MAC: Mines and Communities

Part 3 A future without much future: Bahomotefe, One Putih Jaya, Soroako

Published by MAC on 2001-05-01

Part 3 A future without much future: Bahomotefe, One Putih Jaya, Soroako

Pull a favourite tropical postcard out of your imagination. It'll have waving palms, golden beaches, coral reefs and rolling, azure-covered hills. Not a bad representation of the east coast of Central Sulawesi, along the Tolo Bay. True, when you approach the particular territory of Bahomotefe (Ba - homma - teffi), the trees get patchy in places, heavy rocks have been dumped in one part of the ocean to make a rough and ready port, and there's a two-lane dirt track, driven through the forest with precious little regard for what grew in its way. It seems like Bahomotefe is at something of a crossroads - and it is. For this is part of PT INCO's quarter-million hectare contract of work (concession) which it started mapping in 1966 during its evaluation of the huge lateritic nickel potential of this part of Indonesia. Although PT Inco - subsidiary of Canada's "Big Nickel" company, Inco - eventually chose Soroako as the site for medium-term operations, Bahomotefe was always considered ripe for future exploitation.

In 1996, Inco concluded a new contract with the regime of President Soeharto, committing the company to further investment of C$1.5 billion, in order to expand the Larona hydro scheme, and increase nickel output by 50%. Although much of this will derive from Soroako, the contract extends Inco's sway over central and southern Sulawesi until 2025 (1). At current production rates, Bahomotefe (along with another major deposit at Pomalaa, to the south of Soroako) could be under the bulldozers within a few years.

Last March I spent three days in Bahomotefe and the surrounding country. I was the guest of an active community leader who, for many years, has been a crucial intermediary between his people, the Bungku, and the government and PT Inco. Equally important, he is widely respected by around 3,000 people who, in 1992, were evicted from their homes in Bali, Java and Nusa Tenggara, under ex-President Soeharto's notorious "transmigration" programme, and relocated in a settlement called One Putih Jaya (Onni Putee Jaya) a few kilometres from Bahomotefe village.

The Indigenous Bungku have long had their own adat (or land claims) system. It qualifies anyone clearing the forest for cultivation to assume ownership; those who plant trees on abandoned plots also gain title to the land (2). Bahomotefe residents cultivate rice, coconuts, and cashews, but also gather forest products (such as rattan) and haul in appreciable catches of fish. There is no doubt in my mind that they are strongly opposed to being thrown off their land and have little stomach for employment as mine labourers, even if Inco were to offer jobs. (A Jakarta newspaper in 1998 reported that the company would reserve 400 posts for local people: no-one I spoke with in Bahomotefe had even heard of the "offer").

During 20 years as a researcher into mining impacts, I have visited a number of communities around the world which have had to face up to the bullying and blandishments of "natural resource" companies. Some that I meet have little previous experience of the disruption and dislocation the industry brings in its wake. However, the Bungku at Bahomotefe know full well what may be in store for them, and have already reacted against it. Last year they compelled Inco to set up its exploration office outside the village, after consultations in Jakarta with Indonesia's National Human Rights Commission. The Bungku live only 80 kilometres from Soroako (as the crow flies - or more accurately, as the foot walks and the catamaran sails) and they have first hand experience of the devastation caused there. They have also had to swallow a hefty, thirty year, dose of the corporation's practices upon their own territory. Some 50,000 tonnes of ore has been ripped from "test pits" - a euphemism for excavations, the size of a motel, now fringed with twisted trees and trampled vegetation.

The unsuspecting traveller comes suddenly upon open bore-holes, 4 metres square, plunging to depths of 30 metres. I would have fallen down one of these, had my friends not forewarned me - it was located in the middle of an area where locals are trying to grow jambomente nuts. Last year, in response to community complaints, Inco said it would fill in the pits and fence off these holes - and that is the last the people have heard of it. But, even if Inco fulfils its promise, the local people still have to contend with logging companies (including Barito Pacific), which took advantage of Inco's exploration road, to plunder in its tracks.

