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O'Neill, lgor --- " Asia-Pacific: Mining in Indonesian forests" [2004] AltLawJl 24; (2004) 29(2) Alternative Law Journal 101

Insights from the region

From theories of evolution to demands for land revolution

Delirious with malarial fever at his home on the island of Ternate, the young naturalist Alfred Wallace was seized one night in 1858 with a vision which made sense of years spent collecting specimens throughout Indonesia: 'There suddenly flashed upon me', he later reported, 'the idea of the survival of the fittest'. Between bouts of fever he penned and mailed to Charles Darwin in London the famous 'Ternate Paper',[1] unveiling the theory of evolution and setting in train a total upset of the scientific and theological establishment. A century and a half later, people are still rocking the establishment boat at Ternate, not at home but locked in the cells of Ternate police headquarters. Imprisoned community protesters in North Maluku are determined to reclaim land rights and prevent open-cast (also known as 'open-cut') gold mining in their hutan adat Toguraci, the Toguraci Protected Forest ('Toguraci'). The violent crackdown on these protesters has drawn attention to a long-running environmental conflict, which pitches the Australian Embassy, foreign mining companies, the Indonesian military and paramilitary police on one side, against local people and non-government organisations (NGOs) who support protected areas on the other.

Protected areas under threat from mining

Indonesian Mining Ministry chief, Mr Wimpy Tjetjep, has revealed there are 158 mining leases over Indonesian protected forest areas. The Indonesian House of Representatives has been presented with a list of22 companies pushing for fast-track approval, including multinational giants BHP Billiton, Rio Tinto, Placer Dome, Newmont, Newcrest, Freeport and lnco. The Australian Embassy has championed their case, holding numerous lobbying meetings with Indonesian Government figures over the, past several years to lobby for protected forest mining.

In response, a national week of action last July saw community protests in 13 cities in Sumatra, Kalimantan, East Nusa Tenggara, Sulawesi and Java. Five thousand postcards supporting the ban on mining in protected forests have been collected by a coalition of NGOs: Friends of the Earth lndones1a; Indonesian Center for Environment Law; Mining Advocacy Network; Forest Watch Indonesia; Mineral Policy Institute: WWF Indonesia; and the Indonesian Biodiversity Foundation. Yet, the Australian Embassy remained unmoved, even when, oh 2 July 2003, a demonstration was held at its front door featuring kangaroo motifs and banners reading “Wake up mate, forests not mine!”.

Alfred Wallace himself might have shared the Indonesian view that protected areas are necessary and more valuable than gold mines, making a prediction to illustrate the importance of preservation of the record of natural history.

If this 1s not done, future ages Will certainly look back upon us as a people so immersed in the pursuit of wealth as to be blind to higher considerations. They will charge us with having culpably allowed the destruction of some of those records of Creation which we had it in our power to preserve.[2]

It seems Newcrest and the Australian Embassy in Jakarta don't share his vision, because they have also ignored protests specifically against the Toguraci mine, including a letter signed by 38 local village heads. Instead, Australian Embassy staff lobbied at the behest of Newcrest to have protesters removed from Toguraci after a community occupation forced Newcrest to halt construction of its open pit gold m1ne for five weeks in late 2003. Newcrest has made payments to both the Brimob paramilitary police and Indonesian military who have guarded the site for several years, and admits entering into 'corporate

relationships' with senior military officers to provide protection.[3]

Rewards for the Embassy and Newcrest?

In late 2003, 60 Brimob paramilitary police fired their weapons overhead in what deputy police commissioner for North Maluku, Muhamad Kosim, described as 'shock therapy'[4] to remove protesters and end the occupation of Toguraci. This was just a taste of things to come: Brimob crushed a subsequent protest, shooting one protester dead at Toguraci on 7 January 2004, and reportedly detaining and beating almost 200 others on Newcrest premises. Newcrest's helicopter was used to transport six protesters to police cells in Ternate, where three were held for over a month without trial.[5]

