Protests at PT TEL pulp plant

Down to Earth No. 44, February 2000

Community anger is being directed at the newly completed plant in South Sumatra

The PT TEL paper pulp factory at Muara Enim, South Sumatra was completed in November 1999 and started production trials in December with a view to full production by January 2000. The US$1 billion development is financed largely by Japanese, European and North American companies and banks. Equipment and technical services have been provided by Scandinavian, German and Canadian companies backed by Export Credit Agreements. This is yet another example of how the interests of foreign investors and export revenues are being put before the health and sustainable livelihoods of local communities in the name of 'economic development'.

Tension between local communities and the management of the Tanjung Enim Lestari (PT TEL) paper pulp plant erupted into violence in mid-December. Frustrated by the lack of progress in negotiations over land compensation and local employment, around 800 people from six villages came to the plant on 15th December demanding to meet the management. When PT TEL refused, the crowd stoned company buildings and set fire to log piles on the site. Several pieces of heavy equipment were burnt and some offices and workers' accommodation were damaged. PT TEL workers fled and one manager was injured. According to PT TEL Managing Director, Jansen Wiraatmaja, as much as 200,000 of tonnes of timber - stacked on the site in readiness for production trials – may have gone up in smoke, costing the company Rp150 billion (US$21 million). Other sources claim the wood was rotten and damage had been exaggerated by the company and the military.

The local military chief claimed villagers had plotted to raze the site to the ground. Four molotov cocktails were found by security forces who had been guarding the site for several weeks. They arrested eleven locals suspected of organising the attack. According to local sources, the protest was orchestrated by outsiders who paid students and villagers to take action and the molotov cocktails were planted later. Those arrested were released without charge.



Local communities from Banuayu, Niru, Tebat Agung, Beringin, Muaraniru and Jemeneng admit that some villagers did set fire to the logs. Many of them are disappointed that PT TEL has been slow to settle land compensation claims and has not offered sufficient employment to local people. In recent months the last of the villagers who had refused to give up their land for the factory site gave up their struggle as the factory neared completion and reluctantly agreed to accept compensation. Local NGOs are concerned at the extent to which the military, police and local security forces are siding with the company in intimidating the communities.

For example, a meeting between representatives from Gerinam, Niru, Banuayu and Dalam villages and PT TEL on December 8th to discuss compensation for land taken for the factory was held inside the PT TEL site. The location was guarded by 250 uniformed security forces armed with pistols and M-16s who did not allow any other villagers in. The NGOs WALHI South Sumatra, LBH Palembang, IMPALM and LEMBAR are calling for police and military personnel to be barred from such negotiations and demanding that the local military command explain why troops are guarding the site.


First signs of pollution

Local resentment increased further once the PT TEL factory began production trials. By 13th December, villagers from Banuayu (2km north of the plant) reported a foul smell and dead fish floating in the River Lematang. The estimated 30,000 people living in neighbouring communities have no idea about the potential environmental impacts of the pulp plant.

The Environmental Impact Assessment (EIA) commissioned by PT TEL was presented to the government in June 1997, but the final version of the EIA and detailed Management Plans incorporating government and NGO recommendations from the official hearing was never made public. The EIA estimates that, even with waste management technology operating optimally, 15 kg of sulphurous gases will be released for every tonne of pulp. Since the plant has an annual production of 450,000 tonnes, this alone is equivalent to 18 tonnes of air pollutants per day, without taking into account nitrogen and chlorine compounds. This is in addition to the 70,000 cubic metres of effluent pouring into the River Lematang daily and some 50 tonnes of ash and other solid waste to be dumped in landfill sites near the river.

Local environment and students groups are co-operating to raise public awareness of the potential risks from PT TEL's emissions. For example, on November 18th 1999, two members of the Muara Enim community addressed over 100 students and academics at a workshop on 'The impact of chlorine on people and the environment', organised by the economics faculty of Sriwijaya University, the biggest of Palembang's universities. A few months before, the student environmental group of the Agriculture faculty held a one-day on 'The Ecosystem of the River Musi Watershed' in order to stimulate public discussion about the impacts of PT TEL/MHP. About 100 people including managers of PT TEL, the local Environmental Management Agency and local government officials as well as lecturers and students attended.


