- A government commission in 2014 found that thousands of mining permits did not meet Indonesia’s legal standards.
- Some local governments have moved to shut down violating companies. In one province, South Sumatra, companies are fighting back in court.
- So far, 10 companies have sued to get their permits reinstated. Five have succeeded.
A court in Indonesia has once again ruled in favor of coal mining companies whose licenses were revoked by the South Sumatra Provincial Government.
A series of lawsuits by coal companies are currently working their way through the Palembang State Administrative Court — a process activists see as a key test of both the resolve and the ability of local governments to stamp out illegality in the mining sector.
In late August and early September, four companies successfully sued to have their licenses reinstated, bringing the total number of successful cases in South Sumatra up to five.
A 2014 review by Indonesia’s anti-graft agency identified problems with roughly 40 percent of the 10,992 mining licenses issued by local officials in 12 provinces, including South Sumatra. Such licenses were deemed not to be “clean and clear,” meaning they had failed to comply with basic laws regarding environmental impact assessments, payment of taxes and royalties, or proper registration of concession boundaries and corporate information.
In response, some local officials took action against violating companies. By April 2017 more than 2,100 permits nationwide were either revoked or allowed to expire without being renewed. In South Sumatra, the provincial government revoked 34 licenses and did not renew an additional 43.
So far, 10 coal mining firms have fought back, suing the South Sumatra government for revoking their licenses. Five of these companies have prevailed in court as of this month.
Most recently, on Sept. 6, the Palembang court ruled in favor of coal miners PT. Trans Power Indonesia and PT. Duta Energi Minerratama.
According to Rabin Ibnu Zainal, director of NGO Pilar Nusantara, the court determined that the companies had already taken steps to resolve the problems with their licenses, and should have been subject to administrative sanctions rather than revocation of their licenses. The gubernatorial decrees withdrawing their licenses were ruled void by the panel of judges overseeing the case, explained Zainal, whose organization monitors coal mining in South Sumatra.
On Aug. 29, the court ruled in favor of PT. Brayan Bintang Tiga Energi and PT. Sriwijaya Bintang Tiga Energi, who successfully argued that the local government did not have the authority to shut down their operations.
“The reasoning of the panel of judges was that both companies are foreign investors, and so the authority to revoke lies with the central government, in this case the Ministry of Energy and Mineral Resources,” explained Zainal.
This followed a June 8 ruling by the same court reinstating the permit of PT Batubara Lahat.
Meanwhile, cases filed by four companies have so far failed. Three of these sued the head of energy and mineral resources for South Sumatra: PT Bintan Mineral Resources, PT Buana Minera Harvest and PT Mitra Bisnis Harvest. Another coal miner, PT Andalas Bara Sejahtera, unsuccessfully sued the provincial governor.
Looking to the future
The government of South Sumatra is appealing the verdicts against it.
In the meantime, environmental activists are concerned that rulings in favor of coal companies will embolden bad actors in the mining sector, and deter officials in South Sumatra and elsewhere from attempting to take action against law-breaking companies.
“This sets a bad precedent,” said Zulfan Setiawan of the South Sumatra branch of the Indigenous Peoples Alliance of the Archipelago (AMAN). Noting that the South Sumatra governor’s actions came in the wake of a nationwide investigation into mining permits, Setiawan said he feared these court cases could have wider implications. “I hope the victory of these companies does not annul or eliminate various matters relating to environmental problems resulting from the activities of coal companies,” he added.
Of particular concern to Setiawan are companies whose activities he said threaten customary land held by indigenous people in South Sumatra.
Across the archipelago, communities living near coal mines have complained of serious negative impacts from mining firms, including water pollution and the dangers of abandoned mine pits, which have claimed the lives of at least 27 people, mostly children.
This story was reported by Mongabay’s Indonesia team and was first published on our Indonesian site on Sept. 18, 2017.
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Banner image: an open pit coal mine in operation, by Tommy Apriando for Mongabay-Indonesia.