Testimony of Hendrik Siregar – Coordinator of Indonesian Mining Advocacy Network (JATAM).

My name is Hendrik Siregar and I came to the UK to speak at the BHP Billiton AGM about its plans for a major coal develoment in Central Kalimantan. Communities in Kalimantan (and particularly near to BHP Billiton's Indomet project) have told us that they do not want more mining companies to come to their lands to disrupt their lives and take away their traditional livelihoods. If the Indomet project in Central Kalimantan continues to proceed it will destroy the heart of Borneo's rainforest and the lives of the communities that live there. This region has been described by the Asian Development Bank as the 'Lungs of Asia'. I came to the UK to draw attention to these issues and seek greater understanding of the destructive impacts of mining operations in Kalimantan and elsewhere in Indonesia.

My organization advocates for communities that approach us when their lives have been disrupted by mining companies and when they have no other alternative but to seek help to resist these projects. JATAM gains its mandate to speak out about these issues as a consequence of our direct links with communities all over Indonesia.

Investment in mining at the expense of local people.

Firstly, I would like to comment on how we see our government has prepared the 'fertile ground' for foreign investment in mining projects in Indonesia. Despite government rhetoric, this investment does not benefit local communities, nor does it create wealth for ordinary Indonesian people.

Foreign investors complain about Indonesia’s complex bureaucracy and lackof rule of law. But really they love Indonesia, because regulations can be negotiated. The economic crisis in 1998, was used by business and financial institutions to deliver various "aid” packages. These “aid” packages were often linked and conditional on the drafting new legislation for Indonesia.

Many of Indonesia’s laws are very pro-investment, especially pro-foreigninvestment. These include laws on Land Procurement for Development, Plantations, Foreign Investment, Oil and Gas, Water Resources, Forestry, the Management of Small Islands and Coastal Areas – as well as Indonesia’s law on Minerals and Coal.

While investors are protected, people living in investment target areas arecriminalized. Many land-based investment projects violate laws, but are not held to account. In cases of corruption, the state agency involved gets the blame, not investors.

In addition to the laws, investors benefit from a package of incentives offeredby the government. For example, the reduction or elimination of tariffs on industrial heavy equipment imported for use in mining.

Investors obtain licenses easily. Almost no concessions are granted with theconsent of communities.

Investors acquire vast areas of land and long term leases.

An Overview of the Mining Industry in Indonesia.

Since the 1980s, as a result of mining and plantation operations and following on from previous waves of legal and illegal logging, the majority of Indonesia's forests have been destroyed and are continuing to be destroyed. These forests are our inheritance for our children and the source of livelihoods for many of our rural communities.

Of the total land area of Indonesia, currently 44% of it is given over to mining, oil and gas concessions. If concessions for oil palm plantations are added to that figure, the total percentage rises to 68%. You will appreciate that given these figures, we in Indonesia are left with the question of where will our people live when all of these concessions are developed?

Of these mining, oil and gas concessions, 40% are concessions for the coal industry. Currently, there is a 'coal rush' going on in parts of Indonesia such as Kalimantan and Sumatra. UK based companies are part of this situation which is spiralling out of control. Approximately 14,000 permits have been issued to mineral and coal concessions. These permits are bought and sold, causing endemic corruption. This land for which these permits are issued is officially categorized, but is easily open to change through bribery and corruption. The mines that follow are mainly open-pit mines that cause huge irrecoverable environmental and social damage. The presence of these mines and the mining industry causes human rights violations with the influx of military, police and private security forces, acting in the interests of these companies. Local employment as a consequence of these mining projects is small – the companies mainly employ inmigrant workers, who move from project to project. Mining operations are no longer employ large workforces and more often than not management places are taken by foreign employees. In short, mining causes land-grabbing from local communities and leads to environmental and social destruction and ultimately increased poverty for local people.

In summary:

Conservation areas can be converted easily.

Social, economic and ecological land functions can be changed easily too.

Security guarantees: the security forces will support business operations often to the cost of local people.

Investors are "subsidised" for the damage they cause. The state spends a lot ofmoney on tackling disasters arising from mining damage.

Mining companies don’t face legal action if they break the law.

They can freely use public resources and facilities at the expense of local people.

Mining companies can be in arrears with taxes or royalties with apparent impunity.

There is a “political guarantee”: the majority of the party leaders and politiciansare businessmen. Many benefit from the granting of mining permits and licence or are themselves involved in the mining business. Nearly all the political parties and main presidential candidates receive major funding from the mining industry.

What does this mean for local people in mining target areas?

Loss of land, forest resources and livelihoods

Widespread displacement of communities

Indigenous people's right to 'free, prior and informed consent is not respected'

Health Problems; pollution of air, water and soil.

Large-scale rampant environmental destruction (dumping of tailings waste in rivers, poisoned tailings ponds, land reclamation rarely implemented.)

A 'Dark Generation'; a process and legacy of impoverishment

Major social and culture impacts

A source of endemic conflict

Other destructive effects of the Mining industry.

Mining for coal in Indonesia means deforestation, destruction of peatland and therefore massive greenhouse gas emissions.

Coal is burned in consumer countries leading to more greenhouse gas emissions.

Climate change impacts on top of mining impacts, including local severe flooding, unpredictable weather, affecting farming and fishing.

Despite massive coal production, local communities suffer severe electricity shortages as most of Indonesian coal is shipped out of the country.

Only 76.9% of the Island of Java and Bali receives electricity. In Sumatra the percentage is 76.7% and in Kalimantan and Eastern Indonesia 62.4%.

Conclusion.

The mining companies would like to portray themselves as agents for development and wealth creation. In reality in Indonesia, the mining industry is destroying the lives, livelihoods and land of rural and indigenous communities in Indonesia. Not only this, but the wider legacy of the mining industry is one of corruption, increased urbanisation as communities are pushed off their land and consequently greater levels of poverty for many Indonesians.