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U.N., rights groups flag potential violations in $3b Indonesian tourism project

A village in the middle of a racetrack in Mandalika, Lombok, that earlier this year hosted the first MotoGP series bike race in Indonesia. Image by Fathul Rahkman/Mongabay Indonesia.

  • The U.N. special rapporteur on extreme poverty and human rights has again raised concerns about alleged violations against local and Indigenous communities who are being moved for a tourism development project in Indonesia.
  • The Indonesian government envisions building a “New Bali” in the Mandalika region of the island of Lombok, including resorts, hotels and a racetrack, for which it is relocating 121 households.
  • Special rapporteur Olivier De Schutter says there are concerns around four issues: the conditions under which the community members are being moved; whether they’ve even consented to doing so; the amount of compensation the government is offering; and the conditions of their resettlement.
  • NGOs have called for the $3 billion Mandalika project’s main funder, the Asian Infrastructure Investment Bank (AIIB), to stop financing the project in light of these allegations of rights violations.

JAKARTA — The United Nations has reiterated its concerns over allegations of human rights violations in a mega infrastructure tourism development project on the Indonesian island of Lombok. In light of this, various environmental and human rights organizations have called on the Asian Infrastructure Investment Bank (AIIB) to stop financing the project.

The $3 billion project is located in the Mandalika coastal region in southern Lombok, an island next to the better-known tourism hotspot of Bali. The project aims to turn Mandalika into what the government calls a “New Bali” with the construction of parks, resorts, hotels, and a racetrack that earlier this year hosted the first MotoGP series bike race in Indonesia.

The government and project proponents, including its main funder, the AIIB, say the project will promote the development of ecotourism in Mandalika and contribute to poverty alleviation on the island.

U.N. rights experts, however, last year highlighted the project’s impact, citing instances of local communities being evicted, and houses, fields, water sources, cultural and religious sites being destroyed to make way for the project.

Since then, the government and others have responded to the concerns, saying that they had conducted a verification and settlement process to resolve land disputes. They say these settlement efforts were conducted in a transparent manner and were made under the voluntary and genuine approval of the affected communities.

The government said the local communities affected by the project have been properly compensated and that the land settlement process has been resolved. In particular, the government said the Sasak Indigenous communities who lived in the project area have thrown their full support behind the development.

But in a letter dated March 8, Olivier De Schutter, the U.N. special rapporteur on extreme poverty and human rights, said there are still lingering concerns, following a careful review of the government’s response and replies from the other concerned parties.

The concerns center on four issues: the conditions under which the alleged forced evictions took place; the consent of the affected households and communities; the compensation for the loss of land, properties and livelihoods; and the conditions of resettlement.

De Schutter said he had received sufficiently reliable information that some displaced families hadn’t been properly compensated, or received any compensation at all, and that the Sasak Indigenous communities hadn’t given their free, prior and informed consent on the project.

“I believe that resolving those issues is a prerequisite for the success of the Mandalika project in the long run and ensuring that the project genuinely benefits the Sasak indigenous peoples and communities in the Mandalika,” he wrote in the letter, which was made public on May 11.

The U.N.’s repeated raising of concerns should be reason enough for the project’s developers, including the AIIB as its main investor, to stop funding the project, according to Indonesian and international NGOs grouped under the Coalition for Monitoring Indonesia’s Infrastructure Development.

The coalition said stopping the funding is necessary so that conflict resolution can be carried out immediately and the basic rights of the affected communities can be upheld.

“On behalf of project-affected Indigenous peoples, fishermen, women and children in the Mandalika tourism project area, we are demanding that AIIB must immediately stop lending to the Indonesian government and ITDC [Indonesia Tourism Development Corporation] and account for the human rights impacts,” said Mohammad al Amien, coordinator of the NGO coalition.

A farmer plows land next to a racetrack in Mandalika, Lombok, that earlier this year hosted the first MotoGP series bike race in Indonesia. Image by Fathul Rahkman/Mongabay Indonesia.

Land acquisition woes

De Schutter’s letter said it’s unclear whether all the affected peoples and communities have been afforded full procedural protections and effective remedies in this case.

“In the present case, there appear to be varying understandings among different stakeholders as to what procedural protections should have been applied to families and individuals who owned, occupied or used land required for the Mandalika project,” De Schutter wrote.

The government and project supporters said the land acquisition process had been carried out in accordance with a 2012 law on land acquisition and with full respect for the rights of the affected communities.

“The government and the ITDC would like to reiterate that the development of the Mandalika Special Economic Zone [SEZ] had never resorted to any land grabbing nor forced eviction as alleged by the Special Procedures,” the government said in its response letter dated May 4.

However, the land acquisition processes under the 2012 law don’t provide the same level of procedural protections as international human rights law, De Schutter wrote. They don’t even meet the AIIB’s environmental and social safeguard requirements, according to Harry Sandy Ame, a researcher with Walhi, Indonesia’s biggest environmental organization and a member of the NGO coalition.

De Schutter wrote it’s also not clear how many households have been affected by land acquisitions and evictions, something that he described as “troubling.”