For their part, the transmigrants seem more ambivalent about staying in the Bahomotefe region and fighting PT Inco. Six years back, they were allocated a miserly 1,000 hectares of land (just over 2 hectares for each of their 450 families) in order to grow rice - and they have every right to expect better. On the other hand, the land at One Putih Jaya is fairly fertile and - judging by the profusion of flowers planted around carefully kept lawns - many transmigrants now clearly identify the settlement as home. At a meeting of forty villagers, called for my benefit, I asked if there were circumstances under which they would voluntarily move. "Yes" replied one elder, "but we've laid down two conditions. Each of our families must receive 40 million rupiahs in compensation. And we must be guaranteed adequate cultivable land for the future". In 1997, the provincial government of Central Sulawesi told the transmigrants that Inco would give two billion rupiahs for their relocation - a fraction of the eighteen billion which the villagers are now demanding (3).


The community's eminently reasonable demand for adequate land poses greater problems. Last October, five representatives of One Putih Jaya, along with a Bahomotefe leader, had met the governor, who assured them that a new resettlement area at Soembawalati, 100 kilometres to the north, would suit their purposes admirably. (He also announced that he was holding the transmigrants' land certificates, but he wouldn't surrender them, since "you don't really need them!")

Unfortunately for the Governor's credibility, some of the delegates had already checked out Soembawali. I did so too, discovering - as they did - that it is principally a wide stretch of barren plains and commercial palm oil plantations. The only tract suitable for paddy rice is currently a vast swamp. An engineer on-site at the time informed me that this might be drained, but only if the nearby lake was also emptied. And that would put paid to fresh water supplies for the nearby district town of Tomata. The newly "constructed" camp, in which One Putih Jaya residents would be dumped, sits on the crest of a windswept hill. It immediately evoked for me those indelible 1970's images of Soweto and the apartheid bantustans of South Africa. Each hollow shell of a wooden house looked as if it had been erected in a day by a band of indifferent, ill-paid labourers. The moment I placed my feet inside the doors, the entire edifice shook, threatening to bring the roof and walls down about my head. It was an insult for the Governor to claim that these shacks were substitutes for the lovingly tended homes I had seen in One Putih Jaya a week before.

It's not just a three-cornered fight that's brewing around Bahomotefe. Inco also faces demands from provincial and district, governments for a significant new slice of the royalties cake that has so far gone only to Jakarta. Last year, the provincial governor of Southeast Sulawesi (site of PT Inco's putative 70,000 hectare Pomalaa extension project) reportedly told the company to clear off, unless it began negotiations over direct payments to the province (4). Under Soeharto's iron rule, such claims couldn't be entertained. Now, following "reformasi", they are escalating. This summer, Indonesia will see its first democratic elections for thirty years. If the army doesn't intervene to nullify the results (admittedly a big "if" considering it's currently threatening to quash self-determination for the peoples of West Papua, and has already backed paramilitaries against nationalists in East Timor and Aceh), all existing contracts of work, including Inco's., could be re-evaluated.

So far, like most other mining companies, Inco has argued that local benefits, including compensation payments, must be regulated by Jakarta. The corporation says it has paid millions of rupiahs already to the central government to settle existing claims.

Last year, however, the world's biggest mining company, Rio Tinto, was forced to re-negotiate a similar agreement, made in the early nineties to compensate Indigenous communities, for loss of land and natural resources to the Kelian gold mine of East Kalimantan. This followed a concerted national and international campaign for Indigenous participation in a new negotiating process, and the visit to Rio Tinto's 1998 annual general meeting in London, by a representative of the Dayak communities around Kelian.

Doing a Rio Tinto?

People in Bahomotefe were aware of this militant development, and the idea of "doing a Rio Tinto" on Inco in Canada certainly appealed to them. I found that it also excited Indigenous residents of Soroako. During my week in "Nickel Town" and its scarred surrounds, I was given chapter and verse on the betrayals that they considered they had endured. Before Inco arrived on their land, one thousand people had made a reasonable living from swidden agriculture, on soil which was already poor in yield, supported by the growing of fruits, palms and tubers, as well as the collection of rattan and resin from the forests (5). According to the chair of one local resident's association, Soroakons had first met Inco in 1969, in the person of then-manager Hitler (sic!) Singhwinatu. Hitler had promised that the company would "co-operate with all the local people" giving them free health care, education, electricity, clean water and priority in employment. Four years later, negotiations opened for the corporate acquisition of the peoples' land, as Inco began site preparation for stage one of its huge complex.

