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Jakarta Post

Selling their nickel for a dime

  • Shelley Marshall and Omar Pidani

    The Jakarta Post

Melbourne, Australia   /   Tue, October 29, 2013   /  11:45 am

Communities on stunning Halmahera Island in North Maluku that have acted as the custodians for biodiversity for generations are being economically displaced for a nickel mine. A recent report reveals that they have been failed by weak legal enforcement processes and international human rights mechanisms, despite national and international laws that should protect them.

Halmahera Island is the site of spectacular natural beauty and biodiversity, and it is also the arena for an unfolding social tragedy. Extensive blocks of habitat still cover the island, and around 80 percent is still primary forest.

It was here in 1858 that the British naturalist Alfred Russel Wallace famously wrote to Charles Darwin, outlining his ideas on the development of new species.

The correspondence led to their eventual co-publishing of the theory of natural selection. The island is mainly inhabited by different indigenous groups who have maintained the island'€™s astounding biodiversity from before the time of Wallace'€™s famous discovery till now.

Just recently two new species were discovered on this beautiful tropical island.

As demand for electric cars and other devices that use rechargeable batteries, like smart phones, increases, so does the demand for nickel.

Indeed nickel use is growing at about 4 percent annually. Halmahera holds one of the largest deposits of nickel in the world and mining companies are braying to get their hands on it.

Though PT Weda Bay Nickel Mine, majority-owned by French mining company Eramet, is only in the exploration and building phase, agreements have already been made with local ethnic Sawai communities to give up their farming land.

This fertile and mineral-rich land has been compensated at a rate of less than 80 US cents per square meter.

The mining company and local government told the Sawai communities it was a good deal and because these subsistence farmers have little experience with cash, many accepted it. The National Commission on Human Rights (Komnas HAM) has reported that those who hesitated to sign were pressured by gun-wielding members of the police'€™s Mobile Brigade (Brimob) to do so promptly.

And yet, a handful of community members are still bravely refusing to sign agreements that would result in permanent loss of their customary rights over the forest.

They have been custodians of this land for generations, using sustainable farming and foraging methods. They can see that they will end up as landless poor, forced to join millions of others in bloated cities like Jakarta in search of unskilled laboring work, as their compensation quickly runs out.

Some community members have already spent their entire compensation on items like new motorbikes, leaving them with no source of livelihood unless they are employed by the mining company.

Recently, researchers from three Australian universities have released a report which confirms Komnas HAM'€™s findings of intimidation and pressure, and lists a large number of other breaches of Indonesian laws and international norms (see

It shows that the Sawai communities were not properly consulted and did not give their consent freely, as is required. No one interviewed for the research even had a copy of the agreement they had signed or knew what rights they had given up.

The report also reveals the distressing story of the communities being let down by local law enforcement and international redress mechanisms. Komnas HAM'€™s findings and recommendations have been largely ignored by the Indonesian government and the commission lacks enforcement powers.

Aggrieved community members lodged a complaint with the World Bank'€™s well-regarded ombudsman because the mining project is being guaranteed by the Bank'€™s Multilateral Investment Guarantee Agency.

But the ombudsman was unable to help resolve the case because community members were afraid they would be identified and further harassed if they proceeded tomediation.

The good news is that it is not too late for PT Weda Bay Nickel to begin fresh negotiations with local communities in a way that upholds the company'€™s stated respect for international norms and their customary rights. Major investment decisions, including the World Bank'€™s final decision whether to guarantee the next stage of the mine, will be made some time in the coming months.

The World Bank'€™s ombudsman can return and find a safe way to offer mediation which guarantees the security of community members or conduct an audit.

The major shareholder in the mine, the French mining giant Eramet, still has time to ensure its subsidiary operations meet international standards and demonstrate that it can conduct business in a way that respects human rights, local cultures and communities.

In the meantime, existing agreements with affected community members can be revoked, and more just agreements made which allow for ongoing customary rights to the land and a range of other benefit-sharing agreements.

Alternative farming land can also be offered and community-managed development trust funds can be set up, as is required by international norms. There is still time to act before mining begins and irrevocable damage occurs for these vulnerable communities.

Following a recent constitutional court decision, Indonesian law is now firmly on the side of the Sawai communities. It remains to be seen if it is applied in a way that might allay some of our guilt over the sourcing of nickel for our precious hand-held devices and stainless steel kitchens.


Shelley Marshall is a senior lecturer at the department of business law and taxation, the Faculty of Business and Economics at Monash University. Omar Pidani is undertaking a Phd at the Australian National University with a scholarship from the Indonesian Endowment Fund for Education (LPDP).

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