A government census in March 2021 found 190 families were affected by the project and had to be relocated. But 100 or more families reportedly continue to live in the Mandalika project area, which is fenced off to prevent public access, and face imminent risks of forced eviction, De Schutter wrote.

The government denies this, saying all the families living around the street circuit area have been relocated, and that public access remains widely open through connecting tunnels that also double as attractions for the public.

Children in a village in Mandalika, Lombok, where a mega infrastructure tourism development project aims to turn Mandalika into what the government calls a “New Bali” with the construction of parks, resorts, hotels, and a racetrack. Image by Fathul Rahkman/Mongabay Indonesia.

Lack of FPIC

The second concern raised in De Schutter’s letter is that the project developer appears to not have obtained the free, prior and informed consent of the affected communities to land acquisition before the project began.

Consultations about the project’s design, impact, and mitigation and monitoring measures done by the government and the AIIB seemed to have largely targeted local village chiefs, government officials and the broader public, De Schutter wrote.

“It reveals very little evidence that affected landowners and users were meaningfully consulted and that their free and informed consent was sought and obtained prior to land acquisition,” he wrote.

The government said the Sasak Indigenous community had been properly consulted through the representation of the Sasak tribe customary council.

“[T]he Sasak tribe customary council has affirmed that the process of development and land acquisition related to the Mandalika SEZ is carried out humanely and persuasively, with respect to the law,” the government said.

According to the government, the Sasak tribe customary council has also confirmed there’s been no land grabs or forced evictions or relocations. The government said the customary council has represented the whole Sasak Indigenous community for many years, which is why the government consulted directly with them.

De Schutter, however, said that for the government to obtain the FPIC of the community, the affected peoples should have been given the opportunity to determine by themselves the procedures and institutions involved in the discussion.

“In the consent process, Indigenous peoples should specify which representative institutions are entitled to express consent on their behalf,” he said. “However, I have not received or found information confirming that the affected Sasak indigenous peoples in the Mandalika have explicitly identified the Sasak Tribe Customary Council as such a representative institution.”

De Schutter also highlighted the involvement of the police and the military in the project as worrying. Security personnel have been appointed to a recently established task force to resolve land disputes in the project area. This, De Schutter wrote, amplifies the landowners’ and users’ fear of intimidation against them.

“This runs counter to the requirement under international human rights law that the prior and informed consent should be sought under conditions free of coercion, intimidation or manipulation,” he said.

The government said the presence of security forces in the project area is “solely to protect and secure the project site,” given its status as a national strategic region. It also said the police and military presence there was only as a preventive measure, not a repressive one.

Amien, from the NGO coalition, however, alleged that the land acquisition task force employs tactics of intimidation against the affected people. The security forces have also restricted the movement of the affected people, setting up checkpoints at the entry to the fenced-off residential area, the NGO coalition said.

The presence of the police and military in the project area means the claims by the government and the AIIB that they’re not directly responsible for human rights violations and land conflicts in the area isn’t true, said Harry from Walhi. He said the “affected peoples have witnessed and experienced violent intimidation since the beginning of the project.”

The coalition called for the military and police not to be involved in infrastructure development projects, much less be part of conflict-resolution efforts. It said the military may only be involved when the country is in a state of emergency, and hence its role and that of the police in the Mandalika project should be stopped.

“The AIIB must also immediately require its clients, the ITDC and the government of Indonesia, to disband the land acquisition task force composed largely of the military and police forces in Mandalika which employs tactics of intimidation and movement restriction on the affected people,” Amien said.

Locals forced to break a fence at a racetrack in Mandalika, Lombok, that earlier this year hosted the first MotoGP series bike race in Indonesia, as they don’t have access to get out of their village. Image by Dedi/Mongabay Indonesia.

Inadequate compensation

De Schutter’s letter also questioned the adequacy of the compensation paid to affected residents.

The government said it had properly compensated affected households, both those with proof of legal landownership and those without. It said it had determined the amount of compensation fairly in accordance with the law.

The amount is 10 million rupiah ($680) per household for 121 families who occupied the land. This money is meant to be used to purchase land at a permanent resettlement location in the village of Ngolang. In the meantime, the residents been provided with temporary housing, the government said.

In addition, 96 individuals who used and cultivated the land also received one-off compensation of 4.5 million rupiah per square meter of that land, or about $29 per square foot.

While the government describes these amounts as proper and proportional, De Schutter wrote, they appeared to be “inadequate and disproportionate to damage that the affected residents have suffered.”

He also noted that some households still haven’t received their compensation. Out of the 121 families entitled to the 10 million rupiah, 54 haven’t been compensated yet and have thus refused to relocate.

The government said the 54 families are in the process of being paid, but there’s been a delay with six of them because four have rejected the payment and two have moved from their address.

Among the people reportedly affected by the project are fisherfolk in the Batu Kotak Bay area, located in the Mandalika special economic zone, De Schutter said in his letter. He said the fisherfolk had been making their living from fishing and seaweed cultivation over the course of several years.

