MAC: Mines and Communities

Indonesia update

Published by MAC on 2007-02-17

Indonesia update

17th February 2007

The Indonesian Mining Association is rejecting proposed changes to mining legislation in Indonesia that would see permits being used instead of the old Contract of Work model. Such a move would strengthen the position of the government, set more boundaries for mining companies and hopefully prevent some problems that have been faced by communities which have endured mining operations such as Buyat Bay, and those currently threatened by unwise developments such as Archipelago's Toka Tindung proposed gold mining in a region laden with ecological jewels.

Rio Tinto, to the condemnation of local and national organisations, is hoping to fast track a contract for a proposed nickel mining venture on the island of Sulawesi before such legal changes are made. In other mining news, smuggling of recently banned sea sand exports from Riau to Singapore has been reported.

Sand still smuggled to Singapore, police say

The Jakarta Post

16th February 2007

JAKARTA (Antara): Riau Islands Police chief Brig. Gen. Sutarman said Friday that illegal export of sand to Singapore from the province still continued although the government has issued a regulation to ban it.

"Yesterday (Thursday), when I just returned home from Johor, I saw it (the illegal shipping)," Sutarman was quoted by Antara news agency as saying.

He said he saw some 10 boats with Indonesian flags were on Singapore waters, carrying sand taken from Indonesia.

According to Sutarman, Indonesian security could do nothing to prevent the shippings after the boats were on Singapore' territory.

Commenting on Sutarman's statement, head of the Sea Security Coordinating Body Mid. Marshal Djoko Sumarsono said his body has tried to tighten petrol in border areas, but saying that the territory is to wide to cover.

Sand exports were banned under the Trade Minister Regulation No. 02/M-DAG/PER/1/2007 starting on Feb. 6.

North Sulawesi Governor opposes Toka Tindung gold project

JATAM, 14/02/07 - The North Sulawesi Provincial Government has opposed the operation of PT Meares Soputan Mining (MSM) Toka Tindung gold mine in North Minahasa regency fearing that the company's mining activities would damage the environment.

Speaking during a hearing with the House of Representative (DPR) last week, North Sulawesi Governor Sinyo Harry Sarundajang said that his office had formally sent a letter to the State Minister of Environment to convey the local government's decision to reject the Environmental Impact Assessment (AMDAL). With the rejection of the AMDAL documents, the company would not be able to continue its operation.

Sarundajang said that the AMDAL documents which had received approval from the Jakarta Environmental Authority were not adequate enough to protect the environment around the company's mining site which is located near the Likupang marine conservation area and the protected Tangkoko forest area.

"We are not against foreign investors but our local people need environmentally sound investments," the Governor told the hearing. Referring to the local government's study, he said that the company's mining waste disposable system had the potential to wipe out important species in the marine and forest conservation areas.

Sarundajang told the lawmakers who attended the hearing that there had been thorough analysis and discussion involved in reaching the decision. He asserted that the project would threaten the adjacent Tangkoko Nature Reserve, Likupang beach, and marine tourism spot known in the international diving community as the Marine Biodiversity Golden Triangle.

JATAM's research has revealed that the project poses high risks to the local water supply as it plans to consume more than a million litres of water each day for its gold processing. This water supply would also be used for silver processing, workers' drinking water, and waste management.

The other risks posed by the project include safety issues. The Toka Tindung project is located in a hilly area where thousands of people live downhill. The placement of a large tailing dam, open pit mine, and waste rock dumping in areas prone to volcanic and tectonic earthquakes will put the lives of the local people in danger. Just recently on January 23, 2007, the province was hit by an earthquake that registered 5.7 on the Richter scale. Last year in November, the nearby Mount Soputan erupted and poured vast amounts of lava and dust, and caused an earthquake. There have been 221 incidents of tailing dam failures caused by nature (earthquake, storm, heavy rain) and human error reported around the world.

