Mining in 'protected' forests

Down to Earth No. 47, November 2000

Mining companies are lobbying to change legislation which prohibits open-pit mining in areas designated as protected forests.

"Forest lands can only be used for development needs other than forestry in Protection and Production Forest areas . . .  No open-pit mining is permissible within Protection Forest areas." 
(Article 38, Forestry Law 41, 1999)

Indonesia's new forestry law, passed last year, prohibits open-pit mining in forests classified as 'protected forests'. As a result, some 150 mining companies whose contracts were signed before the law was passed and whose areas include protected forests, are suspending their operations while their legal position is clarified.

Now, under concerted lobbying by the mining industry and economic pressure, the restrictions on these companies may be lifted. NGOs fear that the government will cave in to industry and economic pressures and give the go-ahead for open-pit mining to resume in protected forests.

In September, Co-ordinating Minister for the Economy, Rizal Ramli, launched an official 3-month study into the 'exploitation of forest areas for mining... with the aim of formulating national policy'. The team given the task of carrying out the new study is made up of personnel from the finance, mines and energy and forestry ministries, with no-one from the environment minister's office and no non-governmental representatives included. According to the ministerial decision setting up the study (Kep-04/M.Ekon/09/2000), the 150 mining contractors have invested substantial funds in exploration and exploitation activities in protected forests. A source at the mines and energy ministry told MinenergyNews.Com that these investors had suffered losses of US$426.8 million since halting their activities, causing an estimated loss to the state of US$110 million. According to one industry assessment, some 41% of existing contracts will be affected by the forestry law if it is implemented unchanged. Added to the existing no-mining area covered by national parks, it would also mean that almost 30% of Indonesia would be closed to mining. This assessment, which argues against the ban, states that protected forests are among the best lands for exploration.

According to official information obtained by mining advocacy network JATAM, the mines and energy department is conducting secret negotiations with the forestry department to make some 11.5 million hectares of protected forest and nature reserves across the archipelago available for mining.

One company known to be involved in such discussions is the Australian mining company, BHP, which plans to open a nickel mine on Gag Island, West Papua, in partnership with Canada's Falconbridge and Indonesia's PT Aneka Tambang. The original contract was signed in 1990. In July, the Jakarta Post reported the company was "working with various Indonesian authorities" to have the forest classification changed.

(MinenergyNews.Com 9/Oct/00; Clive Aspinall Report cited in Mining Journal 14/Apr/00; JATAM 12/Oct/2000; Jakarta Post 28/Jul/00) 
See also our Summary of 1999 Forestry Act