News on Indonesia

Stay away from the Toka Tindung gold mine on Sulawesi!

2010-04-05T13:29:00.001+07:00

Open Appeal to ANZ, Standard Bank and BNP Paribas:

Stay away from the Toka Tindung gold mine on Sulawesi!

We, the undersigned organisations, herewith express our deepest concern about the apparent interest of BNP Paribas, ANZ and Standard Bank to financially support the development of the gold mining operation Toka Tindung on the island of Sulawesi, Indonesia. The mine is owned by subsidiaries of Archipelago Resources; PT Meares Soputan Mining (MSM) and PT Tambang Tondano Nusajaya (TTN). Given the history of this project we are appalled that banks of such international standing seriously consider entering this project.

The project is vigorously opposed by the people of North Sulawesi, who feel that their livelihoods and living environment are being threatened by the mine. We call upon BNP Paribas, ANZ and Standard Bank to terminate their due diligence processes, to refuse any financial support either to the project or to the project sponsors, and to withdraw completely from this project.

This in consideration of the following:

That the project has always faced strong resistance by the people of North Sulawesi.

For good reason a majority of the people in North Sulawesi is strongly opposed to the gold mining operations. These include local fishing communities, the fishing industry, the North Sulawesi tourist industry, environmental groups and people living near the tailings dump, who are most at risk. People are determined to oppose the company and the project, as they risk losing everything they have. Already various lawsuits have been filed. In December 2009, the Coastal people's alliance against tailing AMMALTA filed a lawsuit against the Minister of Environment asking for the approval of the Environmental Impact Assessment (EIA) to be cancelled as it violates several government regulations. This lawsuit is being processed and first results are to be expected soon. If Toka Tindung will come into operation this will likely lead to social, as coastal people vigorously reject the gold mine.
That the project is surrounded by suspicions of bribery and corruption.

The Provincial Parliament and -- in December 2007 - the Governor of North Sulawesi have clearly said "No" to Toka Tindung, but despite this the London AIM-registered mining company, Archipelago Resources, forced through the development of the mine, manipulating Indonesian law and bribing government authorities to approve the previously rejected EIA. This happened after the re-election of Indonesia's President Susilo Bambang Yudhoyono, whose campaign is known to have been financed by the majority shareholder of Archipelago Resources, Indonesian tycoon Peter Sondakh.

That issuing of the Environmental Impact Assessment (EIA) violates two Indonesian laws.

On October 5, 2009, the former Minster of Environment, Rahmat Witoelar, finally approved the EIA, despite his own continued statements that he would not allow Toka Tindung to proceed. This was during his last five days in office and three days after a new government regulation had been passed. With the approval,

Witoelar violated two Indonesian laws:

1. The approval of the EIA is the authority of the provincial governor, not of the minister's.

2. He signed on grounds of a government regulation that was cancelled and thus not valid any more. That the history of mining enterprises in Indonesia is laden with human rights violations. The company's security forces have time and again attacked peaceful demonstrations by local people, severely injuring some of them. In July 2006, several thousand fishing and farming people staged a peaceful mass demonstration demanding that Archipelago Resources cancel the gold mine and leave North Sulawesi. On their way home they were attacked by men known to belong to MSMs security forces. Several demonstrators suffered severe head injuries and a woman seven months pregnant had a miscarriage. The case was never properly investigated. As vice governor Freddy Sualang is cited in Komentar (October 4, 2006 edition): "it cannot be that people who peacefully demonstrate are terrorized in their aspirations."

That the project will cause severe economic damage for the people of North Sulawesi.

As Toka Tindung is located in a densely populated area it directly endangers the villages in its immediate surroundings with contamination. A possible overspill of fine tailings mud presents a real danger to the bay of Rinondoran which is the heart of the local fishing industry. North Sulawesi's main economic pillars are tourism, fishery and agriculture. All three are viable sectors which will suffer severe damage if Toka Tindung starts operating. Thousands of people will loose their jobs, in return for only a few hundred jobs for a period of -a company-projected mine life of- at most eight years. The destruction of a healthy environment and the very livelihood of thousands of people will lead to sudden man-made poverty in this rich province of North Sulawesi.

