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Jakarta Post

Concerns rise over government’s handling of mining footprint

  • Stefanno Reinard Sulaiman

    The Jakarta Post

Jakarta   /   Mon, February 18, 2019   /   02:28 pm
Concerns rise over government’s handling of mining footprint Heavy equipment and trucks pass through a coal mining site in East Kalimantan. (Antara/Wahyu Putro A)

Last December, East Kalimantan Governor Isran Noor was criticized for dismissing offhand the possibility that a landslide in the province’s Kutai Kartanegara regency was the result of coal-mining activities that damaged roads and houses.

Local media reported at the time that Isran insisted that the coal mining operations had nothing to do with the landslide, even though the mining took place only a few hundred meters from the landslide area.

“The distance [from the landslide to the impacted road and houses] is far; [the landslide did not happen] because of mining activities. The distance is about 200 meters,” he said as quoted by news reports two days after the incident.

However, a week later, the East Kalimantan Energy and Mineral Resources Agency found that the mine had been too close to the road. The agency then slapped a penalty on the mining firm, PT Adimitra Baratama Nusantara (ABN). 

The governor’s statement about 200 m being a “safe distance” contradicts the requirement that a mining site should be at least 500 m away from residential areas, as stipulated in Environment and Forestry Ministry Regulation No. 4/2012 on environmental indicators for miners.

The Kutai Kartanegara landslide was one of many accidents believed to be related to mining activities.

According to local NGO Mining Advocacy Network (Jatam), at least 30 people died after falling into abandoned former coal mines in the past eight years.

The requirement of mine reclamation for inactive coal mines is stipulated in Energy and Mineral Resources Ministery Regulation No. 26/2018 on good governance and supervision of mining operations, which threatens administrative penalties ranging from a warning to permit revocation for violations.

Data from the ministry show that, as of June 2018, only 60 percent of all mining companies with coal mining permits (IUPs) had paid mine reclamation funds to the government.

“Business players’ compliance with rules to implement [mine] reclamation measures and conduct post-mining management is very low,” said Publish What You Pay (PWYP) Indonesia, a civil society organization for the extractive industries, in its latest report on coal mining.

Bambang Gatot Ariyono, director general of mineral and coal at the Energy and Mineral Resources Ministry, acknowledged that miners were only paying a small amount of reclamation funds. He blamed regional administrations for being lenient, even though they had the full authority to supervise mining companies in their regions.

“I’ve warned the mining firms that the environmental aspect is becoming critical and sensitive. [….]. We have also urged regional administrations to require better mitigation actions, like putting up warning signs at inactive coal mines,” he said.

As of January, 539 of a total 3,384 mineral and coal miners had failed to obtain the ‘clean and clear’ (CnC) status, which declares that a company has complied with all permit requirements, including those related to environmental aspects.

Several miners without the CnC status still ran operations, as the related regional administrations had yet to revoke their working permits for fear of being sued, Bambang of the ministry revealed.

“Those kinds of permits should be cancelled, including the expired permits,” he said.

However, he said that not all inactive mines should be restored to a natural state, as several of them still had some economic value.

According to government data, the area for planned mine reclamation totalled 6,950 hectares in December 2018, 0.7 percent higher than the initial goal. However, the ministry did not disclose the number of coal mines that should be reclaimed.

Bambang mentioned a lack of budget funds as part of the problem as to why local administrations were lenient in tightening the supervision, which was done through regional mining inspectors.

At least 1000 mining inspectors are assigned across the country under the authority of the central government, which in this matter is the Energy and Mineral Resources Ministry.

Bisman Bakhtiar, executive director of the Center for Energy and Mining Law (Pushep), concurred with Bambang on the supervision issue, saying weak mining inspections were a problem still overlooked by the central government.

“Our mining inspectors are still insufficient in terms of quantity, capacity and equipment,” he told The Jakarta Post. “Therefore, I can say that the massive economic benefit from the mining sector is still not enough to cover the environmental damage it creates.”

The extractive industries, including mineral and coal mining, are a major contributor to state revenue and exports, which are crucial for the government to maintain a healthy trade balance.

Throughout 2018, nontax revenue (PNBP) from mineral and coal mining contributed Rp 50.1 trillion (US$3.55 billion), or 12.2 percent, to the overall nontax revenue of Rp 407.1 trillion. 

Yet, like a two-edged sword, the country’s economic dependency on the extractive industries and strong political connections in the sector have made the government generous and lenient with the companies’ operations, said Jakarta-based energy expert Fabby Tumiwa. 

“The coal industry has strong ties with our political system, both at the regional and top level. Some coal mine owners are even state officials themselves,” said Fabby, who is also the executive director of the Institute for Essential Services Reform (IESR). 

At the end of 2018, a coalition of NGOs named #BersihkanIndonesia, or “Cleaning Up Indonesia”, published a study titled Coalruption, which reveals politically-exposed persons (PEPs) in the coal industry.

“Large capital, close links with regulators, royalties and taxes as well as a dependence on state infrastructure to market the coal render the [mining sector] prone to political corruption, such as in the form of trading influence or abuse of authority,” said the coalition in its report.