MAC: Mines and Communities

Indonesia: World Bank aid to nickel mine threatens biodiversity

Published by MAC on 2010-07-17
Source: Statements (2010-07-14)

MIGA (Multilateral Investment Guarantee Agency), the arm of the World Bank that gives a guarantee / warranty of investment to private sector projects, is to provide an 'aid' guarantee of U.S. $ 207 million to PT Weda Bay Nickel, which will open a new nickel mine on the Indonesian island of Halmahera .

The project is Categorized 'A', and will certainly lead to many environmental and social problems.

For earlier article, see:

http://www.minesandcommunities.org/article.php?a=9963

World Bank approves destructive mining project in Indonesia

International coalition condemns MIGA support for Weda Bay Nickel mine

Coalition against PT Weda Bay Nickel Mine and MIGA Joint Press Release

14 July 2010

Jakarta and Washington, D.C.  - An international civil society coalition today condemned the World Bank for approving support for a destructive nickel mine that would displace Indigenous Peoples, destroy vast areas of intact tropical forest, and threaten rivers and the ocean with sediment and toxic chemicals. The Board of Directors of the World Bank Group yesterday approved a guarantee by the Bank's Multilateral Investment Guarantee Agency (MIGA) for the Weda Bay Nickel mine. Of the 23 Executive Directors of the World Bank, only the US Director abstained from the vote. Indonesian-based WALHI and DC-based EARTHWORKS and Bank Information Center joined JATAM, KIARA, KAU and other Indonesian groups today in declaring that the approval of a $207 million guarantee application for a risky and damaging nickel and cobalt mine demonstrates the fundamental flaws of the World Bank's procedures, policies, and practices on extractive industry.

"MIGA may rejoice in their offices in DC at having this new project headed out the door, but for us the approval means the MIGA management and the Board support the destruction of intact tropical forest on Indigenous Peoples' land, and use of use taxpayers' money to fund environmental and human destruction by mining companies," stated Berry Nahdian Forqan, National Executive Director of WALHI.

The World Bank's Directors approved the guarantee in spite of opposition by community groups in Indonesia, in spite of the major impacts of the project, and in spite of flaws in project assessment documents. A review by independent hydrogeologist Dr. Robert Moran released on July 12 noted that the mine would have severe consequences on communities and the environment and that the project assessments and plans violated the World Bank's own environmental and social policies. The report reinforced the concerns of Indonesian groups that the mine project would destroy a massive area of protected forest and lands of the Forest Tobelo Indigenous People, and would threaten the livelihoods of local communities.

"MIGA has succeeded in its role as spokeperson of the company client", said Riza Damanik, Secretary General of KIARA, an Indonesian fisherfolk network. "Rather than ensuring due diligence, MIGA has acted in defense of the PT Weda Bay company, deceiving the Board with optimistic promises and predictions based on the flawed and inaccurate technical data supplied by the client, telling the World Bank Board that it has done the appropriate due diligence, and portraying civil society as misinformed", maintained Damanik.

"MIGA is willing to compromise its own standards, downplay independent but informed reviews, and pretend that the investment makes negligible impacts based on the poorly developed safeguard documents and sanitized environmental impact summaries", asserted Hendrik Siregar of Indonesian Mining Advocacy Network JATAM.

Mining companies ERAMET, Mitsubishi, and PT Antam have proposed the Weda Bay Nickel mine on Halmahera in Indonesia. Most of the area scheduled to become roads and nickel mine pits is Protection Forest that was previously proposed to be part of a National Park and is in the proposed buffer zone of the Aketajawe-Lolobata National Park. The forests are habitat for protected and endangered species like the Chattering Lory and a Hopea tree species. The mine would segment the lands and threaten the livelihoods of the Forest Tobelo and other communities in the area. The project, located in a seismically active area with torrential rainfall, would also dump effluent water from its mineral processing into the ocean in relatively shallow water not far from coral reefs.

