paper mill
A paper mill is a factory devoted to making paper from vegetable fibres such as wood pulp, old rags, and other ingredients. Prior to the invention and adoption of the Fourdrinier machine and other types of paper machine that use an endless belt, ...
ing company founded in
Sumatra
Sumatra is one of the Sunda Islands of western Indonesia. It is the largest island that is fully within Indonesian territory, as well as the sixth-largest island in the world at 473,481 km2 (182,812 mi.2), not including adjacent i ...
, Indonesia, in 1989 and is owned by Indonesia's richest business man Sukanto Tanoto.
pulp mill
A pulp mill is a manufacturing facility that converts wood chips or other plant fiber sources into a thick fiber board which can be shipped to a paper mill for further processing. Pulp can be manufactured using mechanical, semi-chemical, or ful ...
under the name of PT Inti Indorayon Utama, which was built at a small village Porsea nearby Lake Toba of
North Sumatra
North Sumatra ( id, Sumatra Utara) is a province of Indonesia located on the northern part of the island of Sumatra. Its capital and largest city is Medan. North Sumatra is Indonesia's fourth most populous province after West Java, East Java and ...
. The mill however did not run smoothly with the local people, who argued that it had polluted the area, performed major deforestation and injustice
land grabbing
Land grabbing is the contentious issue of large-scale land acquisitions: the buying or leasing of large pieces of land by domestic and transnational companies, governments, and individuals.
While used broadly throughout history, land grabbing as ...
. From the beginning, the Indonesia's first pulp mill was full of conflict history. The initial permit released contained land disputes, the quality of air and water around
Asahan River
The Asahan River ( id, Sungai Asahan) is one of the principal rivers in North Sumatra, Indonesia, that begins in Porsea, Toba Samosir Regency at the Southeast part of Lake Toba. was responsible for some
landslide
Landslides, also known as landslips, are several forms of mass wasting that may include a wide range of ground movements, such as rockfalls, deep-seated grade (slope), slope failures, mudflows, and debris flows. Landslides occur in a variety of ...
disasters in the area and released toxic chlorine gas during the 1993 boiler explosion. However, during the Suharto administration, Indorayon enjoyed freedom of its activities due to the close ties between its owner with Suharto. Demonstrations and legal action to the governmental agencies, that had started since 1986, failed to stop the factory's activities which in turn was answered by detentions, arrests, beatings, raids and violent acts by the local security forces.
Following the downfall of Suharto in 1998, public pressure began to grow, but it was always answered with violence and terrors by police officers hired by the company. Clashes between local residents, staffs and members of security forces were unavoidable and resulted six deaths and hundreds of injuries in 1999. As a result, President Habibie temporarily put the mill on halt on 19 March 1999 and designated an independent audit to assess the environmental damage caused by the mill, the audit of which never took place. The decision was later supported by the-then Indonesia minister of environment Sony Keraf from the President Wahid's administration that the Indorayon's paper pulp and rayon fibre production should be closed down or relocated.
Several Indorayon's supporters, including the-then ministry of trade
Jusuf Kalla
Muhammad Jusuf Kalla (; born 15 May 1942) is an Indonesian politician and businessman who served as the 10th and 12th vice president of Indonesia, the only vice president in Indonesian history to serve two non-consecutive terms in office (2004†...
, denied the allegation over the mill's pollution case and lobbied heavily to resume its operation. The problem also escalated into an international matter as Indorayon was 86% owned by foreign individuals. An international arbitration in Washington was then opened and President Wahid stated that Indonesia must abide the arbitration decision. Having feared of US$600 million compensation or facing international lawsuit, the Indonesia cabinet minister gave a 'green light' for the mill to resume its operation in May 2000 with the requirement that the production of dissolving pulp should be stopped. The decision was then responded by another opposition from the local people and some Indonesia's environmental groups such as WALHI. A student was shot dead by the police during the demonstration on 21 June 2000, dozens have been killed and many hundreds were seriously injured during the 27 months of conflict.
The long saga between Tanoto's Indorayon with local community ended up with the status of closing down during the President Wahid administration.
Stakeholder
Stakeholder may refer to:
*Stakeholder (corporate), a group, corporate, organization, member, or system that affects or can be affected by an organization's actions
*Project stakeholder, a person, group, or organization with an interest in a proje ...
s stopped making monthly US$1 million operational payments since 1 September 2000. The company had tried to rename into PT Toba Pulp Lestari to ensure the local people that it does not produce rayon (dissolving pulp) anymore, but it still failed to resume its operation due to intense local opposition. The company laid off its 7,000 workforce within weeks and agreed on US$400 million debt for equity swap.
See also
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Environmental issues in Indonesia
Environmental issues in Indonesia are associated with the country's high population density and rapid industrialisation, and they are often given a lower priority due to high poverty levels, and an under-resourced governance.
Most large palm oi ...