Dayak people of Indonesian Borneo taking on BHP Billiton

Jennifer Natoli

The Dayak people of Indonesian Borneo have been fighting against the world's largest mining company for several years in an effort to stop a series of massive coal mines that would decimate primary rainforest, pollute water sources, displace indigenous peoples, and further jeopardise endangered orangutans. After years of protest, it appears they are gaining significant ground in their struggle.

Since the 1990s Australian mining giant BHP Billiton has held concessions to build several coal mines in Central Kalimantan. Known as the IndoMet Coal Project (ICP), the seven licensed regions are worth a reported $1 billion and cover an area of 350,715 hectares, approximately one and a half times the size of the Australian Capital Territory. The proposed project is estimated to hold 1.27 billion metric tons of coal resources, mainly metallurgical coal used to make steel.1

In April 2010, BHP sold 25% of the IndoMet stake to Adaro, Indonesia's largest coal producing company, for $350 million. At the time, the two companies anticipated commercial production to commence no later than 2014.2 However, the success of IndoMet was largely reliant on the construction of a massive railway needed to transport the coal for export.

The proposed railway would have spanned 425 kms and carried a $2.8 billion price tag.3 The railway would not have been accessible to passengers between cities. Instead, its sole purpose was to transfer coal from mines near Puruk Cahu, in the north of Indonesia's Central Kalimantan province, to a port in Bangkuang. The project would have sliced through the Barito and Mahakam watershed areas which sparked concern among environmental groups.4

Many local residents feared the construction of the railway would further accelerate the destruction of forests and fragile ecosystems in the Heart of Borneo.4 The Heart of Borneo initiative was signed in 2007 by the governments of three trans-Bornean nations in an attempt to conserve 220,000 sq kms of forest across Brunei, Indonesia and Malaysia. This region is home to 6% of the world's biodiversity, as well as the headwaters of 14 major rivers which provide clean water to 11 million people.5

The Puruk Cahu-Bangkuang railway was initially drafted as part of Indonesia's Master Plan for the Acceleration and Expansion of Economic Development (MP3EI). The MP3EI was unveiled in 2011 by previous President Susilo Bambang Yudhoyono6, with an ambitious goal of raising gross domestic product (GDP) to $4.5 trillion, increasing the per capita income from $3000 to $15,000, and elevating Indonesia into the ranks of the world's 10 largest economies by 2025.7

Newly elected President Joko Widodo, known colloquially as Jokowi, has expressed concern over the MP3EI program, appearing sympathetic to concerns from environmental and indigenous rights groups who argue that the development plan relies too heavily on exploiting natural resources and large-scale agricultural investments which would wreak havoc on the environment and leave countless communities vulnerable to land grabs.4 Andi Widjajanto, newly appointed Cabinet Secretary and arguably Jokowi's closest aide8, claims Jokowi will factor in environmental concerns and protecting indigenous cultures when considering infrastructure development, instead of solely focusing on economic gains.9

Railway

Like several other MP3EI projects, the railway can only be granted approval if financed through a public-private partnership, meaning both the government and one or more private-sector companies must contribute funding in order for construction to begin.4

In April 2014 a consortium led by China National Railway won the tender to develop the railway, but the project could not continue without finalisation of government regulations and financing.10 With this in mind, environmental groups in Indonesia ramped up their demands that the government withdraw funding for the railway, knowing that without a railway to transport coal the IndoMet project would come to a grinding halt.4

Arie Rompas, executive director of Friends of the Earth-affiliated WALHI Central Kalimantan branch, is one of leading critics of the railway and IndoMet coal project. "We are extremely conscious of how these mines will affect our communities that have depended on forest and rivers systems like the Barito Basin for their livelihoods for generations. Megaprojects risk displacing communities, impacting on their health through air and water pollution, and compromising livelihoods based on small-scale farming."11

Rompas is not overreacting. The region is home to several villages − as well as the already jeopardised orangutan, with an estimated population of between 45,000 and 69,000 − and is threatened by resource development, more commonly from palm oil production.12

Concerns from locals appear justified as this is not the first time the Dayak people have been promised development and growth only to be let down. Rompas claims, "In my home region we have already seen the destructive effects of resource projects. Some people have sold their communal land to the resource companies but have not seen any long-term prosperity from these mining operations."13 Rompas is referring to the destructive effects of gold mining in the Barito Basin.

Speaking tour

To spread awareness of the IndoMet coal project, Arie Rompas along with other members of WAHLI teamed up with Friends of the Earth Australia in November 2013 for a ten day speaking tour.14 Just one year later Rompas was back in Australia speaking at the G20 People's Convergence Summit in Brisbane, a counter summit to the infamous G20.

