Inco Facing Lawsuit for Back Rent In Sulawesi

Posted on Oktober 29, 2010

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Kendari, Southeast Sulawesi. Jakarta Globe. October 17, 2010.

The regional government of Southeast Sulawesi says it plans to sue one of Indonesia’s biggest mining companies for its past failures to pay rent on a nickel field in the province.

Regional Governor Nur Alam on Sunday revealed the plan to take International Nickel Indonesia (Inco) to court. “The company has occupied more than 62,000 hectares of nickel field in this area based on a working contract since 1968, but has not made any contributions to improve the community’s welfare,” he said.

According to Nur, the first stage of Inco’s working contract was set to end in 1996, but the company extended it in 1992. The second stage of the contract is due to end in 2018.

For more than its first two decades of control of the field, the governor said, Inco did not pay its annual rental cost of $1 per hectare. “The company only started to pay the rental cost after it extended the working contract in 1992,” he claimed. He said Southeast Sulawesi would sue Inco for the unpaid rent.

In addition to seeking compensation, the Southeast Sulawesi government also plans to ask Inco to release the whole area so that other companies can use it. “If that nickel field was being utilized, Southeast Sulawesi would get outstanding revenue and would be able to improve community welfare,” Nur said.

The governor said the plan to take Inco to court had already been approved by President Susilo Bambang Yudhoyono.

“Mr. President asked me to prepare all the data and proof of neglect by Inco for court, and we have prepared all that,” he said.

Inco did not issue a statement on Sunday, and Inco communications director Janus Siahaan did not respond to inquiries from the Jakarta Globe.

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