shortcuts if it
expects to improve the success rate. If not dealt with soon, the public will grow
increasingly skeptical. After all, we already have too many bad news, now is the
time to hear more good news.
Source:
NC Securities
08 February 2006
Thursday, February 09, 2006
Heavy Mittal The richest man Americans have never heard of
The Wall Street Journal Europe.
PARIS--Lakshmi Mittal built up the world's biggest steel company--and the third-largest personal fortune of any man--by acquiring mills in the dodgiest of places. He honed his deal-making skills on the frontiers of capitalism: in Indonesia, Kazakhstan, Algeria, the Balkans, often in countries one might need to look up in the very latest atlas. In the past week, however, the 55-year-old Indian mogul has found himself in arguably the most difficult business environment of all--Western Europe.
In terms of political resonance as much as sheer size, Mittal Steel's hostile $24 billion bid for the world's second-largest steelmaker, Luxembourg-based Arcelor, is without precedent in Europe. The prime ministers of France and Luxembourg, jointly and repeatedly--along with politicians across the board--condemned the Indian's gumption and vowed to stop him. Worse were the threats from the unions and Arcelor's chief executive, Frenchman Guy Dollé.
A takeover of Arcelor would take Mr. Mittal a long way toward realizing his vision of a dominant global steelmaker in an industry for decades characterized, and brought low, by fragmentation. To pull it off, Mr. Mittal needs to break an Old World taboo against takeovers, hostile or otherwise, involving a company dear to Continental protectionists' heart. That this task falls to a man born in Rajasthan, and raised in Calcutta, is one of the more delicious gifts of globalization.
Before Arcelor's shareholders get their say on his offer, Mr. Mittal is trying to smooth the way with irate politicians. He spent this week shuttling around European capitals talking up the deal. If it's Tuesday, this must be Luxembourg in the morning and Paris in the afternoon, where I catch him, before a late-evening trip back home to London. "I've been all over, all over, all over, from one meeting to another meeting," he says.
In person, Mr. Mittal hardly looks the brash and aggressive "raider with foreign values" portrayed in Arcelor spin. He says he's relieved to be away from the army of cameramen who've dogged him around Paris the past two days. (The merger has stayed front-page news the whole week in France, home to 30,000 Arcelor workers.) "It has been blown way out of proportion," Mr. Mittal says, slouching in his seat, with more than a hint of an Indian accent. "It should have been a very positive atmosphere. That steel companies are merging should be great news." Is he serious? He claims to be. "We're waiting for Arcelor to begin friendly talks," he says. "We really do not want to work in a confrontational environment." He uses the word "friendly" repeatedly.
Mr. Mittal is disarmingly agreeable, an impression that his staff insists is the real deal. He takes steel seriously and seems to keep his thoughts to himself. The modesty can strike a bit of a false note, if only because anyone who got around corrupt governments to build a metals empire can't lack a thick skin and, shall we say, some flair. When I suggest the nice tycoon image might be the "Indian way," he scoffs, saying, "There is nothing Indian here, there is nothing European here, you have to run a multinational company in a proper fashion with top professionals."
The attacks on him have been vicious. Valery Giscard d'Estaing, the former French president, warned against giving into economic "laws of the jungle." A former French finance minister referred to Mr. Mittal as "an Indian predator," although his company is traded and based in Europe and he hasn't lived in India for 30 years. Mr. Dollé, the Arcelor boss, said Rotterdam-based Mittal Steel is a "company full of Indians" that wants to buy his with "monnaie de singe." The expression means "monopoly money"--Mittal's offer is mostly shares--but the literal translation is "monkey money." That double-entendre wasn't lost on people.
This barbarian at the gate fights back with flattery. "They're all emotional comments . . . absurd and frivolous," says Mr. Mittal. "I know Guy Dollé and he's a very nice gentleman. I respect him and I admire him." He says he hasn't seen the race card played against him for a long time. "In the late '80s, when I bought the first company in Trinidad, I remember the headline was 'An Unknown Indian Takes Over Caribbean IISCOT.' But people started knowing me and today they don't ask who is Lakshmi Mittal. [Nationality] is not an issue globally. I don't think the world is moving in that direction."
Trinidad was the start of an acquisitions spree that catapulted Mr. Mittal into elite business ranks almost overnight. He says it took longer than people imagine. Mr. Mittal was born in a small village in the Indian desert state of Rajasthan, which he suggests may explain his dry character: "My roots are there." His father moved the family to Calcutta, ran a mining concern, and took him on at 16. "He has been my mentor in India and encouraged me to go outside," Mr. Mittal says. In 1976, while in Indonesia to finalize a land sale for the family firm, he convinced his father to help him start a new steel business there. But only in Trinidad, the maiden foray outside of Indonesia, did "I realize that we can turn around these kinds of companies and create value for us."
Not long after came a $2 billion purchase in Mexico, against his father's advice, and an audacious move into Kazakhstan in 1995, when no major steelmaker could stomach the risk or the climate. The Kazakh plant, which employs 50,000, supplies China. At the time of its purchase, Mr. Mittal was the world's 32nd-largest steelmaker. But he has made a simple gamble that low-cost producers can thrive, once made efficient, by selling to growing developing economies that are hungry for steel. Against the grain, Mr. Mittal held that an industry plagued by overcapacity and low prices had hidden value. As other steelmakers were busy retrenching, Mr. Mittal picked up plants in 14 countries, mostly in emerging markets.
"I wouldn't say they're dodgy but they're places that others would not think to go," he concedes. So why did he? "I believed in my people--I believed in our ability to run those operations." Continued family control lets Mr. Mittal, who owns 88% of his firm, take chances that companies with diverse shareholders would never dream of. His only daughter, Vanisha, sits on the board, and his 29-year-old son, Aditya, is the chief financial officer. The ownership structure raises questions about transparency and corporate governance that Mr. Mittal dismisses. He says Mittal shares, if anything, are "always undervalued." If Mittal Steel gets Arcelor, he'll keep 50.1%, and insists on no less.
For years, Mr. Mittal has said that only two or three big players will dominate his industry in the future. He wants to do what Henry Ford did for cars: make Mittal synonymous with steel. "If you look at our customers, they are consolidating," he says. "There are three or five major car companies in the world. If you look at our iron suppliers, there are only three iron suppliers. It is a very natural process. It is more so in the steel industry, which has been very fragmented." Even together, Arcelor-Mittal would still only account for 10% of world steel production. "It's longer to go for us," he says.
The American steel industry was broken up not only along national but state lines. "I gave a speech in '97 in Pittsburgh where I spoke about consolidation and globalization," he says. "It was difficult for my audience to accept it. But three years down the road there were 27 bankruptcies in the United States." In 2004, Mr. Mittal made his breakthrough deal, buying Ohio-based International Steel Group, a hodgepodge of once-proud names like Bethlehem, Weirton and LTV that investor Wilbur Ross put together. Historic highs in steel prices have made Mr. Mittal's strategy look brilliant. The company earned $4.7 billion on $22.2 billion in sales in 2004, the last year for which results are available.
The U.S. purchase turned him into the new Carnegie, the biggest steel producer in the U.S. That year, Mr. Mittal added nearly $19 billion to his net worth. He's doubtless the richest man most Americans have never heard of. Unlike an Ellison or a Trump, Mr. Mittal doesn't court or invite publicity. When I mention in passing his No. 3 spot on the Forbes list (net worth: $25 billion), he smiles sheepishly: "Am I?"
But in Europe, the overtly modest man's lavish tastes garner notice. He owns the world's most expensive private home, a $127 million mansion in London. Nearly two years ago, the British tabloids had great fun with the $60 million wedding thrown for his daughter and a thousand close friends over five days in France. Kylie Minogue and Bollywood stars entertained at the 17th-century Chateau Vaux le Vicomte and other venues. Plenty of moneyed people like to spend it; there's a whiff of condescension in the faux-outrage about this rich Indian's tastes, no? He refuses to talk about it. "We want to keep private everything," he says.
