Indonesian ordered banks to stop lending to coal-mining projectsPublished by MAC on 2016-02-25
Source: Statement, ANTARA News (2016-02-24)
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Indonesian banks ordered to stop all lending to coal-mining projects in East Kalimantan
New Greenpeace Briefing details regulatory crackdown
24 February 2014
The Indonesian mining industry was dealt a double blow last week, a new Indonesian Coal Market Briefing from Greenpeace details.
On Monday 15 February Indonesia's Corruption Eradication Commission announced that local authorities revoked 721 mining permits in 12 provinces – 478 of which are coal-mining permits. Two days later, the Financial Services Authority (OJK) ordered Indonesian banks to stop all lending to coal-mining projects in East Kalimantan, where 28 per cent of Indonesia’s coal reserves are located.
The order for banks to stop giving credit to coal mines in East Kalimantan was announced at the OJK’s annual meeting. The banks, including the Regional Development Bank of East Kalimantan, were clearly told that they must not simply reduce loans, but stop lending completely as world coal prices had fallen so low that the credit risk had become unacceptable.
The briefing is available for download here
For more information contact:
Marina Lou, Legal Advisor, Greenpeace International
Greenpeace calls on banks to stop credit for coal mining
19 February 2016
Jakarta - Greenpeace Indonesia asks all banks in Indonesia to comply with call by the Financial Service Authority (OJK) to stop new credits for coal mining projects.
All banks in Indonesia should stop financing coal mining after the OJK issued the order, Senior campaigner of Greenpeace Indonesia Arif Fiyanto said here on Thursday.
Arif said stoppage of credit for coal mining would be a big blow to coal mining companies, but thousands of people in East Kalimantan would be saved from losing their livelihood.
Thousands of people in East Kalimantan already suffered badly with the extensive damage to the environment by coal mining industry, he said.
"We are like gambling and putting the future of the people at stake while in fact there is no more prospect of business in coal mining," he said.
The decision of the OJK also indicates that investing in coal mining is risky, therefore, all banks should comply with the order, he added.
Arif quoted reliable data as saying the liability of coal mining industry rose 30 percent while income increased only 10 percent and profit had been on the decline since 2008.
Indonesia is the largest coal exporter in the world, and the countrys largest coal producer Bumi Resources has been struggling hard to lift itself from the brink of bankruptcy,he pointed out.
East Kalimantan holds the largest or 28 percent of the countrys total coal reserves.
Coal mining industry has caused extensive damage to the environment including the countrys tropical forests, Arif said.