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Down to Earth No. 67, November 2005

Mass protests challenge Inco

This article, contributed by YL Franky of the Alliance of Indigenous Peoples of the Archipelago (AMAN), highlights ongoing protests against Inco, the Canadian-owned nickel mine at Sorowako, South Sulawesi.

Indigenous people affected by Inco's mining in Sorowako*, mineworkers, students and NGOs who have formed the Mine Victims' Solidarity Forum (FSMT), mounted a four-day occupation of the company's regional office in Makassar, South Sulawesi, from September 15 - 19th.

On 12 September, the FSMT had protested to the provincial assembly (DPRD) which resulted in DPRD members promising them a meeting with Inco on Thursday 15th. However, the assembly was unable to get Inco managers to come to this meeting. Hundreds of disappointed FSMT members went en masse to Inco's office and staged the occupation. Two FSMT members also went on hunger strike: Yuliana, a 70-year old woman who had been evicted from her land, and Yusran, a Makassar University student. On the fifth day, the occupation was ended when police forcibly ejected the protesters from the building.

FSMT is demanding that Inco respects people's rights by compensating the villagers of Petea and the indigenous Karonsi'e Dongi community for land appropriated by the company. The group is demanding houses for the Karonsi'e Dongi and recognition of their rights over a customary (adat) area belonging to the Karonsi'e Dongi, which they have reoccupied and are cultivating. FSMT is also demanding re-employment for workers who suffered forced redundancies.

Inco says the Petea land case should be settled by the local government and that the workers' claims should go through the legal channels. The company has said it will investigate and discuss the Karonsi'e Dongi land claims internally.

Mass action and open protests have been frequent since the 1980s. From January to September this year, there were seven demonstrations concerning workers, local employment, land compensation and demands for recognition of indigenous land rights. The most intensive action has been related to the land conflict between the Karonsi'e Dongi community and Inco and the government. Today, around 70 families are still occupying and cultivating land and building huts on Inco's golf course, which they claim as their customary land. (See below for chronology.)

The widespread protests result from a sense of frustration with an unjust legal process, with law enforcement agents who are incapable of upholding the law and with informal mechanisms, including unequal dialogues, which fail to break the deadlock. Local people are faced with repression, terror and brutality as security forces and paid thugs are brought in. Policies and law enforcement are directed by investors, with the result that conflict cases are left to pile up and drag on for years.

The power of capital to intervene in the policy-making process was evident during the time of Megawati's government, which permitted mining in protected forests via Government Regulation in Lieu of a Law (Perpu) No 1 2004. This eventually became Law No 19, 2004. The government proved powerless against the mining companies, using uncertainty over business law and the threat of arbitration, as excuses to renege on its commitment to protecting forests.

Similarly, the Constitutional Court in its Judicial Review of Law 19/2004, proved itself incapable of amending policies in favour of communities by taking into consideration the impact on people of mining operations. The Court admitted that, objectively, it was true there would be negative impacts from mining operations, but chose to trust in the government's policy of protecting contracts with foreign mining investors. (Hendri Kuok in Opinion Column, Kompas 8/Aug/05. See also DTE 66 for more background on Perpu 1/2004 and Law 19/2004.)

The accumulated impact of legal uncertainty, poverty and brutal acts by the security forces has given rise to social unrest and distrust of the government. This could become a 'time bomb' which may explode at any time into social conflict and which will bring suffering and damage to all.

Continuing to break the law

Inco is currently building the Karebbe hydro-electric dam to boost nickel production (see box). This 'showcase' project is clearly problematic as two important permits have not yet been secured: the principal land clearing licence from the Luwu Timur district government and a licence from central government to release protected forest land.

Local police are still investigating the company carrying out the work, PT Thiess Contractor Indonesia, who says it doesn't know anything about the licences. (See, 9/Aug/05)

This has caused anger among local people since, clearly, PT Inco has violated legal procedures. People are concerned that the clearance will result in heavier flooding which will ruin their livelihoods.

