Jakarta (ANTARA News) - The `dispute` between the finance minister and the House about the party most eligible to purchase shares to be divested by PT Newmont Nusa Tenggara (NNT) is expected to be solved after the law and human rights minister issues a legal opinion.

"We will wait for the legal opinion of the ministry of law and human rights," Energy and Mineral Resources Minister Jero Wacik said here on Wednesday after he had decided to leave the issue to the Law and Human Rights Ministry.

The local government of West Nusa Tenggara (NTB) has been struggling for the right to purchase seven percent of PT NNT shares in the last phase of a mandatory divestment process although Finance Minister Agus Martowardojo wanted the government to buy the stock through the Government Investment Center (PIP).

Earlier, the House of Representatives (DPR)`s Commission XI on financial affairs said it would summon the finance minister about the government`s decision to purchase the seven percent stake in NNT.

"The finance minister will be summoned as soon as possible to cancel the government`s plan to purchase the NNT divestment shares," said Commission XI Deputy Chairman Harry Azhar Azis.

A mining observer even suggested that the government cease its efforts to acquire the NNT stake and sit together with all parties involved to discuss the problem.

"I think all parties involved should sit together to discuss the problem and try to reach a new agreement," Khomaidi, a mining observer, who is also deputy director of the Reforminer Institute, said.

The parties involved are the government, NNT, the Government Investment Center (PIP), the finance ministry, the House of Representatives (DPR), and the State Audit Board (BPK) which audited the process the government had initiated to buy MNT shares. The State Audit Board (BPK) in its opinion said the acquisition process the government had begun called for the use of funds from the state budget.

"The BPK said in its opinion that its audit had shown there was the potential of violations in the government`s plan to fpurchase the MNT shares. So, we will soon summon the minister," Harry said.

He said that there were two points in the opinion of the state audit board that had needed to be heeded by the government.

"BPK said an investment by the government using state money needs to be covered by a special government regulation. The same applies to the provision of state participation funds to state-owned enterprises which also needs a special government regulation," he said.

The second thing, he said, is that the government needs approval from the House if it wants to make the investment.

"The House must approve it in the first place because the funds to purchase the MNT stake would come from the state budget. So far, the finance minister has never asked for the House`s approval," he said.

In order to get another legal opinion, Minister Wacik left the matter to the law minister. He said the ministry of law and human rights was now studying the legal aspects of the process to divest the 7-percent stake in NNT.

The House of Representatives had asked the ministry of energy and mineral resources to give a chance to the West Nusatenggara (NTB) region to obtain the NNT stake, even if Finance Minister Agus Martowardojo had said the government would acquire it through the PIP.

Wacik said he had just received a letter from House Commission VII on energy affairs asking the minister to give the seven percent stake to the region (regional government). "So, we will look into it which one is legally correct, whether it is the central government or the regional administration that has the right to purchase the stake," Wacik said.

The government`s decision to acquire the seven percent stake in PT NNT which operates the Batu Hijau mine, Indonesia`s second-largest copper and gold mine in West Nusa Tenggara, has since the beginning been opposed by the local people.

Last April, thousands of West Sumbawa district civil servants and other locals took to the streets and blocked roads to the mining location in protest against the central government`s plan to buy the shares. They demanded that the seven percent stake be offered to the government of West Sumbawa distict, West Nusa Tenggara province.

The Indonesian government, through the PIP had decided to buy the seven percent stake as part of the implementation of Article 24 of NNT`s work contract signed in 1986.

The law in Indonesia requires foreign companies in the mining sector to transfer 51 percent of their shares to the government or local companies after five years of commercial operation.

Thus, NNT had the obligation to divest 51 percent of its stake but because PT Pukuafu Indah, a local company owned a 20-percent stake in NTT, the company was only required to gradually sell a total of 31 percent of its stake to the government or local parties.

However, both the government and NNT were then involved in a dispute on how to implement the divestment scheme. The international arbitration court ruled in favor of the Indonesian government, where NNT had to divest three percent of its shares for 2006 and seven percent stake for each year from 2007 through 2010.

Up to 2009, 24 percent of the divestment process had been carried out, leaving another seven percent in the last phase for 2010, which until now the central government and local administration are fighting to acquire. (*)

Reporter: By Andi Abdussalam
Editor: Kunto Wibisono
Copyright © ANTARA 2011