"It is unacceptable for the World Bank and MIGA to continue to support mining projects with such potential for devastating impacts on Indigenous Peoples and sensitive tropical environments," said Scott Cardiff of EARTHWORKS.

Dr. Moran's report and a separate biodiversity report are available at www.earthworksaction.org or www.bicusa.org and more information about the project at www.walhi.or.id.


MIGA Threatens Biodiversity Halmahera Island

Coalition against PT Weda Bay Nickel Mine and MIGA Joint Press Release

8 July 2010

Jakarta - Year 2010 declared by the United Nations (UN) as the International Year of Biodiversity (International Year of Biodiversity or IYB), with the theme "Biodiversity is Life, Biodiversity Is Our Life."

A major report, Millennium Ecosystem Assessment (March 2005) also highlighted the huge losses from the loss of biodiversity on earth, with 10-30% of mammals, birds, and amphibians threatened with extinction, due to human actions, including mining activities. International Union for Conservation of Nature (IUCN) in a video recorded the number of species threatened with extinction, namely:

1. 75% of the genetic diversity of agricultural plants has been lost.
2. 75% of the world experienced over exploitation of fisheries.
3. Up to 70% of the world's species threatened with extinction if global temperatures rise more than 3.5 ° C.
4. Third of the coral reefs around the world threatened with extinction.
5. Every second plot of rainforest the size of a football field disappears.
6. More than 350 million people suffer severe water scarcity.

Indonesia is one of 17 sites in the world's greatest biodiversity. Halmahera Island, located in the middle zone of wallacea where the developing proliferate endemic species, such as white cockatoos, drummer rail, somber Kingfisher, Dusky friarbird, and parrots (chattering lory). This bird is classified as an endangered species and contained in a list of the International Union for Conservation of Nature (IUCN) in 2007.

For these types of amphibians, there are nine species in Halmahera classified susceptible. Also identified, at least 17 plant species found in the location of contract mining work in Halmahera in the status of vulnerable and threatened.

The threat of destruction of biodiversity Halmahera Island was true when the World Bank through the MIGA (Multilateral Investment Guarantee Agency) is planning to support the Weda Bay Nickel mining project in Halmahera Island, North Maluku. Inevitably, this mining project will affect very negative impact on biodiversity.

Number of mining permits contributes greatly to the destruction of biodiversity in Indonesia, both at sea and ashore. In fact, biodiversity has an important role for human life as a source of supply of foodstuffs, clothing, shelter, medicine and also functions as a provider of water resources, clean air and for the sake of tourism. Moreover, biodiversity is also producing a source of foreign exchange to finance the state.

Indonesia was blessed with very high biodiversity with has about 90 types of ecosystem, 40,000 species of plants, animals and 300,000 species.

Finally, the message "Biodiversity, the Future of Our Earth" is used as the theme for World Environment Day 2010 and would not mean anything if it permits the mining of. Weda Bay Nickel threatening biodiversity on Halmahera Island was discontinued.

For more detail information, please contact:
Abdul Halim, Program Coordinator of KIARA: +62 815 53100 259
Pius Ginting, Mining and Energy Campaigner of WALHI: 0819 329 25700
Hendrik Siregar, Jatam: +62 852 6913 5520
Yuyun Harmono, KAU: +62 818 0786 7506
Surya, IESR: +62 21 7992945


Support for MIGA's Project Cancellation in Halmahera

Board of Directors
The World Bank
1818 H Street, NW
Washington, DC 20433 USA

12 July 2010

Dear Mr. Ian H. Solomon, Dr. Michael Hofmann, Mr. Toru Shikibu, Ms. Susanna Moorehead, Mr. Samy Watson, Mr. Ambroise Fayolle, Mr. James Hagan, Mr. Konstantin Huber, Mr. Sun Vithespongse, Ms. Anna Brandt and Mr. Giovanni Majnoni:

We are writing to express our deep and informed concerns over a proposed guarantee for a mining project in Indonesia that threatens communities and important ecosystems. The World Bank Group Board of Directors is scheduled to deliberate on a $207 million guarantee application to MIGA from PT Weda Bay Nickel (PT WBN), which would be used to support the exploration and pre-construction phases of the proposed nickel and cobalt mine and hydrometallurgical processing plant on Halmahera Island, North Maluku Province, eastern Indonesia. The Board is scheduled to consider the guarantee on July 13, 2010. We urge the Board not to approve the guarantee application given the major social, environmental and political risks, as well as the fundamental procedural and technical flaws with the PT WBN project.

