Thousands of Dayak people in a remote forested region of East Kalimantan, Indonesia (Borneo) are blockading the Rio Tinto-owned Kelian mine after negotiations over the community's demands for fair treatment have broken down.

This situation raises serious questions about Rio Tinto's ability to deliver the pledges made in documents such as 'The Way We Work' and the 1999 Environment and Social Report and the company's commitment to community relations and human rights in Indonesia. Down to Earth - the International Campaign for Ecological Justice in Indonesia - will be presenting a statement by the Kelian community at the Rio Tinto AGM in London on May 10th.

The PT Kelian Equatorial Mining mine (PT KEM) is operated and 90% owned by Rio Tinto. A representative of the Dayak Bahau people - on whose land the mine and processing plant are located - came to Rio Tinto's London AGM in 1998. He told Rio Tinto's board and shareholders about the negative environmental and social impacts caused by the mine since operations began in 1992, and presented the local peoples' demands for compensation and corrective action.

The Kelian community and Rio Tinto/PT KEM agreed to hold a series of negotiations on compensation for land taken plus crops and property destroyed by mining operations; human rights violations; the livelihoods of small-scale miners (currently evicted from the concession); pollution and mine closure plans. The mine is due to close in 2003/4.

The demands of the Kelian people are:

Negotiations have continued for the past two years, but have still only begun to address the first category of the community's demands. Local people also say that Rio Tinto's community development programme has failed to meet their needs. An independent report on human rights violations by PT KEM has recently been released. The Kelian people fear that PT KEM is playing for time and will leave the area without settling many important issues.They cite cases where PT KEM has deliberately made the negotiations slower and more difficult.

Deadlock resulted after PT KEM involved the local government in discussions over compensation rates for land. Thousands of frustrated villagers then blockaded the main road to the mine, preventing production for the past week. Police arrested two of the community's main representatives. PT KEM is now trying to sideline the community organisation and negotiate with separate groups.

The Kelian people ask Sir Robert Wilson, as Rio Tinto's Chairman to take action to ensure that PT KEM resumes negotiations as agreed two years ago and that the community's demands are addressed as a matter of urgency. According to Rio Tinto: "Achieving harmonious relations is a core part of our managers' work" (Social and Environment Report 1999 p 1/2).

DTE 9TH May 2000


Rio Tinto in involved in three major mining operations in Indonesia - the Kelian gold mine; the Kaltim Prima Coal mine also in East Kalimantan (50% Rio Tinto, 50%BP-Amoco); and the Grasberg copper and gold mine in West Papua (12% owned by Rio Tinto, which funded 40% of a recent expansion to double throughput).

Kelian gold mine is the largest primary gold mine in Indonesia. It produces over 400,000 ounces of gold equivalent per year.

The Indonesian-based company which operates the mine, PT Kelian Equatorial Mining (PT KEM) is 90% owned by Rio Tinto. The other 10% is owned by an Indonesian partner, PT Harita Rayajaya.

Kelian is an open-pit operation; gold is extracted from the ore by a cyanide leaching process.

In 1998 PT KEM released 914kg of cyanide compounds into the Kelian River. Rio Tinto argues the cyanide breaks down harmlessly in sunlight. The 1999 Social and Environment report uses a different measuring system, so comparisons cannot be made.

The mine also makes the river water very muddy: 2-3,000 tonnes of suspended solids are released each year. This makes it less likely cyanide compounds will break down in sunlight.

There is a serious acid rock drainage problem at the Kelian mine. Manganese levels have exceeded permitted levels on a number of occasions during the past few years. This year Rio Tinto plc has not released figures in the Social and Environmental report.

Local people depend on river water as a supply for drinking, cooking, bathing and fishing.

Indigenous Dayak people found gold in the upper reaches of the Kelian River in 1948. The original miners were joined by many more as word spread. By the 1970s there were around 4,000 people living around the Kelian River, including 2,000 small-scale miners.

The local Dayak Bahau community made an agreement allowing other communities to prospect for gold on their land. These people made a good living and relations between groups were harmonious until the late 1970s when the Indonesian government allowed foreign mining companies to explore for gold.

The Australian mining company CRA (now Rio Tinto Ltd) started operations through PT KEM in January 1992. The mine is due to close in 2003/4.

The disputes between the Kelian community and the company began when PT KEM started land acquisitions in order to construct the mine and processing plant at Prampus. A total of 440 people were displaced. Other families were evicted to build a port at Jelemuk and along the mine road from Jelemuk to Prampus.

Local people lost homes, lands, gardens, fruit trees, forest resources, family graves and the right to mine for gold in the river. Little, if any, compensation was paid at the time. The company left all compensation deals to the local government.

Families who refused to be evicted were intimidated by the military and civil authorities and/or forced to leave their homes. Protestors were arrested and detained. One man died in detention.

Member of PT KEM's security unit have worked with local security forces to evict small-scale miners from the mine's concession area. As many as 1,000 miners' cabins have been burnt or destroyed between 1982 and 1991. Up to 1997, local people who were caught panning for gold were arrested and subjected to violence by PT KEM security staff. Their equipment was confiscated or destroyed.

PT KEM employees have been named in a number of incidents of sexual harassment, rape and violence against women between 1987 and 1997.

Rio Tinto has admitted that it cannot rehabilitate all the forest land taken for the mine site.

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