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Jakarta Post

Corruption in resources sector in Indonesia may worsen climate crisis

  • Moch. Fiqih Prawira Adjie

    The Jakarta Post

Jakarta   /   Fri, July 17, 2020   /   09:02 pm
Corruption in resources sector in Indonesia may worsen climate crisis A stock image shows the immediate aftermath of deforestation, which can cause further environmental damage through disasters, biodiversity loss and climate change, as well as economic losses. (Shutterstock/Rich Carey)

Long-standing corruption in the natural resources sector could worsen the climate crisis and hurt the country's efforts in mitigating it and adapting to the ensuing changes, an anticorruption activist has said.

Indonesia Corruption Watch (ICW) researcher Egi Primayogha said that widespread corruption in the uncontrolled exploitation of natural resources could lead to greater use of dirty energy through burning coal as well as greater environmental damage, such as deforestation.

"This will hamper our transition to renewable energy sources," Egi said at a discussion on Tuesday.

Indonesia has been working to reduce deforestation in the remaining tracts of tropical rainforest. 

Tropical rainforests are important natural "lungs" that adsorb and store carbon and other greenhouse gases that are responsible for the planet's increasing temperature.

The country is also moving toward the increased use of renewable energies and phasing out fossil fuels.

Read also: Indonesia likely to miss renewable energy target – again

Egi added that natural resource management in the country was still prone to graft in many areas, in particular licensing, spatial planning and monitoring corporate adherence to environmental regulations.

He highlighted that bribery was still rampant in licensing, with companies bribing regional leaders with the authority to issue business permits for natural resource exploration and exploitation.

Supian Hadi, the regent of East Kotawaringin in Central Kalimantan, was named as a corruption suspect in early 2019 for alleged abuse of power in issuing business licenses to three mining companies in 2010-2012. The Corruption Eradication Commission (KPK) estimated that the bribery case had caused state losses of more than Rp 5.8 trillion (US$402 million) in revenue from bauxite production, as well as from the environmental damage caused by mining activities.

Graft has also marred spatial planning in natural resource management, with companies bribing officials to illicitly convert forests into mines or plantations.

For example, the KPK prosecuted former Riau governor Annas Maamun for accepting over Rp 1.5 billion in bribes from companies that converted forest areas in three regencies into oil palm plantations. Annas was sentenced to seven years in prison in 2015, but was granted clemency by President Joko "Jokowi" Widodo in November 2019. The graft reportedly caused Rp 5 billion in state losses.

Egi continued that corruption had also contributed to the poor monitoring of businesses' environmental responsibilities, such as mine reclamation, as well as losses to the state from unpaid taxes, royalties and other tariffs.

Read also: Omnibus bill to centralize permit processing, offer incentives for miners

Mining companies are mandated under a 2010 government regulation on mine reclamation to submit their environmental restoration plan when they apply for the mining permit.

The latest research by the Mining Advocacy Network (Jatam) shows that at least 3,092 open-pit mines had not been reclaimed as of April. Jatam also estimated that at least 143 people, mostly children, had been killed in accidents linked to mining pits.

"There is a problem with weak supervision due to the lack of will among law enforcers and officials in [conducting] surveillance. We suspect collusion between mining companies and officials," said Egi.

The recent political move by the House of Representative in passing the revised Mining Law had also benefited mining companies, he said. Egi pointed to Article 169A of the revised law, which he said allowed miners to resume operations at their mining concessions under a special mining permit (IUPK) instead of a contract of work.

The revision would also allow seven coal miners that are subsidiaries of large conglomerates to extend their mining contracts, meaning that coal production would continue despite the country's target to achieve a 23 percent renewable energy mix by 2025.

Read also: KPK shows ‘lack of willingness’ to fight corruption in natural resources sector: Activists

KPK deputy chair Lili Pintauli Siregar asserted the antigraft body's commitment in eradicating corruption in the natural resources sector through its National Movement to Save Natural Resources (GNP-SDA), which had been producing research-based policy recommendations since it launched the initiative in 2009.

"The KPK is pushing all state institutions to improve the [natural resource management] system. We are also committed to developing cases and recovering more assets through the work of our task forces on natural resource and asset recovery," she said.