No mining in the forests!

Down to Earth No 53-54  August 2002

Indonesian civil society organisations are battling to stop more mining in the country's protected forests.

Indonesia's forestry minister Mohammad Prakosa is coming under increasing pressure from a powerful international mining lobby to end his opposition to mining in 'protected' forests in Indonesia. The lobby includes some of the biggest global mining corporations - Britain's Rio Tinto, Canada's Inco and the United States' Newmont. They are also among the world's most criticised mining companies - for their record on the environment and human rights. Now they want to change Indonesian law so they can gain access to rich mineral reserves underlying some of the country's remaining forests.

Under Indonesia's forest law 41/1999, open-pit mining is prohibited in protected forests. As defined by the law, the purpose of these forests is to protect water catchment areas, prevent flooding, control erosion, prevent seawater intrusion and maintain soil fertility. According to World Bank figures (1997), 35 million hectares of forests are classified as protected forests and 19 million ha as conservation forests, from a total of around 112 million ha administered as forest lands. (See DTE Special Report, Forests People and Rights figures, and classifications for difficulties with forest classification in Indonesia.)

One hundred and fifty mining companies hold contracts which overlap with protected areas and which were signed before the 1999 law was passed. These cover an estimated 8.6 million hectares of protected forest and 2.8 million hectares of conservation forests. The largest areas are in West Papua, Sumatra and Kalimantan (see table). Most of these operations have been on hold since the law was introduced. The companies have complained of unfair treatment and have warned that Indonesia's deteriorating investment will suffer even greater losses if the law is not amended (see DTE 52 and DTE 47 for further background). A new mining law, long under preparation, will be delayed now until next year, partly because of the 1999 forestry law ban on open-pit mining in protected forests. (For more background on the draft mining law see DTE 50)

Now the bullying tactics have started: earlier this year around twenty companies attempted to force the pace by saying they would seek international arbitration on the issue. Their campaign has borne fruit: according to the energy and mineral resources minister Purnomo Yusgiantoro, as quoted by the Indonesian magazine Kontan, in May President Megawati herself signed a letter of agreement for the law to be changed. Another source said that Megawati endorsed a revision of the law late last year. In June, environment minister Nabiel Makarim said he agreed to mining activities going ahead in areas where contracts predated the 1999 law. Co-ordinating minister for economic affairs, Dorodjatun Kuntjoro-Jakti, is also reported to be in favour. A July hearing at the Indonesian Parliament heard a plea for mining in protected areas from the minister for acceleration of the development of eastern areas, Manuel Kaisiepo, who regretted the loss of US$11.5 billion of investments from companies ready to start mining their areas. At least 18 MPs made comments opposing the opening of forests for mining, but Prakosa is the only minister still opposing the move.

This leaves the minister dangerously isolated, supported only by the NGOs and communities, whose voice is all too often ignored in government decision-making.


JATAM Petition

The Indonesian mining advocacy network, JATAM, the environmental NGO, WALHI, and others are campaigning to make this voice as loud as possible. In May, a student environmental group, PAI, demonstrated outside the forestry department and the Indonesian parliament to reject any moves to lift the ban on mining in protected forests. Another organisation, AMPHI, demanded that the government revoke fifteen mining licences which overlap with protected forests.

In April 2002, JATAM issued a petition entitled "No mining in protected forest areas", which calls on the Indonesian government and parliament to:

  1. Not turn protected areas into mining areas because this will only accelerate environmental disaster in regions throughout Indonesia.
  2. Not use the nation's economic crisis as justification for mining in protected and conservation areas.
  3. Be persistent in defending policies that ban mining like that stated in Article 38, Act No 41/1999 regarding Forestry. The amendment that the mining industry is seeking on this article goes against environmental conservation.
  4. Stop efforts to change the status and shift the boundaries of protected areas for mining. Efforts to change forest status and shift the boundaries of protected forest areas are being used to get around the law and cannot be justified.
  5. Stop providing licenses to mine in forest areas and other areas since the issuance of mining licenses in this era of autonomy has risen sharply to uncontrollable levels."

JATAM is calling for people supporting this position to sign the petition and send letters to the Indonesian forestry ministry at calling on the government not to open protected forests for mining. Contact or see for more details.