The project had been put on hold but has recently started up again with it being taken switching owners from Aurora Gold in 2002 to Archipelago Resources. There has been staunch local opposition to the Toka Tindung project since early 2006 by thousands in the fishing and tourism sectors who fear that the mine will cause pollution that will jeopardize their livelihoods. The project is backed by four large international financial institutions; NM Rotchilds & Sons (UK), West LB (Germany), ANZ (Australia), and Societe Generale (France). These institutions are neglecting their commitments to several sustainable development principles that they have signed on to with regards to their project financing such as the Equator Principles and the UN Financial Institutions’ Statement on Sustainable Development.


Jatam Press Release

6th February 2007

Jakarta –The UK/Australian-based mining company, Rio Tinto, plans to continue its pursuit to mine in Lasamphala on the Indonesian island of Sulawesi. Rio Tinto is requesting a concession area of 70,000 hectares that covers area in the two provinces of central and southeast Sulawesi (1). Their plans to move ahead are undermining Indonesian law because the Indonesian House of Representatives are currently drafting a new mining bill to replace the 1967 Mining Act No 11. Rio Tinto is trying to fast track approval of their project and thereby intentionally trying to avoid any new legal obligations that they would be required to follow under the new mining legislation. The old contract model is very beneficial to mining companies but allows for numerous adverse impacts to local communities and the environment.

The old contract model has also triggered disputes between regional governments, the central government and the mining companies. The ‘contracts of work’, which were all signed between the mining companies and the central government meant that the regional governments did not have a fair say with regards to the developments in their communities. Problems brought about by the old contract model included low royalties for the region from the extraction of their mineral resources, poor employment opportunities for the local people, and mines left abandoned without clean up or restoration of the environment. The mining contract is long outdated and in need of revision.

The mining bill currently on the table will replace the old contract model with mining permits. Mining permits will strengthen the government’s position as a regulator and not just one party bounded by contract provisions. From the national point of interest, the permit model will benefit the country when problems arise that are caused by the company, and the government must take firm action to address the problem as a regulator. In the past, the Indonesian government has failed to take such firm action when required for fear the mining companies will sue the government for breaching their contract in international arbitration suits. Such suits were recently threatened by mining companies that held contracts over areas that were also designated protected forests.

"Rio Tinto and the Ministry of Energy and Mineral Resources are fishing in troubled waters. They want to catch a contract before mining permits are enacted into law. The Mining Advocacy Network (JATAM) strongly criticizes the plans of Rio Tinto to obtain a contract before the new legislation is passed. The Minister of Energy and Mineral Resources must not sign any such contracts that will only do more harm to local communities and the country”, said Siti Maemunah, JATAM’s national coordinator.

Sapri, a representative from a local NGO in Central Sulawesi stated: “All investments in the form of mining, energy, forest, and plantation that will cause our people to suffer or cause damage to our environment will be rejected in Central Sulawesi.” The South Sulawesi province have experienced the adverse impacts of the foreign-owned PT Inco nickel mining and processing venture for many decades. Locals complain that the company and the government forced them to abandon their lands and livelihoods, destroyed forest, and degraded the environments of Lakes Matano, Towuti and Mahalona.

Rio Tinto is a world-renowned multinational mining company with a bad reputation (3). Rio Tinto has closed one mine in Indonesia, in east Kalimantan. The PT Kelian Equatorial Mining (KEM) gold mining operation caused prolonged horizontal conflict within the community, violated numerous human rights, and degraded the local environment.

Media contact:
Adi Widyanto (JATAM), Tel: 081511655911, Email:

(1) Media Indonesia, 31 January 2007

Newmont Ups the Propaganda as Buyat Criminal Case Approaches a Verdict


23rd January 2007

Jakarta - PT Newmont Minahasa Raya (NMR) continues fooling the public with false statements and advertisements stating that the company is not guilty of polluting Buyat Bay. In the last three weeks, Newmont’s media propaganda has been intensified including the funding of picturesque scenes of Buyat Bay in three of Indonesia’s reputable national media. The propaganda has ostensibly been designed and launched in an effort to support the company’s defence against charges that it has polluted Buyat Bay.