Perhaps the biggest impact of his 2014 visit was the media attention he gained at the BHP Billiton annual general meeting in Adelaide. Rompas was the first to stand up and challenge BHP Billiton chair Jac Nasser. "We get our food from the forest, our culture is tied to the forest. If BHP follows up with the Indomet project, we are concerned that we will lose our forest and our identity. ... My question for you is: will BHP Billiton move forward with the project if local people and the international community are against you?"5

Nasser quickly dismissed Rompas, saying he would have Dean Della Valle, president of BHP's global coal ventures, provide a comprehensive brief on the project. Arie claims Della Valle did not answer his questions about the railroad. "They didn't want to say if they had contributed to the project or whether they wanted to participate it in. But if you ask me, of course they want the railway."5

Aries summed up the BHP experience: "We are not very happy because what we want is for BHP to not go ahead with the Indomet project or any activity over there [in his home region]. But they just said that they will try and minimalise the environmental impact of the mine. They wouldn't give any guarantee as to how they would recognize the community's rights."5

Review

Whilst on the campaign trail in 2013, President Jokowi promised the railway project would be reviewed, taking into account concerns from local communities and environmental groups. In November 2014, Deddy Priatna, the deputy head of infrastructure at Indonesia's National Planning Body (Bappenas), formally announced the project would be placed under review.5

WALHI/Friends of the Earth Indonesia seized this opportunity to have their voices heard. After a meeting between WALHI and several government officials, the Minister for National Development Planning, Adrinof Chaniago, announced on 4 December 2014 that the Central Kalimantan railway would not be incorporated into the Medium Term Development Plan for 2015−2019 and will not receive public-private partnership status or government guarantees.10

While responding to questions regarding their decision, the Ministry made its stance clear, arguing the railway is contrary to government policy which seeks to expand coal development for domestic consumption, not for export.15 The Ministry is also concerned that the project would have only benefited the mining companies, ignoring the needs of the general population.10

Arie Rompas responded to the decision: "Central Kalimantan, particularly the Murung Raya regency in the north, has a population density of 4 people per square kilometer. The proposed Central Kalimantan Railway is not needed for local people, and would be built to enable large quantities of coal to be mined and shipped to Asian markets. We welcome the decision by Mr. Chaniago to put a stop to this project. We now call on the Central Kalimantan Provincial government to put a halt to all plans to develop this railway."10

As Indonesia's population heads towards 300 million by 2035, the competition for land, energy and food is becoming fierce. Annual forest fires, the clearing and draining of carbon-rich peat swamps and increasing deforestation are responsible for about 75% of Indonesia's greenhouse gas emissions. With a goal of cutting emissions by 26% below current levels by 2020, the Jokowi-Kalla administration must rein in deforestation and curb forest fires.1

In addition, the government is faced with several difficult choices regarding already existing concessions on natural resources. At present, coal mining concessions, such as the ones held by BHP Billiton, cover 21.25 million hectares. Additionally, mining concessions of all types cover approximately 34% of the country. When timber and logging, oil, gas, and palm oil concessions are taken into account, 68% of the country has already been allocated for destruction.1 Environmental and human rights groups will need to continue to apply pressure to ensure the administration moves forward with their best interests in mind.

References:

1. Fogarty, D. (2014). 'Indonesia's Choice: Coal vs. Environment'. www.theepochtimes.com/n3/1027405-indonesias-choice-coal-vs-environment/

2. Latul, J. & Wulandari, F. (2010). 'Update 1 - Indonesia Adaro to pay $350 mln for Maruwai stake'. http://uk.reuters.com/article/2010/04/01/adaro-indonesia-bhp-idUKJAK2374...

3. Osman, N. (2012). 'Central Kalimantan's $2.8b coal railway to kick off early next year'. www.thejakartapost.com/news/2012/11/14/central-kalimantan-s-28b-coal-rai...

4. Parker, D. (2013). 'Coal railway could cause 'ecological disaster' in Indonesian Borneo, warn environmentalists'. http://news.mongabay.com/2013/0930-dparker-indonesia-coal.html

5. Harrington, M. (2014). 'The hunt for minerals in the coaled Heart of Borneo'. www.newmatilda.com/2014/11/26/hunt-minerals-coaled-heart-borneo

6. Franken, J. (2011). 'Analysis: Indonesia: Thinking big'. www.thejakartapost.com/news/2011/06/13/indonesia-thinking-big.html

7. 'Masterplan for Acceleration and Expansion of Indonesia's Economic Development'. (n.d.). www.indonesia-investments.com/projects/government-development-plans/mast...

8. Saragih, B.B.T., & Parlina, I. (2014). 'Andi Widjajanto named as Cabinet secretary'. www.thejakartapost.com/news/2014/10/31/andi-widjajanto-named-cabinet-sec...

9. Sundari. (2014). 'Jokowi to revise MP3EI project'. http://en.tempo.co/read/news/2014/09/03/056604143/Jokowi-to-Revise-MP3EI...

10. Aviva. (2014). 'Central Kalimantan railway gets thumbs down from Jokowi administration'. http://endcoal.org/central-kalimantan-railway-gets-thumbs-down-from-joko...

11. Rompas, A. (2013). 'BHP in Indonesian Borneo: the coal disaster waiting to happen'. www.abc.net.au/environment/articles/2013/11/19/3893451.htm

12. Milman, O. (2013). 'Fears for orangutans: BHP urged to abandon coalmining in central Borneo'. www.theguardian.com/environment/2013/nov/07/fears-orangutans-bhp-urged-a...

13. Walker, C. (2013). 'BHP and Leighton holdings to drive deforestation and mining in Indonesian Borneo's rainforests'. www.foe.org.au/articles/2013-11-07/bhp-and-leighton-holdings-drive-defor...'s

14. BHP-Leighton mine 'to speed Borneo deforestation'. (2013). www.businessspectator.com.au/news/2013/11/8/science-environment/bhp-leig...

15. Denton, J. (2014). 'Worst of worst' coal project in Kalimantan in doubt after snub. http://thejakartaglobe.beritasatu.com/business/worst-worst-coal-project-...

From Chain Reaction #123, April 2015, national magazine of Friends of the Earth, Australia, www.foe.org.au/chain-reaction/editions/123

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