That the project poses many environmental threats.

The area harbours some of the most biodiverse and most fragile ecosystems in the world, many of them unique. The nature reserves of Tangkoko and Dua Saudara, which are directly adjacent to the mining area, are home to many endangered mammal, bird and reptile species. Archipelago will extract the gold at Toka Tindung using cyanide lye, which it is feared will infiltrate the groundwater. There are also grave concerns regarding the storage of tailings, as the concession area is known for its frequent earthquakes and volcanic activity. It can therefore not be guaranteed that toxic waste will not enter the ecosystem, especially in a business environment as corrupt and inefficient as Indonesia's. The project will also have a devastating impact on local water supplies, as the gold mine will use large amounts of water. It thus endangers the clean water supply for the international harbour city Bitung which is the heart of North Sulawesi.

That Archipelago is a small start up-company, which might cause severe financial risk (to your banks).

The Toka Tindung project is the first goldmine developed by Archipelago and Archipelago is therefore faced with enormous financial pressure. The company is currently operating at a loss, since it has no other viable operations aside from Toka Tindung. We, the undersigned organisations, are appalled that after all previous banks and project finance syndicates (except ANZ) have pulled out of this project and did not provide working capital for the Toka Tindung gold mine for the obvious reasons, BNP Paribas, ANZ, and Standard Bank are again considering this project. BNP Paribas, ANZ, and Standard Bank have all adopted policies that publicly commit you to socially and environmentally responsible banking norms, such as the Equator Principles. The Toka Tindung gold mine project is in clear violation of your sustainability aspirations, and seriously puts into question the sincerity of your commitments. We feel obliged to warn BNP Paribas, ANZ, and Standard Bank that supporting a project which local people reject, which will harm unique ecosystems and already endangered species, which will cause severe economic damage for the local communities, which is surrounded by corruption and bribery, and which violates basic human rights, will create a lot of damage to your reputation.

We therefore urge you to immediately reconsider your positions and to drop all considerations of financing this financially unstable, environmentally destructive, and socially insensitive project.

Signed:

BankTrack, International

Les Amis de la Terre, France

The Mineral Policy Institute, Australia

AMMALTA North Indonesia, Indonesia

Walhi/Friends of the Earth Indonesia

Jatam, Indonesia

Indigenous Peoples Links (PIPLinks), UK

London Mining Network, UK

Rainforest Rescue, Germany

Watch Indonesia, Germany

Robin Wood, Germany

urgewald, Germany

Friends of the Earth EU, Europe

More information about the Toka Tinding goldmine project can be found on

http://www.banktrack.org/show/dodgydeals/toka_tindung_goldmine

For enquiries about this appeal please contact:

BankTrack, Sonja Willems, campaign officer

sonja@banktrack.org

BankTrack

Vismarkt 15

6511 VJ Nijmegen

The Netherlands

E: sonja@banktrack.org

T: 0031 24 3249220

www/banktrack.org

Palm Oil: 10 Million Indonesian’s Prepare to Strike Back

2010-03-30T08:38:00.004+07:00

(what is this, actually? Sinar Mas and its friends threaten Nestlé with a cosumer boycott of 10 mio people. It may be taken for granted that all - I mean ALL - Indonesians are consumers of at least some Nestlé's products. 10 mio people means that Sinar Mas and friends believe they may have a say on the consumption patterns of maximum about 4 % (four percent) of Indonesian consumers (probably for a couple of weeks...). It's a threat. But not a very convincing one.)

Palm Oil – The Green Development Oil Newsletter, Issue 6, March 2010

10 Million Indonesian’s Prepare to Strike Back

Indonesian palm oil producers have hit back against the Nestlé ban on Sinar Mas palm oil, stating a willingness to boycott Nestlé products following the company’s capitulation to Greenpeace’s intimidation tactics.