Table 1: Mining in the forests: 

(Note: statistics differ according to source)

Total forest area with potential for mining 84,757,000 ha Media Indonesia 23/Mar/02
in Kerebok 3/20 Mar 2002
Mining concessions in protected forests 17,699,000 ha = 35% of 47,059,000 ha of total areas of mining concessions Kerebok 3/20 Mar 2002
Mining concessions in protected and conservation forests affected by 1999 forestry law 11,400,000 ha (8,680,000 ha in protected forests) (2,800,000 in conservation forests) Walhi, Telapak in Kontan 22/Apr 2002
Total forest area covered by mining concessions 6 million hectares Indonesian Mining Association (IMA) inKontan 22/Apr/02
Total forest area covered by active mines 135,000 ha IMA in Kontan 22/Apr/02
Total area of mining concessions 47,059,000 ha
66,000,000 ha +
66,900,000 ha
Kerebok 3/20 Mar 2002
Kerebok 3/21 Apr 2002
Kontan 22/Apr/02
Total number of mining contracts
(to 2001)
105, CoWs (foreign companies);
893 KPs (Indonesian companies); 
110 coal mining concessions.
2,138 permits have been issued by local governments since regional autonomy legislation was implemented 2001.
Kontan 22/Apr/02
Jakarta Post 5/Jun/02
Jakarta Post 5/Jun/02
Total investment in mining industry $915 million (2000)
$413 million (2001)
Far Eastern Economic Review (FEER)18/Jul/02
Revenue from mining $888 million (1999)
$738 million (2001)
FEER 18/Jul/02
FEER 18/Jul/02
Mining's contribution to economy $1.6 billion (2000) FEER 18/Jul/02
Spending on exploration $160 million (1996)
$67 million (2000)
$22 million (est 2001)
PricewaterhouseCoopers quoted inFEER 18/Jul/02
Forest destruction attributable to mining 10% NGOs quoted in Kontan 22/Apr/02


Legal certainty for companies or communities?

One of the industry's main arguments is that the contracts signed before the introduction of the 1999 law should be honoured and that the law should not be retroactive. This argument fails to take into account the fact that those contracts were issued by the Suharto regime, a dictatorship which swept aside community rights and environmental considerations in the rush to get rich quick. During those years, investors' interests were allowed to take priority over livelihoods - as long as the companies ensured sufficient financial rewards for the Suharto family and business cronies. They were handed vast tracts of land for exploration - with the result that the industry controls 66.9 million hectares of land or more than 35% of Indonesia's land surface (see table below). Much of this land is forested and belongs to Indonesia's millions of indigenous people, who are now seeking legal recognition of their territories. They want legal certainty for communities, not companies.

The industry also argues that many of the areas classified as protected forests are degraded areas with little or no forest cover. If this is the case, there should be investment in restoring the forest functions, not causing further, permanent damage. Indonesian NGOs point to the increase in flood disasters as a clear sign that more, not less, protection is needed. A total of 16 provinces have been identified as prone to flooding and landslides. Opening more forests to mining activities will further reduce the country's natural flood control capacity, resulting in more flooding and more contaminated drinking water.

The mining industry is quick to point the finger at the logging industry as responsible for most forest destruction in Indonesia, while claiming that mining brings prosperity and development to remote regions. The Indonesian Mining Association (IMA) claims that only 135,000 hectares of forest areas have actually been disturbed for mines. But this figure fails to take into account the knock-on impacts brought by mining access roads and in-migration. NGOs estimate that the impact of mining amounts to a substantial 10% of forest destruction in the country.


Moving boundaries

In the meantime, several companies with concessions overlapping with protected forests are pushing to get the status of the forests changed in order to allow mining to proceed. Projects under examination by Jakarta's mineral resources department include:

  • BHP Billiton's Gag Island nickel project off West Papua (a recommendation has been submitted to the forestry department to change the status of forests in the concession);
  • PT Citra Palu Mineral (90% owned by Britain's Rio Tinto - see also article below);
  • PT Weda Bay Minerals - a Canadian-owned nickel and cobalt mining project on Halmahera Island, Maluku, proposing to employ the controversial submarine tailings disposal (STD) method of dumping waste under the sea (see DTE 45);
  • Nusa Halmahera Mineral, majority-owned by Newcrest of Australia in a joint venture with Indonesia's state mining company, PT Aneka Tambang.

