Coca-Cola Accused in Water Extraction Case in Indonesia
The Jakarta Post
April 5, 2014

Jakarta: The National Police named PT Coca Cola Bottling Indonesia (CCB) a suspect on Friday, in an alleged illegal groundwater extraction case in Sumedang, West Java.

The police suspect the company of violating Article 94 of Law No. 7/2004 on water resources, by illegally extracting groundwater in the area for soft drink production without a groundwater usage permit (SIPA).

“If found guilty, the company’s directors will be held responsible for the offense,” said National Police deputy director for special crimes Sr. Comr. Alex Mandalika in a press conference.

According to Alex, CCB’s extraction permits for eight locations in Sumedang expired in 2010 and 2011.

“The regional government there, through the Natural Resources Conservation Agency [BKSDA], had demanded the company stop the extraction, but it was ignored,” Alex said.

In 2011, a CCB manager applied for permit extensions through the Board of Investment Services and Integrated Licensing (BPPMPT), and was told the company would receive it as long as it had a recommendation from the Energy and Mineral Resources Ministry, according to the police.

However, CCB was unable to fulfill the requirements and gain the ministry’s recommendation.

BPPMPT sent a warning letter to CCB in December 2013, demanding it stop extraction until it was able to fulfill the requirements and obtain the permit extension.

“According to our investigations, CCB was still extracting groundwater. We have temporarily halted its extraction activities in the eight locations,” said Alex.

The police have questioned 27 witnesses; eight officials from West Java’s Energy and Mineral Resources Agency, one from the Agency for the Assessment and Application of Technology (BPPT), eight from the Sumedang’s Mining and Energy Agency and 10 from CCB.

Contacted separately, CCB corporate communications head Putri Silalahi said they were unaware of the police’s decision to name the company a suspect in the case.

“We’re a little confused. We’ve not received any statements from the police, written or otherwise, about this case,” she said.

“Even if we did, we would always cooperate. We’re a large company that has been in Indonesia for a long time, so of course we would comply with the regulations.”

She added that as a multinational corporation, the company was subjected to regular audits by local governments and internally.

Putri explained CCB had already applied to extend its extraction permits two months before they expired in 2011.

However, she added that according to a letter of notice presented to the company on May 18, 2011 and on June 8, 2012 from the Sumedang Mining and Energy Agency, CCB was still legally allowed to extract and use groundwater while the permit extension application was in process.

She added CCB had regularly visited the regional government to ask for the permits, but without any progress.

“Every month, the regional government sends someone to audit us and so far it’s been business as usual. We have nine factories and we always comply with the regulations and cooperate with the authorities,” she said.

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