Mamberamo mega-project to proceed

Down to Earth No 49 May 2001

An eco-disaster in the making, the Mamberamo mega-project is to go ahead soon, according to Indonesian government officials. The first stage of the project will go ahead after the implementation of 'special autonomy' and will be jointly managed by foreign investors, through the Jakarta and provincial administration, according to Dance Flassy, head of Development of Irian Jayan Autonomy. He claimed that investors from the US, Australia, Britain, Japan, Germany and the Netherlands had expressed interest in developing a wide range of industries at the site.

The Mamberamo Watershed project area, a staggering 7.7 million ha area covering pristine lowland swamp forests and mountainous highlands, was first slated for development during the 1990s, under an agro-industrial scheme devised by then technology minister, B.J. Habibie. The financial crisis and lack of success in finding investors has delayed the project (see DTEs 32, 34, 35 and 37 for background).

According to a report in the Indonesian language newspaper, Kompas, West Papua's governor JP Salossa, said that loans from the World Bank and ADB would fund the US$ 6 billion hydro-electric project, whose 3 units would generate 10,000 Megawatts of power. In response to DTE’s enquiry, the World Bank’s Environment and Social Development Co-ordinator, Tom Walton, said that the Bank “is not funding and has no plans to fund the Mamberamo mega-project. Mr Walton believes that “a correctly-done social, environmental and economic assessment would show it to be a bad idea, no matter what the funding source.” As yet DTE has received no reply from the ADB.

Flassy told ministers on a working visit to Jayapura in March that, during the first stage, 5,600 MW would be developed and that the dam and power plant would take 5-7 years to build. Port facilities would need 2-3 years, agro-industry 3-4 years , heavy industry 6-7 years, fertiliser plants 4-5 years, and fuel-cell engine industry 3-4 years.

He said that US investors were interested in developing dockyards, pulp & paper and heavy industries, Australian companies were interested in steel, chemical and aluminium industries; British investors in ports, Japanese in steel, petrochemicals and fuel cell engines; German investors in steel, chemicals, petrochemicals, and automotive industries; and the Netherlands in port, industrial areas and town development.

However, acting head of the Mamberamo Hydro-electric and Industry Development (BP-PIM) Ir LM Sianipar admitted that the present political conditions meant that investors were still refusing to invest in projects in West Papua. Jayapura district head Yan Karafir warned that local landowners and the Jayapura district administration would have to be involved before investors could enter Mamberamo. "Jakarta should not be allowed to speak to the foreign investors in Jakarta without the Jayapura district head and the people knowing about it. If that kind of negotiation-style is used, the investors will suffer difficulties in the area," he said.

In September last year, Indonesia's research and technology minister confirmed to the NGO forum INFID that the Mamberamo project was still under consideration. With studies by the the technological development board (BPPT) already completed in 1999, said M. Hikam, it was now up to the government to decide whether or not to go ahead. If they do, he said "my job is to ensure that ... there should be serious studies in terms of environment and social impacts in the area."

(Source: Kompas 2/Apr/01; 24/Mar/01; BBC Summary of World Broadcasts, 28/Mar/01; World Bank email to DTE 9/Apr/01; email message to INFID, 16/Sep/2000)

Villagers demand compensation from Tangguh developers

Indigenous villagers in Manokwari district threatened in March to suspend the operations of oil multinational BP in the area, if the company continued to refuse to settle compensation payment for sago plants destroyed during seismic surveys. According to Sebiar indigenous leader Aci Kosepa, the company agreed to pay compensation of Rp 1.8 billion (about US$180,000) to residents of Wiriagar village and Rp 700 million ($70,000) to Tomu village, but the payments have never been made. The sago trees - which provide a staple food for local people - were destroyed during seismic surveys in 1996 and 1997.

China's selection of BP (the Anglo-American merger of British Petroleum and Amoco) as partners to construct a $600 million gas terminal project there makes the giant Tangguh gas development project in West Papua more likely to go ahead.

Current estimates by the company say that construction at Tangguh will start in the second quarter of 2002. The gas fields, developed by BP under production-sharing contracts with state-owned Pertamina, are due to start producing by 2006 (see DTE 48 and DTE 45 for more background). 
(Petromindo 20/Mar/0; Dow Jones Newswires 20/Mar/01; Jakarta Post 11/Apr/01)