London, a cosmopolitan city as never before, is an ideal base for this poster-magnate of globalization. He says it's well-placed for a geographically diverse operation. But the future, for him, is in the East. He recently started his first business in India. China "is in the same place Japan was in the 1970s," where steel consumption outstrips economic growth as the country builds up infrastructure. Mittal was the first company to take a major stake in a Chinese steel mill, but he suggests further investment can only come once Beijing agrees to open the sector and let marginal producers fail. Of the two Asian powers, only India is politically open. "I don't think democracy has anything to do with business." Is freedom or stability more important? "Most important is growth," he says.
In selling the Arcelor takeover, Mr. Mittal plays to his European audience by stressing the competitive threat from Asia. "If we do not have a strong European base with a global enterprise, we could have an issue from a country like China, and our jobs could be in danger," he says. Together, Mittal-Arcelor would employ 340,000 people and produce 100 million tons of steel, more then the next four companies combined.
The bid did win him some influential friends in France. Jean Arthuis, a former finance minister and senator, met the Indian and liked him. "France has to acknowledge the reality of globalization," he said in widely reported comments. Seeing that Paris lacks the weapons to stop him--the French state no longer owns a stake in Arcelor and leading politicians as well as Mr. Dollé backtracked a bit from their tough talk by yesterday--the markets hope that Mr. Mittal will succeed in slaying the dragon of "economic patriotism" that's spooked away other foreign companies looking for acquisitions. Last year Pepsi backed off from Danone once the French government declared the yogurt-maker a "strategic" national asset.
One rumor sees Wal-Mart buying France's Carrefour. Mr. Mittal is skeptical. "This is a Luxembourg company merging with a Dutch-listed company," he says, referring to his own intra-European, on paper at least, takeover bid. "A Wal-Mart case would be different." In other words, the Yanks are still more despised than any Indian. The knee-jerk hostility to hostile takeovers--in effect, to capitalism itself--seems a Continental trait. "Could be," says Mr. Mittal, only "Arcelor is involved in a hostile takeover in Canada." He laughs, for Mr. Dollé is certainly no innocent: Arcelor last month won a heated battle against a German rival for a $5 billion Canadian steel producer.
Mr. Mittal's own nationality is an elusive target for adversaries. His very business makes a mockery of the old nation-state model. He is nowhere and everywhere. As a sop to the old European way of thinking, Mr. Mittal offered to keep the future headquarters of a combined Mittal-Arcelor back in Luxembourg. "It doesn't matter to me," he says. For in his sort of world, it really doesn't matter.
Source:
MATTHEW KAMINSKI
Editorial page editor
The Wall Street Journal Europe.
Playboy sparks Indonesia porn row
BBC News, Jakarta
Indonesian Muslims are angered by plans for a local edition of Playboy Indonesia, home to the world's largest Muslim population, is caught up in a growing debate about pornography.
News that the raunchy Playboy magazine has signed a deal to produce a local edition has fuelled the controversy.
Parliament is expected to pass a new anti-pornography bill by the middle of this year but the draft legislation is proving divisive.
A series of demonstrations has taken place in the capital, Jakarta, in support of the tightening of the laws.
The head of the parliamentary committee which drafted the new legislation, Balkan Kaplale, said Indonesia was in a state of moral decline. "These are Indonesian magazines," Mr Kaplale said, spreading a selection of pornographic tabloids across the table.
"It is terrible, our poor country. We are a religious people but now Indonesia is third worst in the world for porn after Scandinavia and Russia.
"It is so easily available and it is going unchecked. That is why we need this law," he said.
Booming trade
In a narrow, busy alleyway in Jakarta's Chinatown, there are stalls selling pirated DVDs.
New laws would make it an offence to show 'sensual body parts'
In front of most of the stalls there is a cardboard box where the pornographic films are kept.
The DVDs are openly displayed - it is pretty graphic stuff.
Few people in Indonesia would argue against the need to control the sale of such material. And yet the proposed anti-pornography bill has come up against strong opposition.
The draft document includes articles which would make it an offence to show what it calls sensual body parts, including the navel, hips and thighs.
Those found guilty of breaking the law could face a two-year jail sentence.
Drawing the line
Husna Mulya, a women's rights activist, said the anti-pornography law had been hijacked by groups pushing a hardline conservative agenda.
"The people behind this are using religious values to make their argument, especially Muslim groups. It is not stated in the bill, but the standard being used is the standard of Sharia law.
"They say people are not dressing in line with Indonesian culture. But the fashion in Indonesia now is to wear trousers that are tight around the hips, and even traditional clothes are often designed to show off a woman's breasts," she said.
And it is not just women who are worried.
The artistic lobby is up in arms as well. The draft bill would make it illegal to record anything which portrays erotic dancing, or kissing on the lips. It would mean ground-breaking Indonesian films such as Arisan would be banned.
Arisan is a humorous take on the life of wealthy, 30-something Jakartans which addresses traditionally taboo subjects like adultery and homosexuality.
The screenplay was written by one of Indonesia's leading film critics, Joko Anwar.
The issue is where to draw the line on decency
He said the anti-pornography bill was a dangerous and unnecessary form of artistic censorship that would hamper filmmakers' creativity.
"We are not going to make some very graphic sexual scenes because we know that it wouldn't be accepted by an Indonesian audience.
"We already have that filter ourselves so I don't think it needs to be put into law. It's not democracy. It's not about pornography, it's your freedom to express yourself," he said.
This is the crux of the current argument. How far should such freedoms be extended?
The consensus in parliament is such that the anti-pornography bill will almost certainly be passed.
The question then becomes how it will be interpreted and enforced by a notoriously corrupt legal system.
But it is perhaps an encouraging sign of Indonesia's growing democratic maturity that a piece of draft legislation is being debated in public at all.
Source:
Rachel Harvey
BBC News, Jakarta
Indonesian Muslims are angered by plans for a local edition of Playboy Indonesia, home to the world's largest Muslim population, is caught up in a growing debate about pornography.
News that the raunchy Playboy magazine has signed a deal to produce a local edition has fuelled the controversy.
Parliament is expected to pass a new anti-pornography bill by the middle of this year but the draft legislation is proving divisive.
A series of demonstrations has taken place in the capital, Jakarta, in support of the tightening of the laws.
The head of the parliamentary committee which drafted the new legislation, Balkan Kaplale, said Indonesia was in a state of moral decline. "These are Indonesian magazines," Mr Kaplale said, spreading a selection of pornographic tabloids across the table.
"It is terrible, our poor country. We are a religious people but now Indonesia is third worst in the world for porn after Scandinavia and Russia.
"It is so easily available and it is going unchecked. That is why we need this law," he said.
Booming trade
In a narrow, busy alleyway in Jakarta's Chinatown, there are stalls selling pirated DVDs.
New laws would make it an offence to show 'sensual body parts'
In front of most of the stalls there is a cardboard box where the pornographic films are kept.
The DVDs are openly displayed - it is pretty graphic stuff.
Few people in Indonesia would argue against the need to control the sale of such material. And yet the proposed anti-pornography bill has come up against strong opposition.
The draft document includes articles which would make it an offence to show what it calls sensual body parts, including the navel, hips and thighs.
Those found guilty of breaking the law could face a two-year jail sentence.
Drawing the line
Husna Mulya, a women's rights activist, said the anti-pornography law had been hijacked by groups pushing a hardline conservative agenda.
"The people behind this are using religious values to make their argument, especially Muslim groups. It is not stated in the bill, but the standard being used is the standard of Sharia law.
"They say people are not dressing in line with Indonesian culture. But the fashion in Indonesia now is to wear trousers that are tight around the hips, and even traditional clothes are often designed to show off a woman's breasts," she said.