The Denver, Colorado-based global gold mining giant is grasping at straws to try and convince the public and the judges but it is really an insult to common sense since it is undeniable that Newmont polluted Buyat Bay in the years that it disposed of its tailings waste including numerous incidences when the tailings pipe broke, spilling wastes into the surrounding environment.

Newmont’s propaganda is an apparent attempt to further support its former President Director Richard Ness who faces the criminal charges by creating doubt around the indictment. In the court hearings, Ness repeated statements that the company compiled with Indonesian environmental regulations and that they routinely reported environmental monitoring results to the government.

Furthermore, Newmont continues the dictum that they applied advanced detoxification technology to prevent pollution. But even with the application of detoxification processes, arsenic, mercury, silver, iron, manganese, and cyanide were found to exceed Indonesian environmental quality standards. Newmont’s own Environmental Management Plan (RKL) and Environmental Monitoring Plan (RPL) documents indicated 121 incidents where tailings passed through the detoxification process still exceeded environmental quality standards (1). It is obvious that Newmont violated Indonesia’s environmental regulations (2).

The false portrayals of what happened to Buyat Bay have hurt the people that once fished and played in its waters. Refusing to acknowledge the toll of suffering by the Buyat Bay will not make it go away. While those who lived along the coast in Buyat Bay have moved to a place nearby called Duminanga and forge a new life, hundreds of families remain in Buyat Village, a village 1 km from the coast, a place where people also suffer from numerous health conditions linked to exposure to heavy metals such as arsenic and mercury. The people of Buyat Village suffer a number of neurological, digestive and respiratory ailments including tumours, respiratory tract infections, and digestive tract infections. A medical check up carried out by Mer-C in July 2005 found 477 people in Buyat Village suffering such health conditions.

The relocated Buyat Bay community have condemned Newmont’s propaganda by sending letters of clarification to the national press. “We were not catching eight baskets of fish every day (as mentioned in one of the newspapers) as evident in how poor we had become living in Buyat Bay,” said Anwar Stirman, a former resident of Buyat Bay, in the letter to the media.

In response to the heightened Newmont propaganda, the national coordinator of the Mining Advocacy Network (JATAM) Siti Maemunah said: “The community had hoped that the media would treat them with a bit of respect and not publish inaccurate information. But Newmont has more power, money and sway with the media than the people of Buyat. It is a responsibility of the media to portray the situation of the Buyat people that includes a history of horizontal conflict fuelled by Newmont, and health concerns that need addressing.”

Torry Kuswardono, a spokesperson with Friends of the Earth Indonesia (WALHI) added: “ Once again, Newmont is successful in using press to mislead the public on actual conditions in Buyat. The beautiful pictures that Newmont has displayed in a number of newspapers contradict with the experiences of the people who lived there, a place where almost 500 health conditions are found. Sixty six families had to relocate because they were no longer able to survive along the coast of Buyat.” (3).

Contacts :
Torry Kuswardono, Indonesian Forum for Environment (WALHI), cell. 0811 383 270
Adi Widyanto, Mining Advocacy Network (JATAM), cell. 0815 116 55911

Note to Editors:

1. One of the findings by Integrated Team for Buyat Bay Pollution case concerning waste management technology states that: The iron and copper metal substances contained in the detoxified sample still exceed the quality standard based on the Minister of Environment’s Decree No. B-1456/BAPEDAL/07/2000. Arsenic and cyanide concentrations were also noted as high. This corresponds with several Newmont’s RKL and RPL documents where the concentrations of those metals were noted as exceeding official environmental quality standards even after detoxification.
2. Environmental quality standards are found in the Decree of Minister of Environment No.51/MENLH/10/1995 (Enclosure C). The tailings standards are based on the Letter of Minister of Environment No. B-1456/ Bapedal/07/2000.
3. WALHI’s report on the Environmental and Health Condition of Buyat community (2006); MER-C’s presentation to the House of Representative, Commission IX (2006).


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