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Indonesia’s antigraft agency strives to rein in the mining sector

  • Indonesia’s anticorruption agency has become involved in a number of initiatives to improve governance of natural resources in the archipelago.
  • One such effort, focused on the mining sector, involves 12 provinces and has resulted in the cancellation of hundreds of permits.
  • This initiative, known as Korsup Minerba, recently produced an assessment of the provinces’ progress in reining in the miners under their watch.

A coalition of NGOs working with Indonesia’s antigraft agency has produced an index on mining practices and supervision in 12 provinces, part of an official effort to combat the prevailing state of illegality in the sector.

Central Sulawesi scored the highest, 68. The province saw a dramatic reduction in the number of hectares in which a mining permit overlaps with a conservation forest, from 300,000 in 2014 to 5,000 in 2015.

South Kalimantan scored the lowest, 32. More than half of the province’s mining licenses are not “clean and clear,” which means they are illegal in some way and should be revoked, according to the coalition.

Hundreds of permits have been annulled since the initiative began in early 2014, when the 12 provinces signed an agreement with the Corruption Eradication Commission (KPK) which committed them to participate.

A mine in Sumatra. Photo by Rhett A. Butler

The initiative, known as the Korsup Minerba – an Indonesian acronym for Supervision and Coordination of Mineral and Coal Mining Management – is one of several drives focused on improving governance of the country’s natural resources.

The index, compiled by the Anti Mining-Mafia Coalition, assesses the local governments’ progress in ensuring that the miners under their watch are following the rules. It considers a variety of metrics, from payment of taxes and royalties to compliance with environmental regulations and data submission requirements.

The authors placed a special emphasis on permits that overlap with conservation forests, given the clear illegality in such cases, said Timur Manurung, founder of the Auriga Foundation, a coalition member.

Overall in the 12 provinces, the amount of overlap fell from 365,000 hectares in 2014 to 158,000 hectares in 2015. But more broadly in Indonesia, Manurung said, that figure remains high, at 1.7 million hectares.

“Yes it is declining, but there is still much to be improved,” he told journalists at the release of the index on Wednesday. “It hasn’t amounted to much yet.”

A gold mining operation in Central Kalimantan. Photo by Rhett A. Butler

In East Kalimantan, the figure jumped from 4,000 hectares in 2014 to 97,000 in 2015. South Sumatra saw an increase from 930 hectares to more than 6,000 last year, and West Kalimantan went from 100 hectares to 2,500 in 2015.

The other provinces – Jambi, South Sumatra, Riau Islands, Bangka Belitung, South Sulawesi, Southeast Sulawesi, East Kalimantan, Central Kalimantan and North Maluku – stayed roughly the same on that front.

In terms of fulfillment of financial obligations, East Kalimantan again fared the worst, with 82 billion rupiah ($6.1 million) in unpaid royalties from miners in the province.

Most provinces saw a significant decrease in the number of permits that have failed to be certified as clean-and-clear by the energy ministry in Jakarta. South Kalimantan, though, saw no improvement, with the number of illegal permits standing at 441 in both 2014 and 2015. Jambi, on the other hand, reduced that figure from 198 to 100.

A baby orangutan in Sumatra. Photo by Junaidi Hanafiah

The coalition called for all noncompliant permits to be revoked, and for the government to release the names of the companies that hold them.

“We think the bad companies should be revealed to the public, including the names of their owners and management,” coalition spokesperson Pius Ginting said.