MAC: Mines and Communities


Published by MAC on 2003-10-08


Inco Must Give Back Land to Community and Rehabilitate the Environment

Jakarta, 8 October 2003

Coalition for Justice and the Future of the Earth

INCO Ltd, is a nickel mining company from Canada that at this moment is lobbying the government of Indonesia to be permitted to conduct mining in protected areas. The concession area that PT INCO, largely controlled by INCO Ltd, is 218,000 hectares, 47% of which is located in protected forest areas, encompassing three provinces in Indonesia: South, South East and Central Sulawesi. As well as these areas, INCO also has plans to pursue operations close to Lake Matano in South Sulawesi. Mining operations close to Lake Matano not only threaten vulnerable ecosystems in this area, but also create many problems for the local communities who rely on this lake for their livelihood.

Since the signing of the Contract of Work in 1968, the mining practises of INCO have been as bad as other mining companies. Land conflicts with indigenous communities, such as Karonsi’e Dongi, that have been ongoing for many years, still have not been addressed. The same fate has fallen o the displaced people of Bahomotefe and Oneputejaya in Morowali, South Sulawesi, whose traditional land was claimed by PT INCO. These communities also relied on the lakes and land for their livelihood, and homes, but have still received no compensation.

These conflicts are some of the examples of the issues communities have with PT INCO, and what makes this company one of the lowest cost producers of nickel. INCO is able to produce nickel at such a low cost by not caring about the impacts they have inflicted on the environment. The company has not done any reclamation work on the areas where they have had operations. They have also caused excessive damage to the mountains through the excavation process. It is the community that suffers.

“INCO must beg for forgiveness from the communities, the people who have been victimized by their operations, pay compensation for the land they have stolen from the people and clean up the disaster they have left behind in the environment,” says Chalid Muhammad, the director of the Indonesian Mining Advocacy Network (JATAM).

According to Chalid, aside from the environmental destruction, other issues INCO has brought to communities is the discrimination of the local residents, human rights abuses, and the devastation of the social culture of the community, and a disruption to the local economy and sources of livelihoods. “Who will be accountable for economic development after the company closes operations,” questions Chalid.

INCO has caused the pollution of the Larona River through a hydroelectric project that has been devastating to the environment. The Larona River was dammed to supply enery for PT INCO’s processing plant in Soroako. The Canadian Export Credit Agency has provided $60 million in funding for this project. PT INCO received the permit to construct the Larona Dam from the Soeharto regime in a scheme to develop mining. The military provided support for this project by acting as security, and using force to intimidate the local community.

In 1994, PT Inco renogotiated its agreements with the government, the operation in Soroako was to be increased by 50% before 1999, and two more processing plants to be constructed by the river. This process was not agreed to by the community, and did not have rigorous environmental testing or socialization not consulted between the government and the indigenous community.

INCO actually does not contribute to the economic development of the country, because they weilded their power to reach agreements with a largely corrupt Indonesian government to receive massive tax breaks. The total amount of income the government of Indonesia earns through royalties is insignificant, in relation to the amount of profits it extracts; as low as 4%. This amount could never cover the enormous costs of rehabilitating the environment and providing adequate compensation for the land seized for its operations.

Portrait of Inco’s Injustice in Other Areas

Examples of Inco being unjust can be found not only in Indonesia. In Canada, INCO has been named by Environmental Defence Canada as the worst mining polluter in the country. The amounts of pollution generated by INCO were found to be 13 times more than its rival Falconbridge even though Inco produces only 3 times the nickel. In Port Colborne, Ontario, Inco has recently been ordered to clean up 25 properties that were contaminated with lead, nickel and other metals as a result of their refinery. A recent study has found unreasonably high rates of cancer in the area closest to Inco’s operation. The community has suffered many health and safety problems as a result of the Inco refinery, and many former employees have either contracted cancer, or suffered other heath issues, and many have died from these condition.

In Guatemala, the INCO had been in operations as Exmibal since 1968. In 1978, hundreds of peaceful demonstrators were killed by the military, when they attempted to protest the operations of Inco. Groups such as Amnesty International believe INCO was directly involved. Although the mine has been inactive since 1983, there are fears that INCO will resume operations.

For the above reasons, the Coalition for Justice and Future of the Earth issues this position statement:
1. Reject Inco plans to mine in protected areas.
2. To push the Canadian Embassy to force INCO to be accountable for the environmental and social impacts their operations have caused
3. Force INCO to address cases of pollution, and to return land to communities
4. To give just compensation to the communities impacted by PT INCO
5. To renegotiate the Contract of Work with the three provincial governments in Sulawesi, and involve community in the process.

Home | About Us | Companies | Countries | Minerals | Contact Us
© Mines and Communities 2013. Web site by Zippy Info