And it is not just women who are worried.
The artistic lobby is up in arms as well. The draft bill would make it illegal to record anything which portrays erotic dancing, or kissing on the lips. It would mean ground-breaking Indonesian films such as Arisan would be banned.
Arisan is a humorous take on the life of wealthy, 30-something Jakartans which addresses traditionally taboo subjects like adultery and homosexuality.
The screenplay was written by one of Indonesia's leading film critics, Joko Anwar.
The issue is where to draw the line on decency
He said the anti-pornography bill was a dangerous and unnecessary form of artistic censorship that would hamper filmmakers' creativity.
"We are not going to make some very graphic sexual scenes because we know that it wouldn't be accepted by an Indonesian audience.
"We already have that filter ourselves so I don't think it needs to be put into law. It's not democracy. It's not about pornography, it's your freedom to express yourself," he said.
This is the crux of the current argument. How far should such freedoms be extended?
The consensus in parliament is such that the anti-pornography bill will almost certainly be passed.
The question then becomes how it will be interpreted and enforced by a notoriously corrupt legal system.
But it is perhaps an encouraging sign of Indonesia's growing democratic maturity that a piece of draft legislation is being debated in public at all.
Source:
Rachel Harvey
BBC News, Jakarta
House told to stay out of tolls
Anxious to interest wary investors in the infrastructure sector, Toll Road Regulatory Authority (BPJT) director Hisnu Pawenang has called on the House of Representatives to keep out of the toll issue.
Speaking to reporters at the offices of the BPJT on Wednesday, Wisnu said that while legislators had the right to forward their views to the Public Works Ministry, they should not be involved in determining the actual amount of toll increases.
"According to the prevailing regulations, tolls are supposed to be increased every two years. This mechanism must be upheld," he was quoted as saying Wednesday by Antara.
Tolls need to be increased periodically, in line with the regulations, to allow firms to accurately calculate the likely returns on their investments, Hisnu said.
"We want to create a healthy climate in the toll road sector. Only with a better investment climate will new investors put their money into turnpike projects," he said.
He said the 26 percent toll increase for turnpikes in Greater Jakarta that had been proposed by the BPJT to the Public Works Ministry was in line with the inflation rate recorded by the Central Statistics Agency.
"It is bit high due to the fact that inflation was higher than normal in November as a result of the increase in fuel prices in October," he explained.
Tolls, except for those on the Jakarta-Cikampek turnpike, have not been increased for nine years, he added. "So, the proposed toll increase is fair," he said.
Source:
The Jakarta Post
Speaking to reporters at the offices of the BPJT on Wednesday, Wisnu said that while legislators had the right to forward their views to the Public Works Ministry, they should not be involved in determining the actual amount of toll increases.
"According to the prevailing regulations, tolls are supposed to be increased every two years. This mechanism must be upheld," he was quoted as saying Wednesday by Antara.
Tolls need to be increased periodically, in line with the regulations, to allow firms to accurately calculate the likely returns on their investments, Hisnu said.
"We want to create a healthy climate in the toll road sector. Only with a better investment climate will new investors put their money into turnpike projects," he said.
He said the 26 percent toll increase for turnpikes in Greater Jakarta that had been proposed by the BPJT to the Public Works Ministry was in line with the inflation rate recorded by the Central Statistics Agency.
"It is bit high due to the fact that inflation was higher than normal in November as a result of the increase in fuel prices in October," he explained.
Tolls, except for those on the Jakarta-Cikampek turnpike, have not been increased for nine years, he added. "So, the proposed toll increase is fair," he said.
Source:
The Jakarta Post
Banks seek greater cost efficiencies by pooling ICT resources
To help improve service quality and efficiency in the information and communications technology (ICT) field, the country's banks are making plans to share ATM technology and selected data warehouses.
The banks are currently discussing arrangements that would allow both small and large banks to collaborate in the ICT field in the coming years.
It is hoped a blueprint for the program will be completed before the Asia Pacific Conference and Exhibition on Banking Technology (Apconex) 2006, which will be held by the Federation of Private Domestic Banks in Jakarta from May 9 through May 11.
"We really need better banking technology arrangements. Banks can't go on procuring IT on their own because the cost is prohibitive," said APCONEX steering committee chairman Jos Luhukay on Tuesday, adding that ATM and similar technologies were costly for banks in a developing country like Indonesia.
The high cost of banking technology, he said, has resulted in a great discrepancy in terms of cost efficiency between small and large banks.
Banks with small customer bases suffer from high ATM transaction costs, while the ATM cost per transaction of the larger banks is very low.
"The price of an ATM here is the same as in the United States, but the transaction values are different," said Jos, who is also the president of Bank Lippo.
He therefore believes Indonesia's banks would be better off pooling their resources in the technological field.
"We would then need an independent institution to oversee implementation," he said, adding that issues such as the institution's legal basis and structure would be discussed during the conference.
Surveyor International Data Corporation reported recently that Indonesia's total spending on ICT last year reached US$2.28 billion, of which 45 percent, or $1.02 billion, emanated from the banking sector.
Jos forecast that the figure this year would increase by 15 percent to $1.17 billion. "This spending needs to be directed at ensuring an effective and efficient national banking technology structure," he said.
The chairman of the Apconex 2006 organizing committee, Eko Indrajit, said the conference would be attended by 700 bankers, consultants, banking sector regulators, academics and ICT providers.
Source:
The Jakarta Post, Jakarta
Indonesia is considering repaying part of IMF loans early
JAKARTA (Bloomberg): Indonesia is considering paying part of the money it owes to the International Monetary Fund ahead of schedule, Minister of Finance Sri Mulyani Indrawati said in a report to Parliament.
"The finance ministry and the central bank are studying the possibility to accelerate repayment to the IMF with an amount of as much as US$8 billion," Sri Mulyani said on Thursday in a report. No details were provided.
Source:
Bloomberg
"The finance ministry and the central bank are studying the possibility to accelerate repayment to the IMF with an amount of as much as US$8 billion," Sri Mulyani said on Thursday in a report. No details were provided.
Source:
Bloomberg
Vietnam's PM to visit Indonesia this month
HANOI (AP): Prime Minister Phan Van Khai will be heading to Indonesia later this month on a three-day formal visit, the Foreign Ministry said Thursday.
Ministry spokesman Le Dung said Khai is going to Jakarta Feb.22-24 at the invitation of Indonesian President Susilo Bambang Yudhoyono.
His trip is intended to promote further cooperation between Vietnam and Indonesia, particularly in the areas of trade and investment, Dung said.
Khai is also expected to meet with Indonesia's parliament speaker and attend a business forum during his visit.
Source:
AP
Ministry spokesman Le Dung said Khai is going to Jakarta Feb.22-24 at the invitation of Indonesian President Susilo Bambang Yudhoyono.
His trip is intended to promote further cooperation between Vietnam and Indonesia, particularly in the areas of trade and investment, Dung said.
Khai is also expected to meet with Indonesia's parliament speaker and attend a business forum during his visit.
Source:
AP
Emil Salim, Indonesian environmentalist wins world prize
JAKARTA, Feb. 9 (Xinhuanet) -- Indonesia's first environment minister, senior economist Emil Salim, has been named the winner of the 100,000 U.S. dollars Zayed International Prize for the Environment for his role in promoting conservation, reports said Thursday.
He shared the award with Angela Cropper, the president of the environmental Cropper Foundation of Trinidad and Tobago. They each received a 100,000 U.S. dollars cash prize, said daily The Jakarta Post.
Emil won the award's third category of Environmental Action Leading to Positive Change in Society.
The organizers said he received the award for his many years of high-level work in environmental organizations, including the United Nations Environment Program and the World Bank.