Other companies with mines or concessions in protected areas include: PT Freeport Indonesia (Freeport McMoRan/Rio Tinto); Meratus Sumber Mas (Placer Dome); Newmont Nusa Tenggara (Newmont); Galuh Cempaka (BM Diamondcorp), Inco, Barisan Tropical Mining, KEM (Rio Tinto); Meares Soputan Mining, Newmont Minahasa Raya (Newmont) and Arutmin (BHP-Billiton).


Mining in protected and conservation forest (hectares)

  Protected forest Conservation forest
Island/s Total Mining Total Mining
Sumatra 7,391,502 2,141,950 4,878,520 689,120
Java 728,651   - 468,233 273,300
Sulawesi 4,821,237 996,445 4,821,237 184,617
Nusa Tenggara 651,257 44,200 567,714   -
Maluku 1,809,634 359,640 443,345 159,000
Kalimantan 6,858,792 1,767,580 4,458,887   -
Papua 11,452,990 3,319,000 7,539,300 1,507,000
TOTAL 33,938,350 8,628,815 20,579,347 2,813,037

Source: Kontan 22/Apr/02 quoting Department for Energy and Mineral Resources.


New Regulation

A new Government Regulation (PP 34/2002) issued by the forestry ministry in June may be preparing the legal ground for mining in protected areas. In Paragraph 72, Clause 2, the regulation says that non-forestry activities for "strategic" purposes may only take place in production and protection forests. Those activities include mining (not specified what type) along with defence and security; electricity, renewable energy, telecommunications and water installations. The regulation clearly conflicts with the 1999 law which prohibits open-pit mining in protected forests. This is giving rise to suspicions that the regulation may anticipate a change to the law or a Presidential decree to permit mining in protected forests.

Such a change would contravene Indonesia's international commitments, according to JATAMand WALHI. Indonesia has ratified the Convention on Biodiversity, which obliges it to prevent negative impacts from forest exploitation activities and to develop protected areas with the goal of conservation of those areas.


International hypocrisy

In June, Canada's government piled on diplomatic pressure to assist the mining lobby. According to the Indonesian newspaper Bisnis Indonesia, Canada told Indonesia its ban on mining in protected forests may impede Canadian investment. Citing an advisor to the Indonesian mining minister Purnomo, the paper reported that Canada's Secretary of State for Asia, David Kilgour, asked Indonesia to review its ban on mining in protected forests.

Canadian companies prominent in the Indonesian mining scene, include Inco, Placer Dome and Weda Bay Minerals Inc. Small Canadian exploration companies were largely responsible for the Kalimantan gold-rush of the 1990s, which ended with the notorious Busang gold fraud (see DTE 33:4).

It is hard to see how this diplomatic pressure squares with Canada's apparent concern to save Indonesia's remaining forests. Canada is a member of the CGI - Indonesia's main creditor group - and the CGI's Donor Forum on Forests (Canada's forestry assistance programme to Indonesia currently consists of relatively small projects in forest fire management and social forestry). Along with fellow CGI members, Canada has demanded action against forest destruction - (see Forests, People & Rights p.28). Support for the forestry minister's resistance to a change in the law would seem to fit in with these priorities, rather than pressure for changes which permit more forest clearance.


Fundamental reform needed

The battle to uphold law 41/1999 is seen by NGOs involved in the campaign as a holding operation - using existing legislation to keep mining out of some of Indonesia's last remaining forests.

Most civil society organisations would agree that this is a pragmatic approach, which does nothing to lessen the urgency for fundamental reform in the way Indonesia's forests are managed. The ban on open-pit mining in protected forests does not mean that Law 41/1999 is a "good" law in other respects. One of the main problems with this law, like its 1967 predecessor, is that it asserts state control over almost all forests thereby denying the land and resource claims of Indonesia's millions of indigenous forest-dwellers. Imposing protected or conservation status on certain areas without consultation with local peoples is just another kind of violation (see Poboya case below, for example, where communities are opposing mining and 'forest park' status on their lands because both threaten their livelihoods in different ways.)

Indonesia's indigenous peoples want their control over their forests legally recognised and their right to a decisive voice over projects in their areas to be respected.

(Source: Laksamana.Net 17/May/02 via Joyo Indonesian NewsKontan 22/Apr/02; Koran Tempo 14/Jun/02; Kerebok 3/21 Apr/02; JATAM/WALHI press release 4/Apr/02; Bloomberg News25/Jun/02 via Joyo Indonesia News)