In a new report entitled “Caught Red Handed: How Nestlé’s use of palm oil having a devastating impact on rainforests, the climate and orang-utans,” Greenpeace claims that palm oil produced by Sinar Mas, which they claim is devastating the Indonesian rainforest, was being used extensively in Nestlé products including Kit Kat.

While Nestlé has been quick to sell out Indonesia’s poor to protect its corporate image, Indonesian palm oil producers may soon return fire.

A recent statement by the Association of Indonesian Oil Palm Farmers (Apkasindo) flagged a possible boycott of Nestlé products by 10 million Indonesians, citing the devastating impact Nestlé’s actions would have on millions of Indonesian palm oil producers.

Nestlé’s capitulation to Greenpeace and refusal to consider the millions of Indonesians living in poverty is an indictment on the company and any claims to be socially responsible.

The claims by Greenpeace and supported by Nestlé are part of a long running campaign against Sinar Mas which is riddled with inconsistencies, exaggerations and misleading information.

Nestlé’s image as a socially responsible corporation also extends to a duty to consider the poverty stricken whose lives are harmed by their PR-driven capitulation, not just western NGOs.

What is destroying our rainforests? Greed, palm oil

2008-12-31T15:12:00.002+07:00

The establishment of oil-palm plantations in Kalimantan and Sumatra poses the greatest threat to orangutans today. In fact, the clearing of forest and the establishment of oil-palm plantations has a negative impact not only on orangutan populations but also on climate, the water cycle, carbon emissions and livelihoods in local communities.

Although many people are aware of these facts, oppose the development of biofuels from palm oil and oppose the creation of these plantations, the destruction of the rainforest continues.

The effects of land-clearing are simple and obvious once you have seen it with your own eyes. It is even easier when you witness the rescue of orangutans or experience breathing difficulties and stinging eyes from the smoke of burning forest and peat.

When we consume destructive palm oil in crispy chips or delicious chocolate, or wash our hands with sweetly fragranced soap, we are very rarely conscious of the adverse effects our activities incur. Because we don't feel the negative impacts firsthand we can't imagine the way our behavior influences nature and the lives of people on a faraway island. Meanwhile the destructive oil business continues and the market keeps growing.

Unilever is one of the biggest palm oil consumers worldwide using 1.3 metric tons every year. Its heart-shaped ice cream brand under many names and numerous other brands ---Dove, Sunsilk, Omo, Knorr, Blue Band, Becel, Best Foods, Ben & Jerry's and Findus -- are only a few of the many Unilever companies.

Avoiding products which may contain palm oil is nearly impossible, but as consumers we can all try to do what we can. Many consumers have made an effort to avoid products containing palm oil, and Unilever has been forced to respond, promising improvement by way of ensuring the palm oil they use is "sustainably" produced.

But where should all this sustainable palm oil come from? As worldwide demand for palm oil is so high, it can't be met with only the sustainably grown version simply because not enough is available.

With limited supplies of certified sustainable palm oil only now entering the market, Unilever has had to buy unsustainable palm oil from many companies, one of which is Wilmar Group, one of the biggest palm-oil trading companies in the world, handling at least a quarter of all global palm-oil output. Besides supplying Unilever with palm oil, Nestl* and Cargill are also among Wilmar's customers.

Not only are we eating palm oil, washing our clothes and ourselves with it, driving cars and producing electricity fueled by it, but our savings are often invested in banks connected with this biofuel that is helping destroy the planet. Among Wilmar's financiers are Rabobank, ABM Amro, Standard Chartered, Citibank, IFC of the World Bank, OCBC, Fortis and ING.

Just as Unilever has many brands which we might assume are independent local companies, Wilmar International also owns plantations under different company names and buys palm oil from family-related companies as well, such as from the Indonesian Ganda Group. Wilmar's plantations are situated in Kalimantan, Malaysia, Sumatra and Uganda. Their plantations cover nearly 600,000 hectares, and are proposed to grow to up to 1 million hectares, an area as large as South Korea. Two-thirds of these lands still must be cleared of forest and planted with palms.

