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Environment Watch: The intricate state of the overlapping mining area in Morowali
Cashew farmers, village leaders, a mining company and a governor have all become embroiled in a land and community dispute in Central Sulawesi, a classic study in how not to balance community needs and capital ventures
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Cashew farmers, village leaders, a mining company and a governor have all become embroiled in a land and community dispute in Central Sulawesi, a classic study in how not to balance community needs and capital ventures.
To understand what happened we have to go back to 1996. The government extended the concession rights of nickel mining company PT INCO Tbk. in 1996 to 2025, entitling it to conduct mining activities in South, Central and Southeast Sulawesi provinces, better known as the Bahodopi block, for 30 years.
Its concession area in the Bahodopi block covers 36,000 hectares, but 1,600 ha of that land have already been given over to the transmigration community in Onepute Jaya village, Bungku Tengah district in Morowali regency. Disputes have arisen due to this overlapping ownership of the company and the transmigrants.
The land dispute ensued in the early 1990s, when 987 transmigrant families were moved to the Transmigration Settlement Units (UPT) in Bahodopi, Bahomotefe and Despot Lelee in Morowali regency, which was then still part of the regency of Poso.
Only recently it was learned the area had already been included in INCO's concession area, as spelled out in that 1968 contract between the company and the central government. The Central Sulawesi provincial administration tried to relocate the UPT residents to Saembawalati village, Bungku Tengah district in the same regency.
But most refused to be relocated because the new area was not suited to agriculture nor settlement.
INCO proffered Rp 11 billion (US$1 million) in relocation funds from its community development fund -- Rp 7 billion to prepare the land and Rp 4 billion to build supporting facilities.
However, the dispute is not only between INCO and the transmigrants. Farms belonging to Bahomotefe villagers were also included in the concession area, and those farmers have demanded the company pay compensation for their land.
"We will disrupt their operations if we're not compensated," said local elder Muchlis Thahir, 54.
Muchlis said INCO had been promising to pay residents' land for the past 18 years, but has failed to do so.
"They even promised to pay Rp 40 million to each transmigrant family, but it never happened," he said.
Residents have said they would hand over their land to another company, PT Haji Kalla, if they are not compensated.
It is reported that in the village of Bahomotefe, INCO has not yet compensated more than 100 families, each owning between 2 and 4 hectares.
Meanwhile farmers have stopped working their cashew farms because they thought compensation was at hand, despite the fact that annual yields could result in tons of harvest. Each kilogram of dried cashews sells at Rp 8,000 in today's wholesale market.
Despite the controversy, INCO continues to say it is helping out the community through its community development funds, reports of which INCO posts on its website, http://pt-inco.co.id. The reports state the firm has set aside US$1.5 million annually for community development programs and other contributions.
It also specifies 50 percent of the allocations would be used for education, 15 percent for healthcare and to support small-and medium-scale enterprises and the rest for basic infrastructure.
Residents tell a different tale. They say only some have benefited from the funds. They know, for instance, INCO provided assistance in the form of four hand-guided tillers to cacao farmers in Bahomotefe village.
Onepute Jaya village chief M. Jalam said the company only began disbursing its corporate responsibility funds this year distributing Rp 4 billion to 11 villages: Bahodopi, Bahomoahi, Bahomofete, Geresa, Kolona, Lalampu, Lelee, Onepute Jaya, Simbatu, Tampala and Ulumere.
Onepute Jaya residents were able to build a nursery school and buy weed killer and pesticides with their allocated Rp 240 million, said Jalam.
Separately, Central Sulawesi Governor Bandjela Paliudju has said his administration is responsible for the overlapping land ownership rights. He asked for the community's understanding and appealed to INCO to get involved in coming up with a solution to the problem.
After Bandjela assumed responsibility for the mistake and got his office involved, he asked the Morowali office of the National Land Agency (BPN) to issue land titles to the residents.
The BPN has so far issued 500 land certificates to 500 families in Onepute Jaya village, each family entitled to a 2-ha plot.
Despite the complications, INCO continues to make plans to mine for nickel in the Bahodopi block in Morowali, Central Sulawesi, and Pomala in Kendari, Southeast Sulawesi.
Company spokesperson Rajeshanagara S. told The Jakarta Post recently, "We are still exploring and analyzing the areas to ascertain nickel content and the best methods to employ in the mining."
The Tanah Merdeka Foundation (YTM) in Palu has taken up the social issues in the Bahodopi block. It has called for contract renegotiations between the government and the mining firm. It also suggested the local administration and the community should request a stake in the company. YTM director Muhammad Hamdin said shareholder status was crucial to ensure the local administration could be involved in policy making in all decisions the company might make.
He added the local administration would in that case also profit from company dividends, and not have to depend on the community development funds, benefits from which have been illusive for many.