The prizes were presented during the Ninth Special Session of the UNEP Global Ministerial Environment Forum in Dubai, which runs from Tuesday to Thursday this week
Sources:
Xinhuanet
The Jakarta Post
He shared the award with Angela Cropper, the president of the environmental Cropper Foundation of Trinidad and Tobago. They each received a 100,000 U.S. dollars cash prize, said daily The Jakarta Post.
Emil won the award's third category of Environmental Action Leading to Positive Change in Society.
The organizers said he received the award for his many years of high-level work in environmental organizations, including the United Nations Environment Program and the World Bank.
The prizes were presented during the Ninth Special Session of the UNEP Global Ministerial Environment Forum in Dubai, which runs from Tuesday to Thursday this week
Sources:
Xinhuanet
The Jakarta Post
British PM to visit Indonesia
JAKARTA, Feb. 9 (Xinhuanet) -- British Prime Minister Tony Blair is slated to visit Indonesia in March, making him the first British leader to travel here since Margaret Thatcher in 1985, an Indonesian official has said.
"It is scheduled for Prime Minister Blair to visit the country next month. However, we haven't accepted any official agenda for the visit," presidential spokesman Dino Patti Djalal was quoted Thursday by The Jakarta Post as saying.
He could not specify the exact date, saying only that preparations for the visit as well as for the issues to be discussed were still being coordinated by the related ministries.
Although the agenda of the state visit is still tentative, several Presidential Palace sources said it was likely to include discussion of counterterrorism efforts as well as cooperation in investment and trade.
According to the sources, the visit will probably take place on March 29-30, before Blair continues on a trip to Australia.
British Embassy press official Edith Loupatty said the embassy could not make a statement yet about the visit.
Blair's visit may be tied to his country's effort to cooperate more closely with strategic and influential Muslim nations like Indonesia in combating terrorism, an issue that has affected both countries in recent months.
London was rocked by deadly coordinated terrorist attacks during morning rush hour on July 7 last year, with 52 people killed and more than 700 injured.
Three months later, Indonesians were shocked by the second terrorist attack on the resort island of Bali, which claimed 23 lives.
Relations between the two countries are also marked by long-standing economic activities. Annual British investment in Indonesia consistently ranks in the top five.
Based on data from the Investment Coordinating Board, investment approvals for British companies last year totaled 1.52 billion U.S. dollars, the second largest amount after Singapore
Source:
Xinhuanet
chinaview
The Jakarta Post
"It is scheduled for Prime Minister Blair to visit the country next month. However, we haven't accepted any official agenda for the visit," presidential spokesman Dino Patti Djalal was quoted Thursday by The Jakarta Post as saying.
He could not specify the exact date, saying only that preparations for the visit as well as for the issues to be discussed were still being coordinated by the related ministries.
Although the agenda of the state visit is still tentative, several Presidential Palace sources said it was likely to include discussion of counterterrorism efforts as well as cooperation in investment and trade.
According to the sources, the visit will probably take place on March 29-30, before Blair continues on a trip to Australia.
British Embassy press official Edith Loupatty said the embassy could not make a statement yet about the visit.
Blair's visit may be tied to his country's effort to cooperate more closely with strategic and influential Muslim nations like Indonesia in combating terrorism, an issue that has affected both countries in recent months.
London was rocked by deadly coordinated terrorist attacks during morning rush hour on July 7 last year, with 52 people killed and more than 700 injured.
Three months later, Indonesians were shocked by the second terrorist attack on the resort island of Bali, which claimed 23 lives.
Relations between the two countries are also marked by long-standing economic activities. Annual British investment in Indonesia consistently ranks in the top five.
Based on data from the Investment Coordinating Board, investment approvals for British companies last year totaled 1.52 billion U.S. dollars, the second largest amount after Singapore
Source:
Xinhuanet
chinaview
The Jakarta Post
Inside a Lost World
Researchers find birds of paradise, strange frogs and enormous flowers in New Guinea
More than 25 years ago, Bruce Beehler, an expert on birds of paradise, started planning a trip to the Foja Mountains of western New Guinea.
Last November, he finally got there -- and the trip was worth the wait.
During a 15-day expedition in December, the researchers found hundreds of rare birds, more than 20 new species of frogs, five kinds of previously unknown palms, four new breeds of butterfly, and giant rhododendrons with white blossoms the size of bread plates -- believed to be the largest on record.
All told, the 3,700 square miles of mist-shrouded tropical forest may be the most pristine natural area in Asia and the Pacific, said Conservation International, which organized the expedition with the Biology Research Center of the Indonesian Institute of Science.
"It is as close to the Garden of Eden as you're going to find on Earth," Beehler said.
Under the forest's lush canopy, animals that have been hunted to extinction elsewhere were so plentiful and unused to human contact that they approached the naturalists unafraid, to be handled and photographed.
Blazing trails with pink and yellow flagging tape, the field team spotted 40 rare species of mammals, including six kinds of kangaroo.
They also encountered a bizarre spined, egg-laying, hedgehog-like mammal called the long-beaked echidna -- so docile that the scientists carried them back to camp for study.
Beehler did not discover a new bird of paradise. But he did discover what he thinks is a new bird species, a honeyeater.
Among the rare and previously unknown species of mammals, birds and plants discovered:
- Long-beaked echidna: The largest species of the egg-laying group of primitive mammals called the Monotremes, seen three times during the monthlong expedition and even allowed scientists to pick it up and observe it at their field camp. The enigmatic creature has never reproduced in captivity, and scientists have never seen its eggs.
- Berlepsch's six-wired bird of paradise: Described by indigenous hunters in the 19th century and named for the long wire-like feathers on its head. The team of scientists witnessed a male performing a courting dance and took the first known photograph of the bird.
- Golden-mantled tree kangaroo: An arboreal jungle-dwelling kangaroo new for Indonesia and previously thought to be hunted to near extinction in New Guinea.
- Honeyeater bird: The honeyeater, with a bright orange face-patch and a pendant wattle under each eye, is believed to be the first new bird species discovered on New Guinea island since 1939.
- Golden-fronted bowerbird: First known photograph of the bird described in 1895 by Lord Walter Rothschild, based on trade skins collected in an unknown location of western New Guinea.
- Rhododendron: Largest known rhododendron on record, measuring 5 7/8 inches across the face of the flower.
- New species: Four new butterfly species, more than 20 new species of frogs, and a series of undescribed plant species, including five species of palms.
Source:
Detroit News Wire
Indonesia Expects Overseas Investment to Increase 12% This Year
(Bloomberg) -- Indonesia's government forecasts overseas investment will probably increase 12 percent this year and help spur growth in Southeast Asia's biggest economy.
The government expects to attract about $10 billion of overseas investment this year up from $8.9 billion in 2005, according to a document prepared by Indonesia's Investment Coordinating Board and obtained by Bloomberg News. The Board also expects to approve projects valued at about $16 billion this year, the document said.
President Susilo Bambang Yudhoyono's government plans to attract $426 billion of investment by 2009 in a bid to create jobs and lift 40 million people out of poverty. The $258 billion economy may have expanded at its slowest pace in almost four years in the fourth quarter as surging fuel prices and borrowing costs crimped consumption.
``You got 2.5 million people hitting the workforce every year, you haven't had any net job creation for eight years,'' Michael Chambers, head of research at CLSA Ltd. in Jakarta, said in an interview. ``You have to find jobs for 20 million people, I don't know how you do that with local investment. The math is pretty compelling. You have to have foreigners.''
The government is counting on an increase in investment to help meet its target of a 6.2 percent gross domestic product growth this year, from an estimated 5.5 percent in 2005.
Economic growth probably slowed to 4 percent to 4.5 percent in the three months to Dec. 31 from a year earlier, the central bank said on Feb. 3. An expansion of 4 percent would be the slowest since the first quarter of 2002.