Forest where orangutans were known to live have been cleared illegally. Plantations were established without official permission or environmental impact assessments. After immense pressure by NGOs, Wilmar International admitted in February 2008 it had violated its own plantation development policies in Indonesia.

Since Wilmar is planning to set up plantations in Central Kalimantan in Borneo, large-scale forest destruction and burning awaits that region. With the merging of PPB Palm Oil and Wilmar International, Wilmar now has 16 subsidiaries in Central Kalimantan. Most of the approximately 250,000 hectares have still not been developed. Another 250,000 hectares in Central Kalimantan are allocated for other companies' plantations;
concessions covering one million hectares in all have already been handed out.

Existing forest should be protected from more onslaughts and oil-palm entrepreneurs should be forbidden to clear further. This and other steps are laid out in the Indonesian "Oranguatan Conservation Strategy and Action Plan", which should be enforced and implemented.

"To save orangutans, we must save the forests," the Indonesian President said in December 2007.

That is quite true, but implementation looks quite different. Companies are still cutting down forest and setting fire to peatlands as the cheapest and quickest method to clear new ground for yet more oil-palm plantations.

We see a nightmare relentlessly approaching. The forests will burn and orangutans will have to flee or die of hunger. Borneo is a hotspot of endemic plants and animals, hosting creatures most people haven't seen in their lives and natural medicines (which the resident Dayak people know well and use), but Borneo is also a hotspot for destruction,
suffering and death.

Let your voice be heard. We as consumers are driving the market. Because of our consumption, companies make a profit from rainforest destruction.

Be concerned about your consumer behavior and show your concern by
writing to companies. Help us save what is left!

Obamania In Indonesia

2008-09-03T14:29:00.001+07:00

If Indonesian citizens could vote in the

U.S.

elections, Barack Obama would certainly be the winner. One of the reasons for this is his special relationship to

Indonesia

. Obama, who was born in Hawaii, moved to

Indonesia

at the age six to live with his mother and stepfather, attending local schools until the age of ten when he returned to Hawaii to live with his maternal grandparents. His campaign has been widely covered in the local media, and posters of Obama are sold by stores and vendors.

However, Obama is not just treated as an “Indonesian” presidential candidate, he is even being used as a “template” for the presidential elections in Indonesia 2009. Since the Indonesian presidential candidates are established politicians from the older generation—some of them even have backgrounds in the Suharto dictatorship—it is not only the younger generation that hopes for a real “change” in Indonesian politics. Because of this development, the largest party in the upcoming elections could be the “non-voters”.

Despite ten years of political reforms and economic recovery after the fall of Suharto, growing social injustice has added to the disappointment and frustration felt especially among the young elites. Those who do not seek an alternative in political Islam look at Obama and his campaign in the

U.S.

The way Obama has outrun the established political clan of the Clintons has inspired young and fresh Indonesian political hopefuls, some of whom were educated in the

U.S.

, to present themselves in the political landscape of

Indonesia

. Their ongoing features and advertisements in print and electronic media copy the Obama campaign style and sometimes mix Indonesian and English language. One slogan, that of Rizal Mallarangeng, is “Harapan Baru –Harapan Kita (New Hope – Our Hope) Where there is a will there is a way”. While this may not bear fruit in 2009, “Obamania” is preparing the ground for the next elections in 2014.

The enthusiasm for Obama does not only stem from his personal ties to

Indonesia

or charismatic image. People here believe that if Obama became President, the relationship between the

U.S.

and

Indonesia

could be renewed. Though the

U.S.

is a major international actor for

Indonesia

, the image and reputation of the states has suffered since the fall of Suharto in 1998. The support of the

U.S.

administration for Suharto, for the war in

Afghanistan

, and for the war in

Iraq

have all damaged the image of the

United States

Due to Obama’s affinity for a country like

Indonesia

with a large Muslim population, people here hope for more cultural sensitivity as compared to the Bush administration. They also trust that Obama would be more successful in handling conflict in global hotspots such as the Middle East. Of course, the expectation is that

Indonesia

will in the future have a more central role in the

U.S.

foreign policy towards Asia.

