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Indonesian police may probe coal miners over deforestation-linked floods

Mongabay - February 18, 2021

Hans Nicholas Jong, Jakarta – Police in Indonesia are considering opening an investigation into allegations that a recent deadly flood in Borneo may have been exacerbated by environmental degradation linked to coal mining activity.

Twenty-four people died in the flood in early January that hit 11 of 13 districts in South Kalimantan province, while more than 113,000 people were displaced from their homes. Heavy rains had caused the Barito and other rivers in the province to overflow.

Environmental activists say the widespread deforestation across the province for coal mines and oil palm plantations exacerbated the disaster by compromising the catchment area's ability to absorb the high rate of runoff.

The environment ministry has refuted this, but now the police say they may call in mining company executives for questioning. Police spokesman Rusdi Hartono said investigators had identified top executives of companies believed to be responsible for the environmental degradation in South Kalimantan.

"We will summon higher-ups of mining companies there," he said as quoted by Bisnis newspaper. He added police were still working on the assumption that the cause of the disaster was entirely natural.

Merah Johansyah, coordinator of the Mining Advocacy Network (Jatam), an industry watchdog, said it's clear the disaster constitutes a crime.

"There's a crime there because 24 people have lost their lives," he told Mongabay. "Who are responsible for these 24 deaths? There needs to be an investigation into that, and it shouldn't stop at asking for clarification from several parties."

Merah said the investigation needed to involve other government bodies, particularly the Ministry of Environment and Forestry and the Ministry of Energy and Mineral Resources, both of which issue the licenses needed by mining companies. The investigation must also be independent and free of intervention from mining companies that wield powerful influence over politicians, Merah added.

"So don't let the investigation become a gimmick, as we haven't seen any law enforcement from the environment ministry and the mineral resources ministry," he said. "We haven't seen them evaluating [mining licenses] either." What they do instead, he said, is deny any links between the floods and deforestation for mining and agriculture. "Their job is not to deny, but to investigate," Merah said.

Environment and Forestry Minister Siti Nurbaya Bakar says the notion that deforestation made the floods worse is "misinformation," and has blamed the high volume of rain – nine times the average amount in the period from Jan. 9-13.

"There has been misinformation, especially [because] there's a lot of invalid data deliberately pushed by some parties," she wrote in Indonesian on Twitter on Jan. 20. "The cause of flooding in South Kalimantan [is] weather anomaly, and not about the size of forests in the Barito River's watershed area in South Kalimantan."

Coal giants

Among the companies that have come under the spotlight in the wake of the floods is coal giant PT Adaro Energy, which operates one of the largest mining concessions in South Kalimantan through a subsidiary, PT Adaro Indonesia.

According to the Indonesian Forum for the Environment (Walhi), the country's largest green group, there are nine flooded areas located near Adaro's concession. Another environmental NGO, Auriga Nusantara, says the company's operations have left a trail of deforestation in the region.

Adaro controls 31,380 hectares (77,500 acres) of land, an area nearly twice the size of Washington, D.C., in South Kalimantan. According to Auriga, one of Adaro's permits issued by the environment ministry gives it rights over 7,225 hectares (17,800 acres) of forest.

"From that permit, 630 hectares [1,500 acres] are located in the Barito's watershed area in South Kalimantan," said Dedi Pratama Sukmara, Auriga's data director.

The government has identified 18,418 hectares (45,500 acres) of degraded land in Adaro's concession; Jatam has separately identified 33 mining pits inside the concession that it says are no longer in use and should by law be rehabilitated.

Febriati Nadira, a spokeswoman for Adaro Energy, said the company had implemented good mining practices, "including rehabilitating watershed areas." She said the company had also rehabilitated watershed areas outside its concession in three districts in an effort to mitigate flood risks.

Garibaldi Thohir, Adaro Energy's CEO, denied the company had left any mining pits abandoned inside the concession.