Economy, Currency
The rupiah plunged to a four-year low against the U.S. dollar on Aug. 30 amid concern rising oil prices may lead to a surge in fuel subsidies and the government's budget deficit. The government's move to double fuel prices in October and six interest-rate increases by the central bank helped it recover.
The rupiah has gained 6 percent against the dollar this year and it the world's second-best performer after the Brazilian real.
Bank Indonesia has increased the rate used as a reference for bill sales to 12.75 from 8.5 percent in July, when it was introduced. That eroded purchasing power in a nation where 126 million people live on under $2 a day.
In January, overseas investment surged 11-fold to $1.31 billion led by investments in paper and pulp and food industries, the investment agency's document said.
Funds flowing into the nation may increase once the government enacts a law that will improve investment procedures. The government may enact the law in March, Muhammad Lutfi, chairman of the Investment Coordinating Board said in Feb. 8 interview in Jakarta.
Investor Conference
The government has delayed a conference meant to attract companies to invest in building roads, ports and power plants to as late as June from February because it wants to pass the law before meeting investors.
Indonesia offered about 91 projects valued at $22 billion at the first such conference held in January last year. Of the total just one project has been completed, while five are being constructed.
The government is completing plans to invite bids for six projects, while it may scrap 19 projects, Suyono Dikun a deputy at the Coordinating Ministry for Economic Affairs said on Dec. 29.
Indonesia needs to simplify its investment rules to compete against region rivals as well as China, which attracted $60 billion of investments in 2005.
Source:
Arijit Ghosh in Jakarta
Bloomberg
The government expects to attract about $10 billion of overseas investment this year up from $8.9 billion in 2005, according to a document prepared by Indonesia's Investment Coordinating Board and obtained by Bloomberg News. The Board also expects to approve projects valued at about $16 billion this year, the document said.
President Susilo Bambang Yudhoyono's government plans to attract $426 billion of investment by 2009 in a bid to create jobs and lift 40 million people out of poverty. The $258 billion economy may have expanded at its slowest pace in almost four years in the fourth quarter as surging fuel prices and borrowing costs crimped consumption.
``You got 2.5 million people hitting the workforce every year, you haven't had any net job creation for eight years,'' Michael Chambers, head of research at CLSA Ltd. in Jakarta, said in an interview. ``You have to find jobs for 20 million people, I don't know how you do that with local investment. The math is pretty compelling. You have to have foreigners.''
The government is counting on an increase in investment to help meet its target of a 6.2 percent gross domestic product growth this year, from an estimated 5.5 percent in 2005.
Economic growth probably slowed to 4 percent to 4.5 percent in the three months to Dec. 31 from a year earlier, the central bank said on Feb. 3. An expansion of 4 percent would be the slowest since the first quarter of 2002.
Economy, Currency
The rupiah plunged to a four-year low against the U.S. dollar on Aug. 30 amid concern rising oil prices may lead to a surge in fuel subsidies and the government's budget deficit. The government's move to double fuel prices in October and six interest-rate increases by the central bank helped it recover.
The rupiah has gained 6 percent against the dollar this year and it the world's second-best performer after the Brazilian real.
Bank Indonesia has increased the rate used as a reference for bill sales to 12.75 from 8.5 percent in July, when it was introduced. That eroded purchasing power in a nation where 126 million people live on under $2 a day.
In January, overseas investment surged 11-fold to $1.31 billion led by investments in paper and pulp and food industries, the investment agency's document said.
Funds flowing into the nation may increase once the government enacts a law that will improve investment procedures. The government may enact the law in March, Muhammad Lutfi, chairman of the Investment Coordinating Board said in Feb. 8 interview in Jakarta.
Investor Conference
The government has delayed a conference meant to attract companies to invest in building roads, ports and power plants to as late as June from February because it wants to pass the law before meeting investors.
Indonesia offered about 91 projects valued at $22 billion at the first such conference held in January last year. Of the total just one project has been completed, while five are being constructed.
The government is completing plans to invite bids for six projects, while it may scrap 19 projects, Suyono Dikun a deputy at the Coordinating Ministry for Economic Affairs said on Dec. 29.
Indonesia needs to simplify its investment rules to compete against region rivals as well as China, which attracted $60 billion of investments in 2005.
Source:
Arijit Ghosh in Jakarta
Bloomberg
Coca-Cola Amatil Profit Up 15%,Costs Worry Market
MELBOURNE (Dow Jones)--Asia-Pacific drinks and food group Coca-Cola Amatil Ltd. (CCL.AU) Thursday said 2005 net profit rose 15%, but the stock dived due to investor concern about rising sugar and aluminum prices.
Coca-Cola, which operates in Australia, Indonesia, South Korea and New Zealand, said annual earnings rose to A$320.5 million from A$276.6 million in 2004.
The results were slightly above consensus estimates, driven by strong earnings from its core beverage brands. But a lower tax rate, comments about higher raw material prices, and a lack of specific 2006 guidance sent the shares 57 cents or 8% lower to A$7.03. The company is about 32%-owned by Atlanta's Coca-Cola Co. (KO).
"Coca-Cola has delivered a strong result for the business against the backdrop of higher cost of goods sold, softer economic conditions and a more competitive marketplace," said chief executive Terry Davis.
Analyst Scott Marshall, head of industrial research at Shaw Stockbroking, said the lack of specific guidance weighed heavily on the stock.
"They were talking about double digit gains in 2005, now they're just talking about solid EBIT (earnings, before, interest and taxes) growth," he said.
Marshall said he also expects Coca-Cola Amatil will need another price increase this year to recover rising costs, despite the company's strong hedging profile.
Revenue rose 18% to A$4.15 billion from A$3.53 million, with strong gains in Indonesia, while Australian volumes were slightly softer.
The company is pinning its hopes of regaining profit momentum in Australia, which generates around half the company's revenues, with the launch of its new sugar-free drink, Coke Zero.
"I think the guts of it is that core volumes in Australia are down 0.3% and that's not a great sign, because that's their driver," a senior institutional trader said.
Davis said the response so far to the launch of Coke Zero, which is primarily aimed at men, had been significantly better than the launch of the vanilla flavored brand and sales indicate the product had "reignited the cola category".
The company said the costs of good sold was expected to increase by 6% to 7% per case of beverages in 2006, and by 6% to 8% for the food business.
The loss-making South Korean business is expected to return to profitability in 2006, driven by growth in the Minute Maid juice brand, after reporting a 2005 EBIT loss of A$6.6 million.
The company, which also produces Mount Franklin bottled water, bought the SPC Ardmona packaged fruit business last February, which contributed A$45.7 million in EBIT in its first 10 months.
Source:
Susan Murdoch,
Dow Jones Newswires
Coca-Cola, which operates in Australia, Indonesia, South Korea and New Zealand, said annual earnings rose to A$320.5 million from A$276.6 million in 2004.
The results were slightly above consensus estimates, driven by strong earnings from its core beverage brands. But a lower tax rate, comments about higher raw material prices, and a lack of specific 2006 guidance sent the shares 57 cents or 8% lower to A$7.03. The company is about 32%-owned by Atlanta's Coca-Cola Co. (KO).
"Coca-Cola has delivered a strong result for the business against the backdrop of higher cost of goods sold, softer economic conditions and a more competitive marketplace," said chief executive Terry Davis.
Analyst Scott Marshall, head of industrial research at Shaw Stockbroking, said the lack of specific guidance weighed heavily on the stock.
"They were talking about double digit gains in 2005, now they're just talking about solid EBIT (earnings, before, interest and taxes) growth," he said.
Marshall said he also expects Coca-Cola Amatil will need another price increase this year to recover rising costs, despite the company's strong hedging profile.
Revenue rose 18% to A$4.15 billion from A$3.53 million, with strong gains in Indonesia, while Australian volumes were slightly softer.
