PT Inti Indorayon Utama (PT Toba Pulp Lestari)
Started	1987
Investation	US$ 600 million
Ownership	Asia Pacific Resources International Holdings Asia Pacific Resources International Holdings Asia Pacific Resources International Holdings Limited, or APRIL, is a developer of fibre plantations and the owner of one of the world's largest pulp and paper mills...  (APRIL April April is the fourth month of the year in the Julian and Gregorian calendars, and one of four months with a length of 30 days. April was originally the second month of the Roman calendar, before January and February were added by King Numa Pompilius about 700 BC... ) (60% owned by RGM International)
Notable stakeholders	1. Salim Group (Sudono Salim Sudono Salim Sudono Salim , also known as Liem Sioe Liong, is a Chinese Indonesian businessman of Hokchia origin. He was once considered the richest individual in Indonesia. He was the head of the conglomerate Salim Group before turning over its management to his youngest son Anthony in 1992.-Early life:Salim...  and Suharto families) 2. Tirtamas Group (Hashim Djojohadikusumo and Titiek Prabowo) 3. Marisan Nusantara Group (Akbar Tandjung and family)
Production	1. 240,000 ton pulp Wood pulp Pulp is a lignocellulosic fibrous material prepared by chemically or mechanically separating cellulose fibres from wood, fibre crops or waste paper. Wood pulp is the most common raw material in papermaking.-History:... /year (since 1989) 2. 60,000 ton rayon Rayon Rayon is a manufactured regenerated cellulose fiber. Because it is produced from naturally occurring polymers, it is neither a truly synthetic fiber nor a natural fiber; it is a semi-synthetic or artificial fiber. Rayon is known by the names viscose rayon and art silk in the textile industry... /year (since 1993)
Market	70% export and 30% domestic
Area	1. 86,000 hectares through logging concession (HPH). 2. 269,060 hectares pulpwood plantation. 3. 30,000 hectares People Nucleous Plantation (PIR).
Source: WALHI WALHI WALHI is an Indonesian environmental non-governmental organization, which is part of the Friends of the Earth network....

PT Inti Indorayon Utama is an Indonesia

Indonesia

Indonesia , officially the Republic of Indonesia , is a country in Southeast Asia and Oceania. Indonesia is an archipelago comprising approximately 13,000 islands. It has 33 provinces with over 238 million people, and is the world's fourth most populous country. Indonesia is a republic, with an...

 paper mill

Paper mill

A paper mill is a factory devoted to making paper from vegetable fibres such as wood pulp, old rags and other ingredients using a Fourdrinier machine or other type of paper machine.- History :...

ing company founded in Sumatra

Sumatra

Sumatra is an island in western Indonesia, westernmost of the Sunda Islands. It is the largest island entirely in Indonesia , and the sixth largest island in the world at 473,481 km2 with a population of 50,365,538...

, Indonesia

Indonesia

Indonesia , officially the Republic of Indonesia , is a country in Southeast Asia and Oceania. Indonesia is an archipelago comprising approximately 13,000 islands. It has 33 provinces with over 238 million people, and is the world's fourth most populous country. Indonesia is a republic, with an...

, in 1989 and is owned by Indonesia's richest business man Sukanto Tanoto

Sukanto Tanoto

Sukanto Tanoto was said in 2008 as the richest Indonesian, according to the Forbes magazine with the total net worth of US$ 3.8 billion . Started as a supplier of equipments and materials for the state own oil firm Pertamina, Sukanto Tanoto then moved to the forest industry in 1973...

.

In 1989, Sukanto Tanoto started a pulp mill

Pulp mill

A pulp mill is a manufacturing facility that converts wood chips or other plant fibre source into a thick fibre board which can be shipped to a paper mill for further processing. Pulp can be manufactured using mechanical, semi-chemical or fully chemical methods...

 under the name of PT Inti Indorayon Utama, which was built at a small village Porsea nearby Lake Toba

Lake Toba

Lake Toba is a lake and supervolcano. The lake is 100 kilometres long and 30 kilometres wide, and 505 metres at its deepest point. Located in the middle of the northern part of the Indonesian island of Sumatra with a surface elevation of about , the lake stretches from to...

 of North Sumatra

North Sumatra

North Sumatra is a province of Indonesia on the Sumatra island. Its capital is Medan. It is the most populous Indonesian province outside of Java. It is slightly larger than Sri Lanka in area.- Geography and population :...

. The mill however did not run smoothly with the local people, who argued that it had polluted the area, performed major deforestation

Deforestation

Deforestation is the removal of a forest or stand of trees where the land is thereafter converted to a nonforest use. Examples of deforestation include conversion of forestland to farms, ranches, or urban use....

 and injustice land grabbing. 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

Asahan River

Asahan River is a river in Sumatra, Indonesia, about 150 km long. It flows from the Lake Toba, flowing in north-eastern direction, in the upper course through the deep valley of Barisan Mountains. Asahan empties to the Strait of Malacca creating an estuary. City of Tanjung Balai is located near...

 degraded drastically, which was said to be responsible to certain skin diseases, reducing corp production and water contamination, was responsible for some landslide

Landslide

A landslide or landslip is a geological phenomenon which includes a wide range of ground movement, such as rockfalls, deep failure of slopes and shallow debris flows, which can occur in offshore, coastal and onshore environments...

 disasters in the area and released toxic chlorine

Chlorine

Chlorine is the chemical element with atomic number 17 and symbol Cl. It is the second lightest halogen, found in the periodic table in group 17. The element forms diatomic molecules under standard conditions, called dichlorine...

 gas during the 1993 boiler explosion. However during the Suharto administration

New Order (Indonesia)

The New Order is the term coined by former Indonesian President Suharto to characterize his regime as he came to power in 1966. Suharto used this term to contrast his rule with that of his predecessor, Sukarno...

, 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

Jusuf Habibie

Bacharuddin Jusuf Habibie , also known B. J. Habibie, was the third and shortest-serving President of Indonesia, serving from 1998 to 1999.-Early life and career:...

 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 was never took place. The decision was later supported by the-then Indonesia minister of environment Sony Keraf from the President Wahid

Abdurrahman Wahid

Abdurrahman Wahid, born Abdurrahman Addakhil , colloquially known as , was an Indonesian Muslim religious and political leader who served as the President of Indonesia from 1999 to 2001...

's administration that the Indorayon's paper pulp and rayon fibre

Rayon

Rayon is a manufactured regenerated cellulose fiber. Because it is produced from naturally occurring polymers, it is neither a truly synthetic fiber nor a natural fiber; it is a semi-synthetic or artificial fiber. Rayon is known by the names viscose rayon and art silk in the textile industry...

 production should be closed down or relocated.

Several Indorayon's supporters, including the-then ministry of trade Jusuf Kalla

Jusuf Kalla

is an Indonesian politician who was the 10th Vice President of Indonesia from 2004 to 2009 and Chairman of the Golkar Party during the same period. He was an unsuccessful candidate for the 2009 presidential election.-Early life:...

, 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

International arbitration

International arbitration is a leading method for resolving disputes arising from international commercial agreements and other international relationships...

 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

WALHI

WALHI is an Indonesian environmental non-governmental organization, which is part of the Friends of the Earth network....

. 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. Stakeholders 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

Equity swap

An equity swap is a financial derivative contract where a set of future cash flows are agreed to be exchanged between two counterparties at set dates in the future. The two cash flows are usually referred to as "legs" of the swap; one of these "legs" is usually pegged to a floating rate such as...

.