'From Kobak we headed for Toguraci. We were met by 2 Brimob officers carrying weapons. After we reached the Toguraci location we were ordered to sit and 20 minutes later 4 vehicles brought Brimob and their commander', testified Mr. Barto, a 42 year-old community figure and farmer from the village of Dum Dum Beach, Jailolo district, West Halmahera.
'Without any dialogue, they began beating us, kicking us, trampling on us and rolling us around on the ground. Then we were made to sit up again and the Brimob commander pulled out his pistol and shot a couple of times at our feet, then the third shot hit Mr Rusli Tungkapi tn the head, dead night there. We were all taken to the PT NHM [Newcrest] security post and beaten again and stripped naked. A while later our wtves demonstrated to set us free', concluded Barto.[6]

These alleged breaches of human rights, and Newcrest's role in them, are currently under investigation by Komnas HAM,· the Indonesian National Commission on Human Rights. When challenged by environment group WALHI and a North Maluku protester in a subsequent meeting on 22 January 2004, the Australian Ambassador to Indonesia, Mr David Ritchie, defended Embassy lobbying to have protesters evicted.[7]

Environment protection laws versus the signature of a dictator

Newcrest and the Australian Embassy say they believe the company has the legal right to push ahead with the mine within protected forest, pointing to Indonesian President Soeharto's signature on a 1987 contract which grants Newcrest's company, PT Nusa Halmahera Minerals, exclusive rights to explore and mine for gold over more than half of the province of North Maluku. This alone should ring alarm bells: the dictatorial 'New Order' rule of former President Soeharto is famous both for murdering an estimated 500,000-2,000,000 Indonesians, and for a habit of accepting substantial bribes. It is not known to ever have required consultations with local people before signing away their land to foreign mining companies.

'We demonstrated against the arrival of PT NHM [Newcrest]. As long as it has been operating 1n our area there has been no peace and prosperity 1n our lives, rather it has been suffering, and the removal of community rights that we've experienced', testified Mr Fahri Yamin, 27 year-old youth figure from Ngofa Kiyaha village, Malifut District, Halmahera.

'PT NHM hasn't got permission so why has our trad1tional forest, protected forest, why is it cleared without confirmation with us the local community?' questioned Fahri during an interview in Temate police cells where he was held without tnal for a month.[8]

Yet the Toguraci mine is clearly illegal: Article 38(4) of Law Number 41 On Forestry 1999 (Indonesia) ('the Forestry Law') provides: 'Open-cut mining is prohibited in protected forest' ('the ban'). In fact, say lawyers Ahmad Santosa and Rhino Subagyo of the Indonesian Center for Environmental Law, a breach of this clause is defined as a criminal offence under the Forestry Law. Articles 78(5), (12) and (13) further specify that if the breach is committed by a legal entity, members of the board of management face punishment with a fine of up to 5 billion rupiah or ten years imprisonment.

Why risk criminal proceedings by pressing ahead? Newcrest claims it has letters of approval from the Departments of Mining and Forestry. In fact, the letter from the Forestry Minister dated 9 May 2003, points out that open-cut mining is prohibited in Toguraci. The letter does allow general activities until the end of June 2003, to give the Indonesian House of Representatives time to consider changing the Forestry Law. Not only has that window of time elapsed, but no Indonesian Department nor any Minister has the authority to waive the ban. Only the Indonesian House of Representatives has the authority to repeal or amend the Forestry Law. For now, the mining ban stays.

The chief of the Planning Division at the Indonesian Department of Forestry, Dr Boen Pumama has provided further confirmation, saying 'If their plan is to mine in a protected forest, they will certainly not be given permission. Right now we are investigating to see whether it is true that mining has begun at Toguraci. We did not permit it.'[9] Likewise, Bambang Gatot Ariyono, head of the relevant directorate of the Mining Ministry has stated that Newcrest does not have permission to begin exploitation yet.[10]

