Meru Betiri National Park mining threat

Down to Earth No. 48, February 2001

NGOs are protesting against the decision by local government authorities in East Java to license gold-mining in an area which includes a national park as well as productive plantation and farmland owned by local people. The decision, which flouts national laws, is an alarming example of what may become a future trend in the new era of regional autonomy.

PT Jember Metals and PT Banyuwangi Minerals submitted applications for gold mining contracts to the bupatis (district heads) and local assemblies of Jember and Banyuwangi districts, East Java, in August last year. The companies made presentations to the assemblies, promising taxes and royalties for local government coffers and development for local people. A week later, with no input from civil society organisations, academics or local people, the contracts were approved and 'agreements in principle' (Persetujuan Prinsip KK) were issued by the local governments.

The concession areas, covering just under 200,000 hectares in Jember district and 150,000 ha in Banyuwangi, include productive farmland owned by local communities, and protected forests run by state-owned forestry company PT Perhutani. It also covers the 55, 845 ha Meru Betiri National Park, which straddles the two districts. The park is home to 181 rare and protected species of birds and mammals, including the Javanese eagle. It was the last outpost of the now extinct Javanese tiger. Four types of endangered turtle are known to lay eggs on the southern shores of the park, which contains 5 of the 11 ecosystem types of Java. The park is also surrounded by six villages whose inhabitants benefit directly and indirectly from the forest products, water and micro-climate functions of the park. Now the park and the livelihoods of people living in the concession areas are under threat. Local and national NGOs including Kappala, LATIN, Bina Lestari, KSM HAMIM, and the mining advocacy network JATAM, have mounted a campaign to stop gold-mining in the park. At an October press conference, Kappala's Siti Maimunah accused PT Jember of "profiting from the ignorance of Jember government officials". She added that under regional autonomy, local officials were only interested increasing local revenues. JATAM's Chalid Muhammad accused the local authorities of "sacrificing the national park for taxes and royalties". Kappala points out that under laws 5/1990 and government regulation 68/1998, mining in conservation areas, including national parks, is not permitted.

The local government's authority to issue the contract agreements is also disputed. According to director of general mining at the energy and mineral resources department, Prof Surna Djajadiningrat, the authority to issue licences is held by the mining minister. Indeed the mining department is seeking to delay transfer of this authority (as required by regional autonomy laws) for up to five years.


The Jusuf Merukh factor

PT Jember Metals and PT Banyuwangi Minerals are both owned by Indonesia's foremost mining magnate, Jusuf Merukh. They are part of his Lebong Tandai Group of companies, which lists interests in other Indonesian mining projects including both Newmont-operated mines in North Sulawesi and Sumbawa. Lebong Tandai Group also holds interests in several overseas projects including including mines in Kazakhstan, Canada and Australia. Jusuf Merukh has claimed that Lebong Tandai Group is a national company with 'international standards' and says there is no need to doubt the company's capacity or commitment on environmental problems and community development.

The contract areas were first surveyed by the Lebong Tandai Group in the 1980s. The Group applied unsuccessfully for mining contracts in 1990 and again in 1991, finally securing a mining permit ('KP' - the only mining permit then allowed for Java), in 1994 by buying an 85% share in another company, PT Hakman Group. Hakman is suspected of gaining the original permit from the department of mines and energy by corrupt means.

(Sources: WALHI: Prediksi Lingkungan 2001; MinergyNews.Com 29/Aug/00, 6&7/Oct/00; NGO 'Statement of opinion' 2/Sep/00; Ancaman Pertambangan Emas di TN Meru Betiri - leaflet by Kappala and BAL, 2000)

Mining in protected forests sanctioned for pre-1999 contract holders

The contracts now under dispute in Jember and Banyuwangi are 'KK's or 'Contracts of Work' - the type of contract issued to foreign mining ventures outside Java - but now valid for Java too. Last year NGOs were alarmed by the news that the government was reviewing the restrictions set out in the 1999 Forestry Law which prohibit these contract holders from open-pit mining in protected forests (see DTE 47:9). In December the government announced its decision to allow investors whose contacts pre-date the 1999 law to develop open-pit mines in protected forests. This news is bad for forests and makes a mockery of the term 'protected'. It is also further evidence of the persuasive pressure applied by the mining industry which has lobbied to have the restriction removed. However, the decision does mean that contracts signed after the 1999 law will not be able to develop open-pit mines in such areas. The decision is relevant to the Jember and Banyuwangi cases because national parks are supposed enjoy a higher level of protection than 'protected forests'. It highlights the way Jusuf Merukh is trying to use regional autonomy to circumvent laws on conservation by applying directly to local governments and appealing to their mercenary instincts.