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Indonesia rushes to pass bill seen as pandering to mining companies

A container for coal after it has been unloaded from the barges. Image by Ayat S Karokaro / Mongabay-Indonesia.

  • Indonesia’s parliament is rushing to pass a controversial mining bill by Sept. 30, when the current legislators’ term ends.
  • President Joko Widodo had previously asked for deliberations of this bill and other contentious pieces of legislation to be suspended, following massive student-led protests that have turned deadly.
  • Watchdogs say the bill panders to the interests of mining companies, granting them bigger concessions, longer contracts, and fewer environmental obligations.
  • The Widodo administration has also criticized parliament’s rush to pass the bill, but legislators say they are within their rights to do so.

JAKARTA — Indonesia’s parliament is rushing to pass a controversial bill on coal and mineral mining before the current legislators’ term ends on Sept. 30, defying a massive public outcry over legislation seen as favoring the extractives industry at the expense of the environment and vulnerable communities.

The bill is part of a batch of highly contentious pieces of legislation that parliament has been attempting to rush through in its final days. The previous week, parliament had passed in record time an anti-corruption bill widely seen as weakening the national anti-graft commission. That, as well as attempts to similarly push through a controversial criminal code and three other pieces of legislation, including the mining bill, prompted massive protests led by university students.

At least two students have been killed in the protests that have broken out in cities across Indonesia. In the face of the protests, President Joko Widodo has asked parliament to suspend deliberations of the contentious bills, including the one on mining.

But the fact that parliament looks set to pass the mining bill imminently indicates an attempt to cater to the demands of the mining companies that would benefit under the provisions of the bill as it stands, said Merah Johansyah, the executive director of the NGO Mining Advocacy Network (Jatam).

“More than 90 percent of [the bill] facilitates businesses and investors in the mining industry,” he said. “On the other hand, environmental protection and the public interest aren’t accommodated in the bill.”

A key provision in the current 2009 mining law is that the government may not immediately extend expired mining contracts without offering the concessions to state-owned companies first. Under the new bill, however, contract holders would be allowed to automatically renew their permits two more times, for 10 years each.

Several major private companies are set to see their permits expire soon, and would benefit from such a provision. They include coal miners PT Arutmin Indonesia (whose permit expires in 2020), PT Kaltim Prima Coal (2021), PT Multi Harapan Utama (2022), PT Adaro Indonesia (2022), PT Kideco Jaya Agung (2023) and PT Berau Coal (2025).

Aryanto Nugroho, the Indonesia advocacy manager for Publish What You Pay (PWYP), a coalition calling for financial transparency in the extractives sector, said he was concerned that legislators were “trying to smuggle articles [into the bill] that only benefit a small number of people,” namely the companies with contracts that are about to expire.

The bill also stipulates no limit on the size of mining concessions that can be granted; the current law caps the size of mining operations in a single permit to 15,000 hectares (37,000 acres).

Kids in East Kalimantan play near abandoned open-pit coal mines located near their houses. Image courtesy of the Mining Advocacy Network (Jatam).

Incentives for miners

Another contentious article in the bill states the government will provide both fiscal and non-fiscal incentives for mining companies. Those that have integrated their operations with processing and refining facilities or with coal-fired power plants will be granted a mining license for production for up to 20 years, with an automatic extension of another 20 years and the possibility to further renew for another 10 years.

The bill also ensures that mining companies that develop and operate power plants themselves won’t have their mining area reduced when they extend their operations.

Merah said these provisions contradicted Indonesia’s vow to combat climate change by reducing its emissions from the burning of fossil fuels. Coal burning accounted for nearly 60 percent of Indonesia’s energy mix in 2018, and in July this year President Widodo reportedly expressed his intention to wean Indonesia off coal. But as the bill stands, this won’t happen, Merah said.

“This bill will hold Indonesia hostage by its addiction to coal,” he said. “So it’s useless for the government to say that they want to ditch dirty energy.”

The bill also contains articles under which individuals could face prosecution for defending their land rights against mining companies, Merah said. The ongoing criminalization of such land and environmental defenders is already a big problem in Indonesia, he said, with 85 people facing charges in 22 cases between 2014 and 2018.