However, it is probable that few Indonesians have examined the domestic political agenda of Barack Obama. If Obama’s domestic agenda was more well known, many Indonesians might reconsider their support and sympathy. Obama’s liberal viewpoint on issues like same-sex marriages and abortion would be widely rejected in this country that embraces religious pluralism but is dominated by a majority of faithful Muslims. But “Obamania” in

Indonesia

does not stand for his political agenda in the

U.S.

or for a change in foreign policy: Indonesians see Obama as a good friend of

Indonesia

and a symbol for “change”.

Indonesia to Amend Law, Boost Plane Safety Checks After EU Ban

2008-08-20T11:01:00.001+07:00

By Arijit Ghosh and Woro Widya Utami

July 25 (Bloomberg) --

Indonesia

will amend a law on aircraft inspections and increase the number of required safety checks to enable PT Garuda

Indonesia

and other carriers to get approval to fly to Europe.

Indonesia

expects parliament to enact a law to allow inspectors direct authority to ground planes, Bambang Ervan, a spokesman at the Ministry of Transport told reporters in Jakarta today. The nation will also have to satisfy 120 more conditions to get back European flying rights, said Pierre Philippe, who heads the European Commission in

Indonesia

has conducted only 16 percent of the required inspections on Garuda, according to the EU. The country had 3.77 fatal accidents for every 1 million takeoffs in the three years to March 2007 compared with a global rate was 0.25. The Indonesian government says the ban since June 2007 is hindering tourism and economic relations with Europe.

``It's really in the hands of the government to move fast,'' Philippe said. ``Our objective is to lift the ban as soon as possible, but it doesn't depend on us.'' The EU yesterday kept all Indonesian carriers on the list that bans them from operating in Europe, with the so-called `blacklist.' No Indonesian carrier flies to Europe.

Indonesia

has just 30 inspectors to conduct checks on the nation's 30 carriers flying to 205 airports in the world's largest archipelago, said Jean-Pierre Ambrosini, coordinator for the Indonesian-EU Partnership for Aviation Safety. The country needs at least 100 inspectors, he said.

``The government will fulfill all the measures required,'' by the International Civil Aviation Organization, Ervan said. According to the current law, inspectors need the transport minister's permission to ground an aircraft, said Philippe.

Garuda had an accident on March 7, 2007, that killed 21 people. Its plane was flown at an excessive speed and at a steep angle when landed at Adi Sucipto airport in Yogyakarta. A PT Adam Skyconnection Airlines' plane vanished off the coast of South Sulawesi on Jan. 1, 2007, with 102 people on board. Its data recorders were found eight months later.

Indonesia Forest is at Risk

2008-08-01T09:23:00.000+07:00

Amid resource boom, investors target land in remote Papua area

By Tom Wright

JAKARTA, Indonesia -- The global resource boom is threatening one of the world's last tropical-forest frontiers: the Merauke region of Indonesia's remote Papua province. Indonesian companies are lining up to develop pulp-and-paper mills in Merauke;investors from South Korea want to expand palm-oil plantations; and Indonesian officials have tried to persuade International Paper Co to invest in the region. Merauke lies on the southern shore of Papua province, a California-size land of virgin forests and pristine rivers, with a population of 2.5 million. Because Papua is so remote, its ecology has been largely spared the kind of destruction wrought on forests in the past 25 years by pulp mills and palm-oil plantations on other Indonesian islands.

The governor of Papua pledged in December at the United Nations climate-change meeting in Bali to protect the province's forests in return for carbon-credit financing from global investors. But these projects are likely to take years to come to fruition; meanwhile paper, palm-oil and other agricultural investors are already staking out Merauke.