“Their access to the shore has been reportedly restricted due to the Mandalika project and hence they have effectively lost their livelihoods,” De Schutter wrote. “According to the information received, however, they have not been given compensation or provided with any support to compensate for their loss of livelihood.”

He added that these fisherfolk would have to vacate their area due to further development there, but that since they had no formal landownership, they would only be offered 3 million rupiah ($205) for the loss of each house and compensation for 0.1 hectares (quarter acre) of land.

The government has denied they are in the area affected by the project. “[T]he fisherfolks are only found in the Gerupuk and Kuta area, which have no activity in the Mandalika SEZ area,” the government said.

Local houses in a village in Mandalika, Lombok, where a mega infrastructure tourism development project aims to turn Mandalika into what the government calls a “New Bali” with the construction of parks, resorts, hotels, and a racetrack. Image by Fathul Rahkman/Mongabay Indonesia.


The final concern De Schutter raised in his letter is about the conditions of resettlement.

The government plans to relocate affected households to Ngolang village, where the houses and other facilities are still under construction. It said construction should be finished by the middle of 2022, and that the communities should be able to move in by the end of 2022.

The village is designed as a tourist village, located on a hill with a scenic view of the beach and the ocean. The government said tourism will provide an alternative or substitute livelihood for the community members.

But there are several problems with the relocation plan, De Schutter wrote. Chief among them is the indication that the affected communities weren’t informed or consulted about the plan.

“I have not been presented with evidence confirming that the affected peoples were consulted in advance and participated in developing relocation plans,” he wrote.

And some residents have refused to move to the temporary relocation site, as they object to the land acquisition process and want to remain on their land, he added.

The NGO coalition said there’s currently a high degree of homelessness as a result of involuntary resettlement.

Another problem with the plan is the geographical location of Ngolang, which is 2 kilometers (1.2 miles) from Mandalika and on a hilltop without direct access to the sea. This, De Schutter wrote, is likely to profoundly change the affected people’s lives and livelihoods.

“The relocation plans seem to pay little regard to how the affected peoples may be able to continue accessing the sea, which is an integral element of their traditional way of life and an important source of livelihood,” he said.

The government said it supports the traditional livelihood of the affected communities, but made no mention in its response letter of how it plans to continue supporting it in Ngolang. Instead, the government only mentioned its support for traditional livelihood in the temporary resettlement area, not Ngolang, by allowing the affected communities to carry out cattle farming and other forms of livelihood on uncultivated land.

There’s also no mention in the government’s response about the involvement of the affected communities in the relocation plan.

“It is critical that the affected peoples are informed, consulted, and enabled to participate in decision-making about relocation plans, so that relocation sites are appropriate and comply with human rights standards,” De Schutter wrote.

A racetrack in Mandalika, Lombok, that earlier this year hosted the first MotoGP series bike race in Indonesia. The race track is a part of a mega infrastructure tourism development project aims to turn Mandalika into what the government calls a “New Bali” with the construction of parks, resorts and hotels. Image courtesy of the Indonesian Ministry of Finance.


Due to the allegations of human rights violations and abuses, De Schutter issued several recommendations

For one, the government and the AIIB should appoint an independent mediator, one who is not affiliated with or engaged by any of the concerned parties.

“Such an independent mediator could be empowered to facilitate mediation among different parties, with a view to reconciling conflicting claims and finding mutually agreeable solutions,” De Schutter wrote.

He also called on the government to invite him for an informal visit to the project area.

“Such a visit would provide me with invaluable opportunities to directly hear from all relevant stakeholders, come to an assessment of the situation, and offer concrete recommendations,” De Schutter wrote.

The NGO coalition, meanwhile, said there are other things that the AIIB, as the project’s main funder, can do besides stopping its funding. Pieter Jansen from Both ENDS, a Dutch organization that works on monitoring multilateral development banks, including the AIIB, said AIIB shareholders should push its client, the Indonesian government, to act promptly and address the human rights violations in the Mandalika case.

This action must sufficiently mitigate and remedy the harms caused, Jansen said.

Amien, the NGO coalition coordinator, said the AIIB should also disclose the land audit that the bank used as the basis for greenlighting the project, as well as other documents like the monitoring results and management plans on the use of security personnel.

“We also request that AIIB President Jin Liqun, who gave us his personal commitment at AIIB annual meetings since 2019 and again in 2021, to ensure that AIIB would remedy the social impacts by immediately implementing the U.N.’s recommendations, in order to stop the crippling impoverishment of project-affected communities as a result of the Mandalika project,” he said.

Wawa Wang of Just Finance International, a member of the coalition, said the AIIB must also commit to an independent evaluation by human rights experts chosen in consultation with and agreed by NGOs and people affected by the Mandalika project.

“By providing core finance for the project, AIIB must take responsibility for its complicity in bankrolling the Mandalika project, where its client and project proponents have been implicated in inflicting human rights violations and fueling land conflicts,” she said.


Banner image: A village in the middle of a racetrack in Mandalika, Lombok, that earlier this year hosted the first MotoGP series bike race in Indonesia. Image by Fathul Rahkman/Mongabay Indonesia. 


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