The company is not so coy, proudly announcing that Toguraci poured first gold in February 2004. Unfortunately, there is . reluctance to enforce the Forestry Law because of mining industry threats of international arbitration to enforce their Contracts of Work signed with the Indonesian Government,

a threat which the Indonesian House of Representatives has been warned is estimated at US$22.8 billion. An examination of arbitration law and the contracts suggests the Government has little to fear from the ban. There is no breach of the contracts since Article 23(2) of the contract affirms that signatories must abide by the changing laws and regulations of Indonesia at all times. However, the Foreign Investment Law 196 7 (Indonesia), multilateral investment treaties and the bilateral investment treaty between Australia and Indonesia provide foreign mining companies with an avenue to pursue compensation in domestic courts and

at international arbitration. Compensation claims in relation to the ban on open-cut mining in protected forests may argue violation of the guarantee of fair and equitable treatment; or violation of the guarantee of adequate compensation for 'indirect expropriation' (ie, effective dispossession). It has been argued that these actions would fail, however, because:

• there is a long-standing precedent which allows for 'legitimate regulation by the government in the public interest'

• the Forestry Law is not unfair or inequitable since it applies to all mining companies

• the ban is not 'indirect expropriation' because:

- it does not transfer rights or benefits to the government or a third party

-companies still have the right to use methods other than open-cut mining in a protected forest, and may use any methods they please outside of a protected forest.[11]

Unfortunately, the mining industry's threat of international arbitration has been allowed to form the basis for an attempted exception from the ban on mining in protected areas. On 11 March 2004, with national elections less than a month away, and most politicians campaigning outside of the capital, a small meeting of the Megawati Government Cabinet issued a Government Decree to Amend a Law (Decree No 1 2004) to change the Forestry Law. The Decree added a new provision to the Forestry Law, as follows: '83(a) All permits or contracts related to mining in forest areas which were in existence

before the Forestry Law are confined to remain valid until the intended end of the permit or contract'.

Indonesian environment groups are planning to challenge this Decree, arguing it is an unconstitutional use of a presidential power, which may only be used in case of national emergency. They note that the amendment must be approved by the House of Representatives and that, in any case, the Decree does not explicitly state that open-cut mining in protected forests is to be permitted. Further, since the Forestry Law takes precedence over a contract, mining companies which operate open-cut mines in protected forests are still carrying out an illegal act.

Local communities have a hard road ahead to reclaim their lands from violence and unjust mining contracts. We can help them, and contribute to the survival of Indonesia's protected areas, by putting an end to the closed-door lobbying of diplomats and diggers.

IGOR O'NEILL works in Indonesia for the Mineral Policy Institute and as a volunteer with Friends of the Earth Indonesia (WALHI).

© 2004 Igor O'Neill

[1] Alfred Wallace, 'On the Tendency of Vanet1es to Depart Indefinitely from the Original Type' in Proceedings of the Linnean Society of London (1858) vol 3, 53-62

[2] Alfred Wallace, (1863) 33 Journal of the Royal Geographical Society 217, 234.

[3] Damien Kingsbwy, Australian academic quoted in Andrew Burrell, 'Too High a Price for Protection', Australian Financial Review (Sydney), 15 January 2004

[4] Andrew Burrell 'IllegalM1ners Forced Off Site', Australian Financial Review (Sydney), 5 December 2003

[5] Interviews with eye-witnesses and detainees (lndonesia). Igor O'Neill (trans), testimony from protesters Mr Daud Musah, Mr Barto, Mr Fahn Yamin, Mr Reynold Stmanjuntak, Mr Asrul, Mr Danus Kano, Mr Yance Namaotemo (Halmahera Indonesia, Temate police cells, lndonesia; 24--27 January 2004)

[6] Ibid, testimony from Mr Barto

[7] Meeting organised and attended by author, Longgena Ginting (Director of WALHI) and lkono Djambak (Halmaheran protester).

[8] lnterview, above n 5, testimony from Mr Fahn Yamin

[9] Stan Powell, 'Indonesia Minefield for Miner Newcrest' The Australian (Sydney) 24 February 2004

[10] lbid

[11] Stuart Gross, 'Inordinate Chill: BITs, Non-NAFTA MITs, and Host-State Regulatory Freedom – An Indonesian Case Study' (2003) 24 Michigan Journal of International Low 893

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