"Inshallah [God willing], we always comply, not to mention that we've received awards from the Ministry of Environment and Forestry a couple of times," he said as quoted by Tempo newspaper.

Garibaldi, whose brother, Erick Thohir, is the minister of state-owned enterprises, was referring to the Environmental Performance Rating Program (PROPER), an annual award handed out by the environment ministry to companies deemed to comply with environmental regulations and innovating in green technology.

Besides Adaro, 20 other mining companies have concessions in the Barito River's watershed area. PT Arutmin Indonesia, a subsidiary of Indonesia's top coal miner by output, PT Bumi Resources, is another mining giant operating in South Kalimantan that has received the PROPER award.

Activists have long criticized the PROPER award as a greenwashing gimmick aimed at making firms appear more environmentally friendly than they actually are, since mining companies often dominate the list of recipients of the top-tier gold category. Only companies that can maintain good waste-disposal practices for a minimum of three consecutive years are eligible for that category.

"There's no way 'coal companies' and 'environmentally friendly' belong in the same sentence," Merah said. "Coal mines damage the environment because they alter the natural landscape, from hills to mining pits. So how can they be friendly to the environment? PROPER is just a greenwashing tool that benefits companies so that they can have greater access [to financing] to further expand their businesses."

Arutmin is also alleged by Auriga to be operating in a forest area without a permit. The NGO has identified 31,500 hectares (77,800 acres) of Arutmin's concessions as falling inside forest areas, for which the company only has permits to 14,000 hectares (34,600 acres).

Dileep Srivastava, director of Arutmin parent company Bumi Resources, has denied this allegation, saying the information is inaccurate.

Permit profligacy

Activists have also criticized the government for issuing licenses allowing coal companies and others to clear vast swaths of rainforest in the region. To date, 924 licenses have been issued for mining operations in South Kalimantan, but only 248 are still active at present.

These licenses are for a combined 506,469 hectares (1.25 million acres) of land, an area three times the size of London, according to data from Auriga. The vast majority are in the Barito River watershed, and of those, nearly all are coal concessions. Some of these concessions are located inside forest areas, which are typically off-limit to non-forestry activities, such as mining and plantations.

For companies to be able to legally mine inside forest areas, they have to obtain a "borrow-to-use" permit, or IPPKH by its Indonesian acronym, from the environment ministry. Since 2004, the ministry has issued 71 of these permits for mining concessions in the Barito's watershed area in South Kalimantan, allowing mining companies to operate inside 42,601 hectares (105,200 acres) of forest areas they were previously forbidden from exploiting, according to Auriga. Forty-nine of the permits, covering 30,247 hectares (74,700 acres) of forest, were issued from 2014 onward, when the current administration of President Joko Widodo came to power.

"This means that the current administration singlehandedly issued more permits" than the previous three combined, said Merah from Jatam.

Hanif Faisol Nurofiq, secretary of the environment ministry's planning department, denied that the ministry had been reckless in approving borrow-to-use applications. He said all applications were evaluated and the permits issued in accordance with environmental and legal safeguards.

"If the borrow-to-use permits are expired, a detailed evaluation is carried out immediately," Hanif said as quoted by Tempo newspaper. "That's the control mechanism by the ministry which involves the province [government] related to forest areas."

Environment ministry spokeman Nunu Anugrah added that the ministry had stopped approving new borrow-to-use permits for forest areas protected under various government initiatives, including a moratorium on new licenses in primary forests and peatlands, as well as the social forestry and agrarian reform programs.

He said the ministry had also limited the size of areas where mining activity is allowed in forests, to 10% of the borrow-to-use permit areas. Each borrow-to-use concession is also capped at 1,000 hectares (2,500 acres) per permit.

"In general, the size of mining licenses inside forest areas is much smaller compared to permits issued by local governments or related agencies outside forest areas, including illegal mining operations that have been going on for years, even decades, before President Joko Widodo's administration," Nunu said in a press release.