Previously, the South Sulawesi provincial governor appealed to local people to guard against the threat of fatal flash floods resulting from uncontrolled deforestation. He expressed concern about forest destruction in Sorowako and Luwu Timur. If it were true that deforestation was so bad in Inco's concession, he said, the company would be given a reprimand and the government would urge Inco to restore the forest to its former condition. (TVRI report, 21/Nov/03).

There are suspicions that Inco has broken the law on other occasions too, through its involvement in smuggling coal from Tanah Grogot in East Kalimantan. On November 10, 2004, the Luwu Utara police arrested a motor vessel, the Osanik Star, with a cargo of around 3,000 tonnes of coal with no official documents, in the district's coastal waters at Malili. The coal was worth Rp 1.3 billion - the unpaid taxes on this represent income now lost to the state.

Interim police investigations found that the vessel was bound for the port of Balantang and its cargo was said to have been ordered by PT Inco. The local police chief suspects that coal smuggling from Kalimantan to Malili to supply the nickel industry and other interests in Sorowako has been going on for a long time. Herson Mangonta, the captain of this vessel, told his investigators that he had entered Malili carrying undocumented coal ten times, and that all of the coal was ordered by Inco. (See, 10/Nov/04).

* 'Soroako' is an alternative spelling.

Inco in Indonesia

Canada-based multinational Inco is the world's second biggest nickel producer. Its operations around the world continue to draw criticism over environmental damage and human rights abuse claims.

Inco owns 61% of PT Inco Indonesia, which operates one of the largest laterite nickel mines in the world. It currently produces around 160 million pounds (about 72,500 tonnes) of nickel matte per year and is expected to continue production for around 20 years more. The new USD280 million hydro-dam on the Larona River at Karebbe will boost electricity production to 360 MW, and is part of the company's expansion plan to reach annual production capacity of 200 million pounds of nickel matte by 2009. The project was launched in October this year by president Susilo Bambang Yudhoyono. Inco will also spend more on 'community development projects' and build a 80km road between Soroako and Bahodopi in Central Sulawesi where it also holds concession rights.

In the three months to September this year, Inco Indonesia's net earnings were US$73.2 million on sales of nickel worth $219.4 million.

“Inco is known to be one of Canada's largest single source polluters of air and soil, threatening the health of communities…" according to Catherine Coumans of Miningwatch Canada, "and Inco is now increasingly exporting its bad environmental track record and controversy-ridden community and labour relations to places like Guatemala, Indonesia and Kanaky-New Caledonia".

Recent protests in Canada include a high-profile student action against the company's funding relationship with the Memorial University of Newfoundland, and the awarding of an honorary degree to Inco's chief executive officer, Scott Handin October.

(Source:, JATAM, Miningwatch Canada & Society for Corporate Environmental and Social Responsibility (CESR) press release, 28/Sep/05, CESR press release 20/Oct/05; Jakarta Post 25/Oct/05)

Inco protest actions

1980: When Inco built the Larona hydrodam, 95 families living by the side of Lake Matano asked Inco for compensation - the case was taken up in Ujung Pandang court. The families demanded compensation amounting to Rp750 million. The case was settled out of court, with Inco agreeing to pay compensation and relocate a mosque to higher ground.

1998: People demanded compensation for land when Inco built the Balambano hydrodam. Inco asked them to pursue their claims with the government which had been temporarily entrusted with the compensation funds. One local person, Mendi, had still not received anything from the government as late as 2001.

February 1999: Sorowako villagers demonstrated against Inco for making problems over compensation and for failing to fulfil promises, such as provision of education and health services, electricity and clean water. These promises had been made as early as 1969. The case has still not been settled.

October 2002: The Karonsi'e Dongi community occupied the Inco golf course, an area of ancestral community-owned land, which the company had taken without compensation. At various times the company responded with threatening letters, eviction, burning huts and arrests on the grounds that the people were using land within the company's concession.