Said the Soroakon local resident's chairperson: "It was supposed to be a three way deal. Inco got what they wanted in return for giving us compensation and benefits. The government would set up a team to administer the funds. But the team hasn't functioned since. The only compensation offered was 300 rupiahs for each metre of requisitioned land. That was in fact the going market rate at the time. Half the community accepted the offer, but were only paid 15 rupiahs per metre. They signed a document which they didn't understand and of which they were never given copies. The other 69 heads of families didn't sign."

In 1974, some of these heads went to Palopo to talk with the government, and held a demonstration there. They were promptly arrested and imprisoned for a week without charge. Over the next decade, Inco acquired more and more Indigenous territory in and around Soroako. To house new workers and their families - mainly from Toraja, in South Sulawesi (6), two villages were constructed at Wapondula and Wasuponda, dislocating other people, some of whom were forced to move to the island of Luha , thirty kilometres away on Lake Towuti, in search of fertile land. (Despite its much vaunted post-mining rehabilitation programme, Inco has returned virtually none of the mined out areas to traditional farming). Meanwhile Inco established a health centre, schools and leisure facilities. Of particular - and symbolic -significance to the local people was the corporate seizure of their most productive rice paddy, for the laying of a golf course: a dubious enjoyment, from which most of the original inhabitants continue to be excluded.

Early this year, in the wake of Indonesian "reformasi", the Indigenous Soroakons felt emboldened enough to remind the company and government that undertakings given thirty years before had not been honoured. They were told by PT Inco that only 18 million rupiahs of the original "trust" fund remained - just a sliver of the US$95,000 which the company reportedly paid to acquire their land, and the additional US$80,000 supposedly made over as compensation for the loss of their crops (7). A copy of the 1973 agreement was found (apparently in company archives) dusted down and re-presented. On January 25th a local demonstration by Soroakons was met more sympathetically than its forerunner had been in 1974, The day afterwards, the Canadian ambassador turned up at Soroako, and Inco re-opened the long-stalled negotiating process.

Downwards spiral

But this was not to last long. Just as I was leaving Soroako at the end of March, a meeting between the company and residents was suddenly aborted by PT Inco. In the weeks since, no further meeting has been held or proposed.

My guess is that Inco will continue to stall, at least until this June's elections. It has nothing to lose by procrastination, and a lot to gain. The company clearly doesn't want to start negotiating a hefty benefits and compensation agreement - whether with Indigenous communities, transmigrants or workers - until it can gauge the determination of the new administrations. Even more important for Inco is to evaluate the costs and liabilities of proceeding with Voisey's Bay (including, of course the implementation of a benefits package with the Innu) before spending a single nickel more than necessary, to hang on in Indonesia. You do not require a degree in corporate finance to see that, even if Asian markets become buoyant again early in the new millennium (a considerable qualification), Inco may need to cut back on its outlays in Indonesia, to boost its parlous cash flows (8).

But the "Big Nickel" is trapped in a cleft stick. No future Indonesian government is likely to unilaterally rescind the company's Sulawesi contract of work. Nonetheless, political pressure to increase - and redistribute - royalties, along with new legislation mandating higher environmental standards and, above all, official recognition of the rights of Indigenous Peoples, are no longer the impossible pipe dreams they were a short year ago. For the present, I cannot predict the future of Soroako, or prospects for the rest of Inco's Indonesian domain. But, if the company's board in King Street, Toronto, or its underlings in Indonesia, think they can sail through the next 25 years, as unscathed, unhindered and as cheaply, as they have through the last, then they are baying at the moon.

And doing so as wistfully as the wild dogs which emerge every night from the forests, to pace Bahomotefe.

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