The president's chief of staff, Moeldoko, also denied that the administration had been profligate in handing out mining licenses. "We need to see further on how many permits have been issued under [Widodo's] leadership," he said. "In my opinion, it can be said that [the number] is very small."

'Red-carpet treatment'

Activists warn that the environmental destruction wrought by companies operating in South Kalimantan could get worse under a slew of recently issued deregulation measures by the government that they say favor extractive businesses and sideline environmental protection.

Hindun Mulaika, climate and energy campaign manager at Greenpeace Indonesia, pointed specifically at the so called omnibus law on job creation and the amended mining law, both passed in 2020. The former ushers in a sweeping overhaul of mining regulations, which activists warn will make it easier for companies to dig for coal, unconstrained by environmental or social safeguards.

One article, for instance, exempts coal-mining companies from paying royalties if they develop downstream facilities, such as gasification plants or coal-fired power stations. The stipulation will deprive the state of up to $1.1 billion in annual coal-mining royalties, at a time when the country is suffering from an economic slump due to the COVID-19 pandemic.

"By giving incentives of royalty exemption for coal businesses, it will exacerbate the digging of existing [coal] resources," Hindun said. "The coal industry has become a golden child under the [Widodo] administration by giving many incentives [to mining companies]."

Another provision in the omnibus law that has been heavily criticized is the scrapping of a requirement for all regions to maintain a minimum 30% of their watershed and/or island area as forest area. Greenpeace Indonesia forest campaign team leader Arie Rompas said this would encourage even greater deforestation and thus increase the risk of disaster in the future.

"Some watershed areas [in Indonesia] have had their forest areas decline to less than 30%" before the passage of the law, he said. "This shows how important it is to maintain the 30% minimum requirement. But for the sake of the oligarchs, [the government and lawmakers] changed that to make it easier to issue permits."

The amended mining law, a revision of legislation from 2009, also provides a number of incentives to mining companies: bigger concessions, longer contracts with automatic renewals, and fewer environmental obligations.

The stipulation of automatic permit renewals is especially problematic as it will allow mining companies in South Kalimantan to continue operating for decades to come and wreaking havoc on the environment there, according to Hindun.

She cited the case of Arutmin, which controls a total of 34,207 hectares (84,500 acres) of mining concessions in South Kalimantan. Hindun said the company won a renewal of its contract for 10 years in November 2020 – just one day after its previous permit expired – thanks to the new mining law. It will be able to extend its contract again after 2030.

Activists have identified six other major mining companies set to benefit from the new permitting rules once their existing licenses run out in the next year or so. Among them is Adaro, linked to the family of Erick Thohir, the government minister.

"Adaro has 31,380 hectares [77,500 acres] of mining concessions in South Kalimantan and will also be easily able to extend its permit without having to relinquish its current concession," Hindun said.

Arutmin denied that it benefited unfairly from the new mining law, saying the process to get its contract extended was thorough, involving technical, administrative, environmental and financial evaluations. The company said it complies with environmental safeguards and guidelines in its operations.

However, Merah said the government's renewal of Arutmin's contract wasn't transparent, raising questions about how the company was able to pull it off.

"The president has to take responsibility because these permit renewals are under his tenure," Merah said. "So our forests are destroyed because they're being managed by the state, while the state is controlled by oligarchs."

Hindun said the government's policy of continuing to support the coal industry is at odds with the global trend of shifting from fossil fuels to renewable energy. An increasing number of countries are announcing their plans to phase out coal from their energy mix due to its high carbon emissions and contribution to the climate change, while Indonesia is the only country in the world where coal companies still receive the red-carpet treatment, Hindun said.

"So Pak Jokowi," she said, referring to the president by his nickname, "if you truly cares about the victims of the disasters that are going on now, don't just send rubber boats. Revoke the omnibus law and the mining law. Pass the bill on Indigenous peoples and the bill on renewable energy bill."

Source: https://news.mongabay.com/2021/02/indonesia-police-investigate-coal-mine-companies-south-kalimantan-flood