“It means that the government and parliament didn’t consider criminalization and conflicts when they discussed this bill,” he said. “That’s why I say this bill sides with investors and mining companies, not the public.”

Merah also flagged the lack of provisions protecting the rights of indigenous peoples to their land. “There are no articles that talk about indigenous rights, even though we know that some mining concessions are located on indigenous peoples’ lands,” he said.

Nor is there a requirement in the bill for mining companies to rehabilitate the abandoned mining pits in their concessions once they are done operating. Such a requirement exists in the 2009 law, but compliance is notoriously patchy, with children frequently drowning in these rain-filled pits. The problem will only get worse if the requirement is removed, Merah said.

“The thousands of [abandoned] mining pits became an issue during the presidential debates, because they’ve claimed the lives of many children,” he said. “But Article 99 of this bill says these mining pits can be used for irrigation and as tourism sites. So 90 percent of this bill doesn’t talk about the public interest or about saving the environment.”

A group of locals affected by coal-fired power plants around Indonesia stages a protest in front of the headquarters of President Joko Widodo’s campaign team in Jakarta. Image by Hans Nicholas Jong/Mongabay.

Lack of public participation

Aryanto said activists and people affected by mines around the country had never been invited by parliament to discuss the bill.

“Have the government and the parliament been transparent and participatory in the deliberation of this bill that’s so strategic and relevant to the lives of many people?” he said. “The ones invited [to discuss the bill] were either businesses or academics, but never from civil society, let alone the victims who live around mines. So who are [the legislators] representing?”

Hendrik Siregar, a researcher with the natural-resources watchdog Auriga, also said the circumstances around parliament’s handling of the bill were suspicious.

He noted that the government, when asking that the deliberations be delayed, had cited the fact that it had not yet completed and submitted an assessment of potentially problematic provisions in the bill, known as a DIM. But late at night on Sept. 25, with no observers present, officials from the Ministry of Energy and Mineral Resources submitted to parliament their DIM that they acknowledged was not yet finished. He also noted that the energy minister wasn’t present during that late-night meeting, and that only eight legislators showed up.

“We know people who work at night are either thieves or robbers,” Hendrik said. “[Politicians] like to complain that our natural resources are being robbed, while they’re doing the same thing.

“It’s obvious that this is like a game,” he added. “When the president says [the deliberations should be] postponed, but then there’s a submission of the DIM, that means there’s [going to be] deliberations.”

Suralaya coal power plants. Image by Satari/Wikimedia.

‘Tomorrow it can be done’

Ego Syahrial, the secretary-general of the Ministry of Energy and Natural Resources and the official responsible for compiling and submitting the DIM, also questioned parliament’s insistence on proceeding with its deliberations on the back of that incomplete assessment.

“I said the list in the DIM is incomplete,” he told local media the day after the submission. “Please take a note that we’re submitting a DIM document that’s incomplete. And in accordance with an instruction by the president, we’re not [supposed to be] deliberating [the bill] now, only postponing it until the next [parliamentary] period.”

Ego said the government’s assessment, even though it was incomplete, listed 938 points of disagreement with the provisions in the bill as drafted by legislators. He said he had reminded the legislators of the president’s request and pointed out that the assessment contained an objection from the industry minister, who also had his own views on the draft.

The legislators, however, say the bill is fair game for passage now that the government has submitted the DIM, and that any criticism about the bill should not be targeted at parliament.

“Don’t say that parliament [is to blame],” Ridwan Hisjam, the deputy chairman of the parliamentary commission on energy policy, told local media. “Be angry at the government instead, at Jokowi. Why are [you] angry at us? Who submitted this [DIM] last night?”

With the DIM submitted, legislators have decided to press ahead with passing the bill immediately, before their term ends on Sept. 30.

“Do you want to have a legacy or not?” Ridwan told local media. “If you want to have a legacy, then we can just [pass the bill]. Tomorrow it can be done.”


Banner image: A container for coal after it has been unloaded from the barges. Image by Ayat S Karokaro / Mongabay-Indonesia.


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