There's A Lot Of Controversy Behind The Bayan Resources Business Run By The Low Tuck Kwong Conglomerate, What Are They?

Illustration. (Photo: Doc. Antara)

JAKARTA - The progress of PT Bayan Resources Tbk's coal business has invited a lot of controversy and contains many problems. Starting from the acquisition of PT Gunung Bayan Pratama Coal to the issue of implementing the Corporate Social Responsibility (CSR) program. In fact, the last time he lost the case to the Supreme Court with a mining company located in Sinyur Village, East Kutai Regency.

"We have been waiting for about 22 years for the settlement of the remaining debt from Low Tuck Kwong. Until now, it has not been paid,'' said Muhammad Rasyid Ridha, one of the heirs of the mine owner, to reporters in Jakarta, quoted on Wednesday, May 25.

According to Rashid, the case started with PT Gunung Bayan Pratama Coal, which was originally owned by the late Haji Asri. Then it was taken over by the new owner Low Tuck Kwong in 1997 with still remaining outstanding payments.

"Between the two parties, a share sale and purchase agreement has been entered into at a price of IDR 5 billion. However, until now, only Rp. 3.5 billion has been paid. Meanwhile, the remaining Rp. 1.5 billion has not been paid by Low Tuck Kwong," said one of the heirs to the son of the late Haji Asri.

In accordance with the articles of the share sale agreement contract, the remaining balance will be repaid with the provision of a second extension of 30 days. But until now for 22 years there has been no payment of the rest.

"When calculated from production costs to the selling price per tonne, a net profit of 25.35 US dollars per tonne will be obtained with an average coal selling price of 80 US dollars per tonne," said Rashid.

From the above calculation, the net profit of 25.35 US dollars multiplied by 30 percent of the heirs' shares will result in 7.6 US dollars per tonne. Then multiplied by PT Gunung Bayan Pratama Coal's coal reserves of 343 million tons, the figure is 2,606,800,000 US dollars or equivalent to Rp. 37,277 trillion at an exchange rate of Rp. 14,300 dollars.

Send a letter to Jokowi

Rashid and other heirs of PT Gunung Bayan Pratama Coal, namely Muhammad Abduh, have sent a billing letter to Low Tuck Kwong, with a copy to President Joko Widodo.

"I have sent a letter to the President Director of Bayan Resources, but so far there has not been a response," he explained.

When asked whether the remaining unpaid payment to PT Gunung Bayan Pratama Coal was due to being used to pay taxes on mining activities, Rasyid firmly said that before there was a share purchase agreement, there was a basic agreement regarding initial exploration activities.

In the agreement, exploration drilling and excavation activities are fully borne by ICP (a company owned by Low Tuck Kwong) both from capital, implementation of activities, and taxes.

"When the share sale and purchase agreement was made, the condition of the mine was still in the exploration stage, it was still far from the production stage, so it was not logical to be burdened with taxes," he said.

On another occasion, the Kalimantan Youth Network Coordinator, Anjaya, said that the Bayan Resources controversy was compounded by the company's claim that it purchased 9 Mining Authorities (KP) at the end of 2010 for 325.6 million US dollars, or equivalent to Rp. with an exchange rate of around Rp. 9,000 at that time).

“In fact, many of the KPs purchased by Bayan Resources are fraudulent. This means that it is impossible to acquire the value of trillions of rupiah. Enough with billions of rupiah,''said Anjaya in Samarinda.

This transaction will not occur if there is no support from individuals in the Regency, Provincial Government, and the Ministry of Energy and Mineral Resources.

"This is certainly detrimental to the people and the Government of Indonesia because it violates regulations," he said.

CSR is not right on target

PT Bayan Resources Tbk also questioned its commitment to the use of CSR funds disbursed to three universities in Java. Even though the company operates in East Kalimantan.

According to Anjaya, it started with the circulation of news about CSR funds given by PT Bayan Resource worth Rp. 200 billion to three universities, namely the University of Indonesia, ITB, and UGM. The news is considered to have hurt the feelings of the people of East Kalimantan. The reason is that Bayan Resources is engaged in the coal mining business and operates in the East Kalimantan region.

“PT Bayan Resources' production continues to increase, their profits also increase. But where do the CSR funds for the people of East Kalimantan go," he said.

No wonder there was a mass action consisting of several mass organizations in East Kalimantan demanding that the CSR assistance issued by PT Bayan Resources be reviewed. Environmental activists also questioned PT Bayan Resources' commitment to efforts to improve the welfare of local residents.

Not surprisingly, last week, Tuesday, May 17, the East Kalimantan DPRD office in Samarinda was visited by a number of mass organizations. They expressed their disappointment to the representatives of the people there. The masses who are members of the National Regional Organization Council (MODN) asked the East Kalimantan DPRD to review and re-evaluate the Coal Mining Concession Work Agreement (PKP2B) operating in the East Kalimantan region, especially in terms of distributing PKP2B CSR Funds so that there are no violations in their use.

"For companies that do not comply with the PKP2B, we ask for their operations to be stopped," said Anjaya, hoping that CSR funds from mining companies operating there could be absorbed for the residents of East Kalimantan.

Regarding CSR funds that have been channeled through a foundation for three universities on the island of Java, in a meeting in the DPRD Meeting Room, the response of Bayan Resources Public Relations was considered unsatisfactory. In fact, one of the participants in the mass action from the Dayak, Kutai, and Banjar (Dakuba) organizations had kicked the table in front of company representatives and the East Kalimantan DPRD.

“We who are in Tabang, the people are still poor. Even though there are 19 villages there that are included in the concession area (Bayan Resources). What do people get? There is no!" he said annoyed.

Anjaya also revealed the impact of the mining business, including making Tabang prone to flooding. Moreover, ex-mining ponds managed by Bayan are everywhere.

Sarkowi, a member of Commission III of the East Kalimantan DPRD, also regrets the steps taken by the leadership of Bayan Resources.

“Personal assistance should also be given to residents of East Kalimantan. Because the business is in East Kalimantan," he said.

Rinto, General Chairperson of the East Kalimantan-Tara HMI Coordinating Board also spoke. He stated that what the leadership of Bayan Resources did by disbursing CSR funds to universities in Java was wrong.

According to Rinto, when referring to PP. No. 47 of 2012 concerning Social and Environmental Responsibility of Limited Liability Companies, the priority should be for universities in East Kalimantan, so that the impact can be directly felt by the community, he stressed.

He also said that he would hold further demonstrations with HMI cadres and the East Kalimantan community alliance. "We have coordinated with all HMI cadres and called for a return to mass action in front of the Bayan Resources office," said Rinto.