The company is pinning its hopes of regaining profit momentum in Australia, which generates around half the company's revenues, with the launch of its new sugar-free drink, Coke Zero.
"I think the guts of it is that core volumes in Australia are down 0.3% and that's not a great sign, because that's their driver," a senior institutional trader said.
Davis said the response so far to the launch of Coke Zero, which is primarily aimed at men, had been significantly better than the launch of the vanilla flavored brand and sales indicate the product had "reignited the cola category".
The company said the costs of good sold was expected to increase by 6% to 7% per case of beverages in 2006, and by 6% to 8% for the food business.
The loss-making South Korean business is expected to return to profitability in 2006, driven by growth in the Minute Maid juice brand, after reporting a 2005 EBIT loss of A$6.6 million.
The company, which also produces Mount Franklin bottled water, bought the SPC Ardmona packaged fruit business last February, which contributed A$45.7 million in EBIT in its first 10 months.
Source:
Susan Murdoch,
Dow Jones Newswires
Standard & Poor's: Outlook On Indonesia's Sovereign Rating Revised To Positive; Ratings Affirmed
SINGAPORE (Standard & Poor's) Feb. 9, 2006--Standard & Poor's Ratings Services said today it revised its outlook on the sovereign credit ratings for the Republic of Indonesia to positive from stable.
At the same time, Standard & Poor's affirmed its 'B+/B' foreign currency and 'BB/B' local currency sovereign credit rating.
"The outlook revision takes into account the more favorable policy setting that emerged in the wake of significant adjustments in fiscal and monetary policy stance, and the expectation that this will improve deficit and debt ratios further," said Standard & Poor's credit analyst Agost Benard.
Standard & Poor's believes these changes, including the fuel subsidy cuts and a more aggressive monetary policy, combined with a recent change in the government's economic team, will enable the administration to continue improving credit fundamentals of the sovereign, namely, reduce its debt burden and vulnerability to currency weakness. It also reflects the expectation of better policy coordination and implementation, such that future shocks will be tackled in a more timely and appropriate fashion.
Prospects for a more constructive policy environment received a further boost through President Susilo Bambang Yudhoyono's limited but well-targeted cabinet reshuffle in December 2005. Respected technocrats were appointed to the important roles of Economic Coordination Minister and Finance Minister.
These policy shifts helped restore investor confidence in the administration's commitment to responsible macroeconomic management, by demonstrating a capacity and willingness to undertake unpopular measures.
Indonesia's credit rating is supported by improved political and policy climate, continued macroeconomic stability, prudent fiscal management, declining debt and debt-servicing burden, and a favorable external liquidity position. External vulnerability, however, remains high, while structural impediments continue to hamper growth.
The ratings for the sovereign could improve with further progress in microeconomic reforms, together with continued adherence to tight fiscal policies to aid debt reduction and lower the attendant vulnerability posed by its large foreign debt. Demonstrated improvements in the government's administrative and implementation capacity would likewise boost its creditworthiness. Conversely, the positive outlook could come under review should there be slippage or withdrawal from fiscal consolidation and economic reforms, or if policy coordination failures between various parts of the government surface again and constrain timely and appropriate response to emerging macroeconomic challenges.
Source:
Primary Credit Analyst:
Agost Benard, Singapore
Secondary Credit Analyst:
Ping Chew, Singapore
At the same time, Standard & Poor's affirmed its 'B+/B' foreign currency and 'BB/B' local currency sovereign credit rating.
"The outlook revision takes into account the more favorable policy setting that emerged in the wake of significant adjustments in fiscal and monetary policy stance, and the expectation that this will improve deficit and debt ratios further," said Standard & Poor's credit analyst Agost Benard.
Standard & Poor's believes these changes, including the fuel subsidy cuts and a more aggressive monetary policy, combined with a recent change in the government's economic team, will enable the administration to continue improving credit fundamentals of the sovereign, namely, reduce its debt burden and vulnerability to currency weakness. It also reflects the expectation of better policy coordination and implementation, such that future shocks will be tackled in a more timely and appropriate fashion.
Prospects for a more constructive policy environment received a further boost through President Susilo Bambang Yudhoyono's limited but well-targeted cabinet reshuffle in December 2005. Respected technocrats were appointed to the important roles of Economic Coordination Minister and Finance Minister.
These policy shifts helped restore investor confidence in the administration's commitment to responsible macroeconomic management, by demonstrating a capacity and willingness to undertake unpopular measures.
Indonesia's credit rating is supported by improved political and policy climate, continued macroeconomic stability, prudent fiscal management, declining debt and debt-servicing burden, and a favorable external liquidity position. External vulnerability, however, remains high, while structural impediments continue to hamper growth.
The ratings for the sovereign could improve with further progress in microeconomic reforms, together with continued adherence to tight fiscal policies to aid debt reduction and lower the attendant vulnerability posed by its large foreign debt. Demonstrated improvements in the government's administrative and implementation capacity would likewise boost its creditworthiness. Conversely, the positive outlook could come under review should there be slippage or withdrawal from fiscal consolidation and economic reforms, or if policy coordination failures between various parts of the government surface again and constrain timely and appropriate response to emerging macroeconomic challenges.
Source:
Primary Credit Analyst:
Agost Benard, Singapore
Secondary Credit Analyst:
Ping Chew, Singapore
Indonesian Says Waste From Mine Tainted Fish
The New York Times--MANADO, Indonesia, A star government witness in a criminal trial against the American mining giant Newmont told a court on Friday that waste from the company's mine near here was deposited in the sea at too shallow a depth, causing the contamination of fish.
The witness, Masnellyarti Hilman, a deputy environment minister, said elevated levels of arsenic in the fish and the "reduced biodiversity" in the bay near the gold mine demonstrated pollution.
The company vigorously denies the Indonesian government's accusations of pollution and contends that the waste from the mine, near Buyat Bay on the island of Sulawesi, was safely disposed of through a pipe that ran about a half-mile from the shore into the equatorial waters. As soon as Ms. Hilman mentioned pollution, the lead lawyer for the company, Palmer Situmorang, protested to the judge, who ruled that the word should not be used until there was a verdict.
The president of Newmont in Indonesia, Richard B. Ness, who has been charged along with the company, said he rejected Ms. Hilman's argument on the impact of the mine waste. "That has to be left to outside witnesses," Mr. Ness said.
The trial, a rare case of a major American corporation facing criminal charges in a developing country, pits one of Indonesia's valued foreign investors against the nation's little-tested environmental laws. The government took action in 2004 after villagers near the mine complained of tumors, skin rashes and dizziness, for which they blamed the company.
Newmont, a Denver-based corporation and the world's biggest gold producer, has said the illnesses are common to poor coastal communities, and denies responsibility. Most of the villagers, citing fears for their health, moved to another area in Sulawesi last June.
The deputy minister did not make any connection between the contaminated fish and the people's health. She said only that the villagers ate the fish. Experts have said it would be virtually impossible to prove that the mine caused the illnesses.
The chief environmental issue in the trial involves the disposal of the waste, known as tailings, by a method called submarine tailing disposal, which is essentially banned in the United States. Ms. Hilman testified that Newmont's 1993 operational license for the mine called for the company to place the waste below the thermocline, a layer below which water is colder and has less oxygen.
In 1999, she said, a study by the Environment Ministry and the University of Sam Ratulangi here in Manado found that the thermocline was at a depth of 110 meters, or 120 yards. But the company, she said, released the waste from the pipe at a depth of 82 meters, or 90 yards, where the waters were still warm. At that depth the heavy metals in the tailings — arsenic, for one — were able to enter the food chain, she said.
Newmont has consistently argued that the arsenic remained inert and insoluble in the ocean.
Another issue in the trial is the government's accusation that the company did not have the proper permit to dispose of its waste.