Attached, please find the civil society concerns with the project. Additionally, a preliminary independent evaluation of the project done by a mining expert is included, which highlights our fundamental concern with MIGA's technical ability to properly asses the environmental and social impacts and mitigate the risks of this extractive investment.

We are deeply critical of this guarantee application to MIGA because, if approved, it would create a serious threat to both the people and the ecosystems of the island of Halmahera. The mine is likely to adversely affect indigenous peoples and the forests they live in on Halmahera and is likely to devastate sustainable livelihoods in the area. The project would destroy a large area of Protection Forest in a tropical biodiversity hotspot region next to a National Park. Sediment, large quantities of sulfuric acid, and mine waste would threaten massive contamination of streams, rivers, and the ocean in Weda Bay. Such impacts are likely to occur in the exploration, feasibility, construction, operation, and closure phases of the mine. The assessment procedures and plans for the mine also violate the Performance Standards as indicated in the attached information document.

The companies involved in the project are cause for concern as well. PT WBN was one of the lobbyists seeking an amendment of forestry Regulation No. 41 in 1999 that prohibited surface mining in protected forests. In addition to majority owners Eramet France and Mitsubishi, the controversial PT Antam owns 10% of the project. PT Antam's involvement in a comparable nickel mine until 2004 on the island of Gebe, in Central Halmahera, created incredible environmental damage and had devastating economic impacts for the local people, who mostly worked as farmers and fishermen.

Given the problems with the assessments and plans for the project, the potential severe environmental, social and political risks associated with the project, the Compliance Advisor Ombudsman complaint recently filed in Indonesia (attached), and the apparent failure of the project to abide by the Performance Standards, we urge the Board not to approve the guarantee application. Under the circumstances, we advocate an end to the feasibility assessment and cancellation of plans to provide political risk insurance for this dangerous project.
Sincerely,
...

Scott Cardiff
International Campaign Coordinator
EARTHWORKS

Muhammad Teguh Surya
Kepala Departemen Kampanye Eksekutif Nasional Walhi
Jl. Tegal Parang Utara No.14 Jakarta 12790
Telp/ fax : +62 21 79193363/ +62 21 7941673 Email : teguhriau@walhi.or.I'd

M. Riza Damanik
Secretary General, KIARA
Jl. Tegal Parang Utara No. 43 Mampang, Jakarta 12790
Telp./Faks. +62(0)21 797 0482

Andrie S. Wijaya
Koordinator Nasional, JATAM
Jl Mampang Prapatan II No. 30 RT 04/07 - Jakarta Selatan 12790
Telp. 021-79181683, Fax 021-7941559

Dani Setiawan
Ketua, Koalisi Anti Utang (KAU)
Jl. Tegal Parang Utara No.14 Jakarta 12790
Telp/ fax : +62 21 79193363/ +62 21 7941673

Norman Jiwan,
Head, Department for Social and Environmental Risk Mitigation Initiatives, Sawit Watch
Jl. Sempur Kaler No. 28 Bogor, Phone: +62-251-8352171, Fax: +62-251-8352047
www.sawitwatch.or.id

Rivani Noor
Director, CAPPA, Indonesia

Attachments:
1. Indonesia groups' official complaint letter to Compliance Advisor Ombudsman (CAO) on July 2
2. CAO's acknowledgement of the complaint letter
3. Summary and full review of PT WBN's Environmental and Social Impact Assessment from the independent mining expert

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