Indonesia is under intense international pressure to protect its forests. Last year, Wetlands International, an environmental group, published data showing that fires set to clear forests for agriculture make Indonesia the world's third-largest emitter of carbon dioxide behind the U.S. and China, despite its much smaller economy. Still, record commodity prices and lack of available land elsewhere are driving investors to regions such as Papua. Environmentalists fear the area's forests will be destroyed much like those on Sumatra and Borneo islands, where rare elephants, tigers and orangutan are threatened with extinction.

Medco Group, an Indonesian oil and gas company, has recently begun construction of a wood-chip mill in a remote part of Merauke and plans to start building a 500,000-metric-ton-a-year pulp-and-paper factory in 2012. The plant would be Indonesia's first large new mill since the 1997-98 Asian financial crisis and the first in Papua. Modern Group, a local distributor of Fuji photographic equipment, is hoping to acquire land for a pulp mill in Merauke despite having no track record in paper making, a person familiar with the matter said.

Modern Group declined to comment. International Paper, of Memphis, Tenn., confirmed it has been in talks with Indonesia's forestry ministry about establishing a large plantation somewhere in the country. Hadi Pasaribu, director general of production forest management at Indonesia's forestry ministry, said the government had offered International Paper two areas: one in Merauke and the other on the Indonesian side of Borneo. The company was considering a 1.5 million-ton-a-year mill with a possible investment of more than $3 billion, Mr. Pasaribu said.

Thomas Gestrich, president of International Paper's Asian operations, said the discussions were only "exploratory." The company is looking to develop sustainable forestry operations in a number of countries, including Indonesia, he said. Environmental organizations such as the World Wide Fund for Nature, based in Switzerland, and Washington-based Conservation International are hoping to work closely with investors like Medco to ensure they don't destroy forests. That is a departure from the 1990s, when two Indonesian-owned pulp-and-paper companies -- Asia Pulp & Paper Co. and Asia Pacific Resources International Holdings Ltd. -- established huge mills on Sumatra island without any input from environmentalists. The WWF estimates the two companies have felled an area of natural forest equal to two million hectares in one area of Sumatra alone over the past 20 years. "Development, of course, is needed in Papua," said Nazir Foead, head of the WWF's Indonesian species program. "But we're concerned this could be a repeat of the deforestation in Sumatra and Borneo."Both Asia Pulp & Paper and Asia Pacific Resources say they are committed to setting up sustainable plantations. Both are jockeying to get large concessions of untouched forests in Papua to feed their mills. So far, the companies have managed to win only small parcels of land in the province.

Meanwhile, other investors seek to expand their palm-oil operations in the region, including the Korindo Group, a joint venture between South Korean and Indonesian investors. Medco appears to have the biggest plans for Merauke. The company this year persuaded the local government to grant it a 350,000-hectare concession area near the Bian River. Medco, headed by entrepreneur Arifin Panigoro, is planning to diversify its business from oil and gas through spending $750 million on its pulp-and-paper mill development. It has also set aside $350 million for a plan to develop agricultural and biofuel projects in Papua. The company estimates that $3 billion is needed to develop infrastructure, including roads and ports, and is hoping to attract foreign partners.

Medco contends its mill will be environmentally friendly. The company won't buy any wood from third parties, reducing incentives for illegal logging, said Widjajanto, Medco's corporate secretary. It also plans for the mill to eventually run 100% on wood from its own acacia plantations. In the seven years it will take to establish those plantations, Medco said it will only cut trees in the natural forest selectively and will also set aside 100,000 hectares for conservation in its concession –a swampy area of eucalyptus trees that is on an important migratory route for birds. Jatna Supriatna, who heads Conservation International's local office, said development in Merauke is preferable to northern areas of Papua where forests are more diverse. But he said environmental groups will be keeping a close eye on developments. "We want to make sure that Medco will comply with good corporate governance," he said.