28 January 2005: Around 250 Inco employees who had been put on the redundancy list, together with their families, organised a blockade of the road between Wasuponda and Nuha, from 6:00 am. They stopped all company vehicles carrying nickel from Sorowako to Malili, including trucks headed for the port of Balantang. As a result, dozens of company containers carrying nickel from Sorowako, were detained. Non company traffic was allowed to pass.

The demonstrators demanded that PT Inco directors withdraw the redundancy policy and protested against Inco's involvement of local police officers in enforcing the redundancies. (Source:, 28/Jan/05)

31 March 2005: Around 500 members of a Sorowako youth organisation (FKPAS) demonstrated against Inco. At 5:00 am they flooded into the company golf course as part of a march from Sorowako village to the Inco golf club grounds. The crowd demanded that the Inco management make public all forms of recruitment procedures, including for medical staff. They demanded that Inco prioritise locally-born people in all recruitment, including Inco's business partners who had various small businesses in Luwu Timur. (Source:,1/Apr/05)

21 July 2005: Hundreds of redundant Inco workers blockaded PT Inco's airport in Sorowako. The protesters urged Inco's directors to meet them and called for Inco staff responsible for the redundancy policy to be fired. They also expressed sympathy and support for the victims of the Petea evictions.

8 August 2005: Dozens of people from the National Front for Workers Struggle (FNPBI) labour union protested at the South Sulawesi provincial assembly office. They demanded that Inco immediately pay severance pay to 303 workers who had been made redundant. The FNPBI believes that the hundreds of redundancies are unjust, because these workers have not yet received any compensation in the form of severance pay, uang, long service awards, or transport costs. The costs owed by Inco amount to Rp 2 billion.

12 September 2005: Hundreds of people, including mining victims belonging to the Mining Community Solidarity Forum (FSMT) staged a protest at the South Sulawesi provincial assembly (DPRD) building. The protesters wanted local assembly members to mediate in a meeting between Inco's president director, the FSMT and victims of mining, in order to settle the cases of 250 redundant workers and the eviction of Karoni'e Dongi from their customary land. The DPRD said it would hold the meeting on September 15th. DPRD members said the government and the DPRD were in a difficult position, facing threats of arbitration by Inco.

15-19 September 2005: Occupation of Inco's regional office and hunger strike (see main text). During this action, Inco, represented by Edi Suhardi (regional external relations director), Idham Kurniawan (government relations coordinator) and H. Latief, plus the West Makassar local police chief met with community representatives. The meeting ended without result as Inco was unable to meet the people's requests. PT Inco believed the Petea land case should be settled by a local government team from Luwu Timur. The company said the Karonsi'e Dongi land claims would be investigated and discussed internally. As far as the workers' claims were concerned, the company would fulfil all its legal responsibilities.

28 September 2005: Hundreds of FSMT members blockade the Inco mine again. Press reports said police fired warning shorts to disperse the protesters (AP 29/Sep/05).

Inco in Bungku

24 September 2004: Village heads and village councils (BPD) from Bungku Tengah and Bahudopi subdistricts, the subdistrict head and mining officials from Morowali subdistrict, held a meeting at Inco's office in Dampala village to hear about Inco's exploration plans for 2005 in the Bungku and Bahudopi areas, Central Sulawesi.

The residents of Onepute Jaya and Lele villages were disappointed with the meeting as there was no discussion of the problems they face and their demands for compensation which have not been answered by local government or Inco.

On April 29 2005, Onepute Jaya villagers held a protest at Inco's office in Lele village, Bungku Tengah subdistrict, over the company's exploration activities in March and April on 500 hectares of land owned by Onepute Jaya villagers, without their consultation or agreement.

(For more background on Bungku and Onepute Jaya see DTE's 1999 report Inco in Indonesia)

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