Legislator regrets IMA's statement about contract

Head of the Reforms Faction of the House of Representatives Hatta Radjasa regretted the Indonesian Mining Association's (IMA) statement that production sharing contract system was unsuitable for mineral mining industry.

Hatta said the association should make a comprehensive study on the contract system before making such a statement.

"IMA should make a wise response rather such a reaction," Hatta said.

"We know that IMA cares about the interests of its members but it does not need to hastily close the door for a discussion about the contract of work. IMA should be ready to discuss about the issue comprehensively so that the contractors realize a change in the Indonesian society and IMA could become a mediator," Hatta said.

According to Hatta, some aspects of the production sharing contracts could be applied in the mineral industry as the system proved to have given a big contribution to the government in the oil sector.

"The system is relatively open and transparent. All the costs are well recorded. There is pre-audit, current audit, post audit (of the costs). I think the system is very safe," Hatta said.

He said under the contract of work system applied in the mining sector, mining investors could do anything they wanted provided that they complied with their contracts, fulfilled their obligation to the government, while the government was not involved in monitoring their financial conditions.

The contract of work system enabled mining contractors to lie about its production, he added. (*)