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Coal and curse of corruption
Investigators from the Corruption Eradication Commission (KPK) have a new multi-billion Rupiah corruption case to keep them busy over the next few months
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nvestigators from the Corruption Eradication Commission (KPK) have a new multi-billion Rupiah corruption case to keep them busy over the next few months. The latest case involves a House of Representatives member from the Golkar Party, a businessman, a local politician, the state-owned utility PLN and a mining company, BlackGold. Nine people have been arrested so far and Rp 500 million (nearly US$ 35,000) seized as evidence.
What lies at the center of this case is a power station with a bribe allegedly paid to the member of the House of Representatives to smooth the licensing process. This corruption is about coal, the fossil fuel that is not only poisoning Indonesia’s air, but is also poisoning our politics.
Coal business in Indonesia involves political-exposed persons comprised of former high-level officials — the so-called revolving door phenomena — or even those who are currently in power and their families.
National elites in collaboration with the local elites have been using their power for their private benefit in this sector. In turn, they use some amount of money from this chummy business to capture our politics that eventually undermine our democracy and do harm to the public. It is not astonishing that coal business is categorized as rent-seeking sector where the living is easy according to The Economist.
Because this is not a one-off case. In 2016 the KPK revoked the licenses of 721 mines in 12 provinces across the country — two-thirds of them coal mines. At the time, 4,000 illegal mines were under investigation. Last year, investigators targeted port operations along the coast of Samarinda in East Kalimantan after allegations of blackmail, corruption, money laundering and thuggery.
Coal in Indonesia is a dirty business. And not only in Indonesia. The allocation of coal blocks to private and public sector companies has grown into a major political scandal in India — with corruption at its heart. The latest case involves the allocation of a coal block in Jharkhand. The charge sheet against politicians, industrialists and others already covers criminal conspiracy, cheating and criminal break of trust. Two years ago, the Supreme Court of India canceled all but four of 218 coal blocks on the grounds that they were “illegal and arbitrary”.
In Australia, a former mining minister of New South Wales is serving a 10-year jail term for corruption over the awarding of a coal exploration license.
The authorities in Bangladesh last year uncovered a $55 million fraud involving a proposed coal-fired power plant. A senior port official is in jail for embezzlement.
In the European Union, police in Slovenia are currently investigating a $580 million overpayment for the upgrade of a coal-fired power station. Corruption in South Africa’s state-owned and coal-dependent utility, Eskom, has so undermined the company that it poses a risk to South Africa’s whole economy.
Those are just recent cases which are under investigation or have been prosecuted. Outnumbering them many times over are the instances of intimidation, deception, fraud and flagrant conflicts of interest among those in the coal industry.
The coal-fired power plant project has harmed the country by the loss of paying for excess capacity.
When President Joko “Jokowi” Widodo campaigned for election in 2014, he did so under the slogan “honest, clean and humble”. But Indonesian politics will never be clean while our energy supply remains wedded to coal.
When the Italian authorities began a nationwide judicial investigation into corruption in the 1990s, it was known as Manu Pulite or “Clean Hands”.
If Indonesia is to have Clean Hands, it must be free of the dirty fuel which is dragging down the country, corrupting our politics and our businesses, and poisoning our air.
Many oddities have been noted and reported in several other coal projects across the country. Coal-fired power plants in Java-Bali; for example the expansion of coal-fired power plants in Cirebon, Batang and Celukan Bawang-Bali; are experiencing cases in the field, ranging from massive community resistance, land conflicts, inappropriate regulations, health impacts and even public lawsuits in court.
Instead of corruption, the coal-fired power plant project has harmed the country by the loss of paying for excess capacity. It is not strange that the private sector gives a bribe because they are guaranteed by
the Power Purchase Agreement (PPA) to be paid regardless of anything that happens, so that the private sector does not bear any financial risk. There will be an additional 9-gigawatt coal-fired power plants project in the Java-Bali grid that will translate into billions of wasted dollars due to overcapacity.
Meanwhile, developing renewable energy will not only give us reliable, affordable electricity, but they will also deliver clean air. No longer would Indonesian business and politics be tied to the dirty influence of coal, with its price rises and falls.
The costs of renewable energy continue to plummet, making it competitive with coal with none of the pollution nor associated health costs. A renewable energy future is what Indonesia needs and deserves.
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The writer is regional climate and energy coordinator for Greenpeace Southeast Asia.