More PT TEL promises

In an attempt to resolve the conflict, a meeting was held to address local grievances. Representatives of six villages engaged in tense negotiations lasting several hours at a luxury hotel in Palembang with PT TEL's Managing Director. The six villagers were greatly outnumbered by senior members of PT TEL, the civilian administration (including the district administrator, governor's assistant and head of the local administrative assembly) and local military and police. PT TEL agreed to take on 250 local people as plant workers and to subsidise the education of 200 children from neighbouring communities. It also promised to establish two traditional markets in nearby villages and to fund a co-operative. The company and local government refused to discuss the recent fish kills in local rivers, villagers' complaints about the stench from the factory or any pollution risks. Recent reports state that there is still high military presence around the plant, including in neighbouring villages.

Despite management claims that PT TEL workers (including foreign staff) were reluctant to return and that plantation feeder company PT Musi Hutan Persada would not deliver more raw materials, PT TEL was still able to go ahead with production trials the week following the fire. Jansen announced that the paper pulp would be exported from new harbour facilities under construction in Bandar Lampung.

NOTE: DTE has some film footage of the PT TEL plant suitable for newsbroadcasts. An up-date of DTE's information pack on the PT TEL/MHP issue should be available in April 2000.

(Sources: Sriwijaya Post 14/Dec/99, 16/Dec/99, 17/Dec/99; Joint Press statement Lembaga Advokasi Rakyat, Walhi SumSel, LBH Palembang, IMPALM 17/Dec/1999 and local sources.)


MHP: PT TEL'S problematic feeder plantations

PT Musi Hutan Persada, - like PT TEL, a Barito Pacific subsidiary – was one of two companies found guilty of contributing to devastating forest fires in South Sumatra in 1997 by illegally burning to clear plantation land. Despite strong evidence from satellite imagery and an expert witness from WWF in the original hearing, the provincial administrative court in Palembang quashed PT MHP's conviction on 3rd November 1999 after the company appealed. Local NGOs, WALHI South Sumatra and LBH Palembang, who brought the court case are determined to challenge this verdict through the Supreme Court in Jakarta. They issued a strong statement commenting that the provincial court's decision demonstrates how hard it is to obtain environmental justice, despite Indonesia's new regime (Sriwijaya Post 14/Dec/99).

LBH Palembang will also be taking the case of villagers from Sungai Baung to a higher court after a local judge dismissed the case on the grounds that MHP's conversion of forest to plantation had nothing to do with environmental issues and could not be brought under the 1997 environment act. The judge also refused to recognise that the 141 community representatives who brought the 'Class Action' had valid proof of land ownership (Sriwijaya Post 7/Sep/99).

Meanwhile, PT MHP has reneged on an agreement to return 16,000 hectares to the people of Kapak Tengah 1 (Rambang Lubai) after a joint inspection team of local government and company staff showed that the plantation had illegally taken their land. The local people are demanding that their land is returned and the company provides over Rp 650 billion (US$87 million) for the 9 years they have been deprived of their forest, plantations and agricultural land. The conflict caused hundreds of PT MHP contractors bearing chainsaws to protest at the governor's office since they had been laid off during the investigation and settlement procedure (Sriwijaya Post 9/Oct/99, 1/Nov/99, 8/Nov/99).

PT MHP's 300,000 ha concession is likely to be the focus of corruption charges in new moves by forestry minister Nur Mahmudi to address corruption associated with the Suharto family and its cronies. An internal investigation by the Department of Forests and Plantations indicated that PT MHP was implicated in the mis-use of nearly Rp350 billion (US$50 million) from the Reforestation Fund. Suharto's daughter 'Tutut' (Siti Hardiyanti Rukmana) was a close business associate of business tycoon Prajogo Pangestu who owns PT MHP and PT TEL and was a nominal shareholder in both companies (Kompas 22/Jan/00).

In December, six villages in Rambang Lubai (Muara Enim district) suffered from serious flooding. The villagers blamed the floods on the conversion of natural forest cover to large-scale commercial plantations of oil palms and fast growing tree-species for pulp factories, including PT MHP. Palembang local authorities also blamed findings that 5 million cubic tonnes of mud per year are silting up the River Musi, South Sumatra's main river, on the establishment of extensive plantations in the province. Dredging operations costing Rp8 billion can only remove some 2 million tonnes of sediment annually (Walhi SumSel press releases 14/Dec/99, 6/Jan/00).