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Critics see payback in Indonesia’s plan to grant mining permits to religious groups

Forest clearing for nickel mining on Wawonii Island.

Forest clearing for nickel mining on Wawonii Island. The government has plans to grant mining business permits to religious organizations. Image by Riza Salman/Mongabay Indonesia

  • Indonesia’s investment minister, Bahlil Lahadalia, has presented a government plan to give mining licenses to the country’s religious communities.
  • Civil society groups have responded to the proposal by highlighting the lack of relevant expertise, as well as legal clauses that would currently preclude such a policy shift.
  • The policy idea follows a move in 2022 to revoke operating permits over millions of hectares of land that were originally awarded to companies, but had sat undeveloped for years.

JAKARTA — Critics have slammed Indonesia’s outgoing government over a plan to hand out mining permits revoked from companies to religious organizations — not on the basis of the latter’s mining competence, but simply because they played an important role in the country’s independence struggle nearly 80 years ago.

The push is being led by the investment minister, Bahlil Lahadalia, who faces allegations of self-dealing and corruption in the revocation and reissuance of mining permits, according to reporting by investigative news outlet Tempo. The proposed handouts are more of the same, critics say: payback to religious organizations for their support of President Joko Widodo’s preferred candidate in February’s election.

“Who were the liberation figures of our nation?” Bahlil said at a press conference at his office in Jakarta on April 29. “Now that Indonesia is independent, should we not give them some attention?”

“It’s nonsense,” Muhammad Jamil, head of the legal desk at the National Mining Advocacy Network (Jatam), a watchdog group, told Mongabay Indonesia on May 1.

“There is no legal basis” for such a handout, Jamil added.

The condition of the Mantan River, after the coal mine.
The Mantan River in Indonesia’s Jambi province is allegedly contaminated with mining waste from nearby coal operations. Image by Teguh Suprayitno/Mongabay Indonesia

Questions remain over how the government can rearrange the country’s legal and regulatory framework to enable religious organizations, which are incorporated as charitable foundations, to hold mining permits, which may only be issued to commercial enterprises.

Civil society groups told Mongabay that land clawed back by the state from corporate control should be disbursed to Indigenous communities and local farming cooperatives.

“Why is the government suddenly presenting mining business ideas to mass organizations?” said Fanny Tri Jamboree Christanto, mining and energy lead at the Indonesian Forum for the Environment (Walhi), the country’s biggest green NGO.

“Every enterprise is formed specifically to do something,” he added. “Mass organizations are not formed for mining.”

He suggested the move was a way for the president, known as Jokowi, to pay back the organizations for their support of Prabowo Subianto, the defense minister who will take office as Indonesia’s next president in October. The new vice president will be Jokowi’s eldest son, Gibran Rakabuming Raka. Bahlil was a key member of the Prabowo-Gibran campaign, and prior to the election had called for Jokowi to be allowed a third term in office or an extension of his current term — in direct violation of the Constitution.

Jamil noted that the administration had first hinted at the plan last October, “to stir up the mass organizations ahead of the election.”

“Now that the election is over, it’s time to make good on the promise and pay them back,” he said.

This was echoed by Putra Adhiguna, director at Jakarta-based Energy Shift Institute, who told Singaporean daily The Straits Times that “Jokowi made a political promise, and now he is obliged to deliver on that promise.”

Residents of Dukuh Village, Watulimo District, protest
Residents of Dukuh village, an agricultural community in East Java province, protest against a planned gold mine in August 2023. Image by A. Asnawi/Mongabay Indonesia.

No mining competency required

Jamil said that mining “has the potential for extraordinary damage both socially and ecologically,” and that, as such, operating licenses should be allocated under strict regulatory oversight.

However, Bahlil said religious organizations’ own lack of experience or competence in mining shouldn’t be a sticking point.

“If someone says that religious organizations don’t have the specialization to manage this, then look for good partners,” he said. “You think companies that hold mining permits manage them on their own? They also need contractors.”

Among the groups that will reportedly benefit from the mining permit handouts are Nahdlatul Ulama, which is today the largest Islamic organization in Indonesia and claims close to 100 million followers, and Muhammadiyah, a smaller group claiming around 60 million followers.

Both groups already moonlight niche businesses like travel agencies for Islamic pilgrimages. Both also manage a wide network of their own religious schools and hospitals facilities, and represent vital political blocs that have provided support to the Jokowi administration.

The Straits Times has reported that Muhammadiyah and Nahdatul Ulama were briefed in private on the possibility that the government may allocate revoked mining permits to them.

Devolving land management

Since 2022, Widodo has established a task force led by Bahlil to review mining licenses and forest concessions, with a remit to devolve management of land to community organizations such as cooperatives.

On Jan. 6, 2022, Jokowi announced the government had revoked hundreds of corporate operating permits across the plantation and mining sectors. The landmark policy announcement affected more than 3 million hectares (7.4 million acres) of land previously zoned for development.

“We have to uphold the constitutional mandate that says the land, the water and the natural resources within them are controlled by the state, and to be used as much as possible for the people’s welfare,” Jokowi said at the time, citing the country’s constitution.

Analysis in 2022 by environmental NGO Auriga Nusantara indicated there were 2.4 million hectares (5.9 million acres) of standing forests within the area affected by the change.

The environment minister, Siti Nurbaya Bakar, said the government would devolve management over much of the relevant land to local communities under the country’s highly praised social forestry program, which aims to empower villages that have long lived in tandem with the forest.

“The overall ambition is to open up as much equitable access as possible to enhance the well-being of communities,” Siti said via Forest Hints, a website used to publish government messaging, while adding that some of the land would also go to “experienced and credible new investors.”

Banner image: Forest clearance for nickel mining on Indonesia’s Wawonii Island. Image by Riza Salman/Mongabay Indonesia.

This story was reported by Mongabay’s Indonesia team and first published here on our Indonesian site on May 3, 2024.

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