Ms. Hilman, who has a degree from a prominent mining school in the United States, the Colorado School of Mines, and is known among the foreign mining companies in Indonesia for being a stickler on pollution, argued that the company had failed to obtain the right permits for toxic waste.
"You can dump waste if you follow the standards and have the permit," Ms. Hilman said.
The company was granted a temporary six-month permit in July 2000 by the environment minister at the time, Sonny Keraf, who told Newmont in a letter that a permanent permit would depend on the company's completing an environmental risk assessment, Ms. Hilman said.
She told the court that Newmont had completed the risk assessment but that it had been rejected by the Environment Ministry because the methodology was faulty.
Source:
JANE PERLEZ
The New York Times
The witness, Masnellyarti Hilman, a deputy environment minister, said elevated levels of arsenic in the fish and the "reduced biodiversity" in the bay near the gold mine demonstrated pollution.
The company vigorously denies the Indonesian government's accusations of pollution and contends that the waste from the mine, near Buyat Bay on the island of Sulawesi, was safely disposed of through a pipe that ran about a half-mile from the shore into the equatorial waters. As soon as Ms. Hilman mentioned pollution, the lead lawyer for the company, Palmer Situmorang, protested to the judge, who ruled that the word should not be used until there was a verdict.
The president of Newmont in Indonesia, Richard B. Ness, who has been charged along with the company, said he rejected Ms. Hilman's argument on the impact of the mine waste. "That has to be left to outside witnesses," Mr. Ness said.
The trial, a rare case of a major American corporation facing criminal charges in a developing country, pits one of Indonesia's valued foreign investors against the nation's little-tested environmental laws. The government took action in 2004 after villagers near the mine complained of tumors, skin rashes and dizziness, for which they blamed the company.
Newmont, a Denver-based corporation and the world's biggest gold producer, has said the illnesses are common to poor coastal communities, and denies responsibility. Most of the villagers, citing fears for their health, moved to another area in Sulawesi last June.
The deputy minister did not make any connection between the contaminated fish and the people's health. She said only that the villagers ate the fish. Experts have said it would be virtually impossible to prove that the mine caused the illnesses.
The chief environmental issue in the trial involves the disposal of the waste, known as tailings, by a method called submarine tailing disposal, which is essentially banned in the United States. Ms. Hilman testified that Newmont's 1993 operational license for the mine called for the company to place the waste below the thermocline, a layer below which water is colder and has less oxygen.
In 1999, she said, a study by the Environment Ministry and the University of Sam Ratulangi here in Manado found that the thermocline was at a depth of 110 meters, or 120 yards. But the company, she said, released the waste from the pipe at a depth of 82 meters, or 90 yards, where the waters were still warm. At that depth the heavy metals in the tailings — arsenic, for one — were able to enter the food chain, she said.
Newmont has consistently argued that the arsenic remained inert and insoluble in the ocean.
Another issue in the trial is the government's accusation that the company did not have the proper permit to dispose of its waste.
Ms. Hilman, who has a degree from a prominent mining school in the United States, the Colorado School of Mines, and is known among the foreign mining companies in Indonesia for being a stickler on pollution, argued that the company had failed to obtain the right permits for toxic waste.
"You can dump waste if you follow the standards and have the permit," Ms. Hilman said.
The company was granted a temporary six-month permit in July 2000 by the environment minister at the time, Sonny Keraf, who told Newmont in a letter that a permanent permit would depend on the company's completing an environmental risk assessment, Ms. Hilman said.
She told the court that Newmont had completed the risk assessment but that it had been rejected by the Environment Ministry because the methodology was faulty.
Source:
JANE PERLEZ
The New York Times
Indonesia Receives U$150 Million Worth in Loan From IDB Annually
Indonesia received at least US$150 million worth in loan from the Islamic Development Bank (IDB) annually, a minister said.Speaking in a hearing with the House`s Commission XI at the parliamentary building here on Wednesday evening, Finance Minister Sri Mulyani Indrawati said IDB provided a mark up (a term used by IDB for interest) of about five to six percent.
The total loan from IDB till December 31, 2005 was recorded at US$344 million, which was used to finance 43 government and private projects, while the amount of loan received from Saudi Fund since 1976 till December 31, 2005 has reached over one billion US dollar, she said.
The minister further pointed out that with a five to six percent mark-up (interest), IDB`s loan was relatively high if compared to such soft loan provided by Japan with interest rate ranging from 1.3 to 1.5 percent. Loan from Japan till now has reached over 50 percent of Indonesia`s total foreign debt, she noted
Source:
Antara
The total loan from IDB till December 31, 2005 was recorded at US$344 million, which was used to finance 43 government and private projects, while the amount of loan received from Saudi Fund since 1976 till December 31, 2005 has reached over one billion US dollar, she said.
The minister further pointed out that with a five to six percent mark-up (interest), IDB`s loan was relatively high if compared to such soft loan provided by Japan with interest rate ranging from 1.3 to 1.5 percent. Loan from Japan till now has reached over 50 percent of Indonesia`s total foreign debt, she noted
Source:
Antara
Toyota Indonesia Eyes 13 Pct Rise in Export Revenue
The Indonesian unit of Japan's Toyota Motor Corp. expects its export revenue to increase 13 percent to around $850 million this year, company data obtained by Reuters showed.
PT Toyota Motor Manufacturing Indonesia's (TMMIN) revenue from exports of vehicles, engines and parts reached $750 million in 2005, almost double a target of $400 million, the data showed.
Toyota, the world's second-largest auto maker, controls 95 percent of TMMIN, with the rest owned by top Indonesian automotive distributor PT Astra International Tbk.
TMMIN exports two multipurpose vehicles, the Avanza and Innova, to the Middle East, South America, and some Asian nations including Malaysia, the Philippines and Thailand.
Its vehicle exports, predominantly in knock-down kit form, accounted for around 85 percent of Indonesia's total automobile export volumes last year.
Analysts and industry executives say increasing exports may cushion automotive companies in Southeast Asia's biggest economy from declining domestic demand for vehicles this year because of high fuel prices and interest rates.
Some have expressed concern that the recent strengthening of the rupiah, which was at its strongest level in a year on Wednesday, could affect exporters, including Toyota.
The rupiah rose to 9,175 to a dollar before slipping to 9,290, but the central bank says there is room for further strengthening of the currency. The monetary authority has said an exchange rate of around 9,400 is ideal for exporters.
Currently, about one of eight vehicles sold by Indonesian firms goes overseas and that number is expected to grow.
TMMIN plans to export 181,250 vehicles this year, more than double last year's 78,352 and 46,550 in 2004. TMMIN also plans to raise its engine exports to 102,000 units from 100,008 last year.
Indonesia's government more than doubled domestic fuel prices in October, a move that triggered inflation rates to six-year highs and bit the auto sector.
Despite posting record domestic sales last year, vehicle sales in December slipped by a third from a year ago -- its weakest showing in four years -- and some expect the unfavorable conditions to continue in the first half.
The country's automotive industry association, Gaikindo, has forecast domestic vehicle sales will fall to 500,000 units this year from nearly 534,000 in 2005.
Astra is controlled by Singapore's Jardine Cycle & Carriage Ltd. and distributes a number of brands including Peugeot, BMW, Isuzu and Daihatsu.
Source:
Harry Suhartono
Reuters
PT Toyota Motor Manufacturing Indonesia's (TMMIN) revenue from exports of vehicles, engines and parts reached $750 million in 2005, almost double a target of $400 million, the data showed.
Toyota, the world's second-largest auto maker, controls 95 percent of TMMIN, with the rest owned by top Indonesian automotive distributor PT Astra International Tbk.
TMMIN exports two multipurpose vehicles, the Avanza and Innova, to the Middle East, South America, and some Asian nations including Malaysia, the Philippines and Thailand.
Its vehicle exports, predominantly in knock-down kit form, accounted for around 85 percent of Indonesia's total automobile export volumes last year.
Analysts and industry executives say increasing exports may cushion automotive companies in Southeast Asia's biggest economy from declining domestic demand for vehicles this year because of high fuel prices and interest rates.
Some have expressed concern that the recent strengthening of the rupiah, which was at its strongest level in a year on Wednesday, could affect exporters, including Toyota.
The rupiah
Currently, about one of eight vehicles sold by Indonesian firms goes overseas and that number is expected to grow.
TMMIN plans to export 181,250 vehicles this year, more than double last year's 78,352 and 46,550 in 2004. TMMIN also plans to raise its engine exports to 102,000 units from 100,008 last year.
Indonesia's government more than doubled domestic fuel prices in October, a move that triggered inflation rates to six-year highs and bit the auto sector.
Despite posting record domestic sales last year, vehicle sales in December slipped by a third from a year ago -- its weakest showing in four years -- and some expect the unfavorable conditions to continue in the first half.
The country's automotive industry association, Gaikindo, has forecast domestic vehicle sales will fall to 500,000 units this year from nearly 534,000 in 2005.
Astra is controlled by Singapore's Jardine Cycle & Carriage Ltd. and distributes a number of brands including Peugeot, BMW, Isuzu and Daihatsu.
Source:
Harry Suhartono
Reuters
Indonesia's Sharia Banks Report Improved NPR Ratio in Q4 2005
The non performing financing (NPF) ratio of sharia banks in the country dropped to 2.8 per cent in the last quarter of last year from 4.7 per cent in the previous quarter.
The decline was attributable to increase in sharia financing and credit restructuring, head of the Sharia banking directorate of Bank Indonesia Harisman told the newspaper Bisnis Indonesia.
Data at the central bank showed that the NPF of sharia banks tended to increase until the third quarter of 2005 from only 2.8 per cent in the first quarter.
The financing to deposit ratio also declined to 97.8 per cent in the fourth quarter from 110.4 per cent in the third quarter as a result of a faster increase in deposit than in financing, Harisman noted.
Source:
Bisnis Indonesia
The decline was attributable to increase in sharia financing and credit restructuring, head of the Sharia banking directorate of Bank Indonesia Harisman told the newspaper Bisnis Indonesia.
Data at the central bank showed that the NPF of sharia banks tended to increase until the third quarter of 2005 from only 2.8 per cent in the first quarter.
The financing to deposit ratio also declined to 97.8 per cent in the fourth quarter from 110.4 per cent in the third quarter as a result of a faster increase in deposit than in financing, Harisman noted.
Source:
Bisnis Indonesia
Purnama says he may quit over Cepu field dispute
Widya Purnama, head of Indonesia's state oil company PT Pertamina, said he will quit unless the company leads the operation of the country's Cepu oil field, which it plans tojointly develop with Exxon Mobil Corp.
"Pertamina should become the operator of Cepu," Purnama told a parliamentary hearing in Jakarta yesterday. "We can jointly operate Cepu in many forms or rotate the operatorship later, but Pertamina should be the leader or I would resign."
The dispute between Exxon and Pertamina over which company will operate Cepu, Indonesia's biggest untapped oil reserves, has stalled its development for four years. The field, located in the border of Central and East Java provinces, may contain as much as 500 million barrels of oil and could add about 18 percent to Indonesia's production.
President Susilo Bambang Yudhoyono wants the companies to start production from Cepu in 2008. Pertamina should become the operator of the field for the first five years and rotate the lead with Exxon every five years, Purnama said. The company wants to operate Cepu to be able to better control costs, he said.
The government wants Pertamina and Exxon, the world's biggest publicly traded oil company, to set up a joint operating unit to make decisions and alternate control of cash flow and fieldoperations, Vice President Jusuf Kalla said on Nov. 28.
Exxon and Pertamina are still in talks, said Maman Budiman, vice president of Exxon's Indonesian unit. "We hope to reach an agreement as soon as possible," he said by telephone today. Lower Costs Exxon has offered Pertamina "key" management positions in a committee that will supervise Mobil Cepu Ltd., a unit Exxon set up to operate Cepu, in a bid to end the dispute,Peter J. Coleman, president of Exxon's Indonesian unit, said on Dec. 12.
The supervisory body will oversee Mobil's work and have the authority to approve budgets and expenditures, he added. Pertamina can drill Cepu at US$4 million for each well, a cost that is a third of that proposed by Exxon, Purnama said.
On Sept. 17, Exxon and Pertamina signed an agreement with the state oil and gas regulator, BPMigas, giving the companies a 30-year license to develop Cepu. The agreement didn't identify theoperator and left the decision to the two companies.
Source:
Bloomberg
"Pertamina should become the operator of Cepu," Purnama told a parliamentary hearing in Jakarta yesterday. "We can jointly operate Cepu in many forms or rotate the operatorship later, but Pertamina should be the leader or I would resign."
The dispute between Exxon and Pertamina over which company will operate Cepu, Indonesia's biggest untapped oil reserves, has stalled its development for four years. The field, located in the border of Central and East Java provinces, may contain as much as 500 million barrels of oil and could add about 18 percent to Indonesia's production.
President Susilo Bambang Yudhoyono wants the companies to start production from Cepu in 2008. Pertamina should become the operator of the field for the first five years and rotate the lead with Exxon every five years, Purnama said. The company wants to operate Cepu to be able to better control costs, he said.
The government wants Pertamina and Exxon, the world's biggest publicly traded oil company, to set up a joint operating unit to make decisions and alternate control of cash flow and fieldoperations, Vice President Jusuf Kalla said on Nov. 28.
Exxon and Pertamina are still in talks, said Maman Budiman, vice president of Exxon's Indonesian unit. "We hope to reach an agreement as soon as possible," he said by telephone today. Lower Costs Exxon has offered Pertamina "key" management positions in a committee that will supervise Mobil Cepu Ltd., a unit Exxon set up to operate Cepu, in a bid to end the dispute,Peter J. Coleman, president of Exxon's Indonesian unit, said on Dec. 12.
The supervisory body will oversee Mobil's work and have the authority to approve budgets and expenditures, he added. Pertamina can drill Cepu at US$4 million for each well, a cost that is a third of that proposed by Exxon, Purnama said.
On Sept. 17, Exxon and Pertamina signed an agreement with the state oil and gas regulator, BPMigas, giving the companies a 30-year license to develop Cepu. The agreement didn't identify theoperator and left the decision to the two companies.
Source:
Bloomberg
Indonesia to repay IMF debts early
The Indonesian government plans to speed up repayment of debts from the International Monetary Fund ( IMF) amounting to some 8 billion U.S. dollars, Finance Minister Sri Mulyani Indrawati said Thursday.
"The Ministry of Finance and Bank Indonesia are working on a plan to accelerate debt repayment to the IMF," the minister said in an open hearing with the House of Representatives' commission nine here.
She did not elaborate further.
The minister said Indonesia didn't take IMF's program loans. The debts taken from the IMF were aimed at strengthening the country's foreign exchange reserves at the central bank, she said.
Indonesia quitted IMF financial assistance during the Megawati Soekarnoputri administration but the international creditor maintained its presence under the post-program monitoring stage.
Source:
Xinhua via COMTEX
"The Ministry of Finance and Bank Indonesia are working on a plan to accelerate debt repayment to the IMF," the minister said in an open hearing with the House of Representatives' commission nine here.
She did not elaborate further.
The minister said Indonesia didn't take IMF's program loans. The debts taken from the IMF were aimed at strengthening the country's foreign exchange reserves at the central bank, she said.
Indonesia quitted IMF financial assistance during the Megawati Soekarnoputri administration but the international creditor maintained its presence under the post-program monitoring stage.
Source:
Xinhua via COMTEX
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