Dirty Landlord in Sulawesi: What the Locals Think of Inco (fwd)

["M.G.G. Pillai" <pillai@mgg.pc.my>]

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Date: 11 Mar 2000 00:37:53
From: tapol@gn.apc.org
Reply-To: "Conference act.indonesia" <indonesia-act@igc.org>
To: Recipients of indonesia-act <indonesia-act@igc.org>
Subject: Dirty Landlord in Sulawesi: What the Locals Think of Inco

From: TAPOL <tapol@gn.apc.org>
Subject: Dirty Landlord in Sulawesi: What the Locals Think of Inco

Received from Joyo Indonesian News

Received on March 10 from: Gerry van Klinken, Editor, Inside Indonesia
The two articles below on Inco are from issue no.60 (October-December 1999) - 
full contents of which just became available on the web (see 
www.insideindonesia.org - recent editions).

Dirty landlord 

A huge nickel mine in Sulawesi is set to expand. What do the locals think?

Roger Moody
 
  Waving palms, golden beaches, coral reefs and rolling, azure-covered hills. 
Not a bad representation of the east coast of Central Sulawesi, along the 
Tolo Bay. But when you approach Bahomotefe, the trees get patchy, heavy rocks 
have been dumped in the ocean to make a rough port, and there's a two-lane 
dirt track, driven through the forest with precious little regard for what 
grew in its way. 

This is part of PT Inco's quarter million hectare lateritic nickel concession 
in southern Sulawesi. While Soroako became the site for both mine and 
smelter, Bahomotefe was always considered ripe for future exploitation. In 
1996, Inco concluded a contract with the Suharto regime running till 2025, 
committing the company to a C$1.5 billion investment to expand the Larona 
hydro scheme and increase nickel output by 50%. Bahomotefe, along with 
another major deposit at Pomalaa south of Soroako, could be under the 
bulldozers within a few years - and the local people expelled. 

PT Inco is a majority-owned subsidiary of the world's largest nickel miner, 
Inco of Canada. It's a company I've pursued for many years in my role as 
whistle blower on some of the world's most damaging mining outfits. Inco's 
Ontario smelters are the country's biggest single contributors to acid rain. 
In March 1999 I eagerly accepted an invitation from Yayasan Tanah Merdeka, an 
indigenous rights and environmental organisation based in Palu, Central 
Sulawesi, to perform a week-long investigation of the company's Indonesian 
operations. 

The indigenous Bungku who live in Bahomotefe have long had their own adat 
system. It qualifies anyone clearing the forest for cultivation to assume 
ownership, while those who plant trees on abandoned plots also gain title to 
the land. Bahomotefe residents cultivate rice, coconuts, and cashews, but 
also gather forest products (such as rattan), and they fish. There's no doubt 
in my mind that they are strongly opposed to being thrown off their land, and 
have little stomach for employment as mine labourers, even if Inco were to 
offer jobs. 

PT Inco has already ripped some 50,000 tonnes of ore from Bahomotefe from 
what are euphemistically called 'test pits'. The unsuspecting traveller comes 
suddenly upon open bore holes, 4 metres square, plunging to depths of 30 
metres. I would have fallen down one of these had my friends not forewarned 
me - it was in the middle of an area where locals are trying to grow 
jambomente nuts. Last year, in response to community complaints, Inco said it 
would fill in the pits and fence off these holes - and that's the last the 
people have heard of it. 

I also visited some of the Javanese and Balinese transmigrants at nearby One 
Putih Jaya. They had arrived six years back and were allocated a miserly 1000 
hectares of land to grow rice (just over 2 hectares for each of their 450 
families). One Putih Jaya is fairly fertile. Many transmigrants now identify 
the settlement as home - as evidenced by the profusion of flowers planted 
around carefully-kept lawns. They told me at a meeting they would only move 
if properly compensated. 

Unfortunately, a resettlement area set aside for them at Soembalawati, 100 
kilometres to the north, is principally a stretch of barren plains and 
commercial palm oil plantations. The only tract suitable for paddy rice is a 
vast swamp. An engineer on-site informed me that this might be drained, but 
only at the expense of emptying the nearby lake. And that would put paid to 
fresh water supplies for the district town of Tomata. 

The newly 'constructed' camp at Soembalawati, in which One Putih Jaya 
residents would be dumped, sits on the crest of a windswept hill, evoking 
those indelible 1970s images of Soweto and the apartheid bantustans of South 
Africa. Each hollow shell of a wooden house looked as if it had been erected 
in a day by a band of indifferent, ill-paid labourers. The moment I placed my 
feet inside the doors, the entire edifice shook. It was an insult for the 
governor to claim that these shacks were substitutes for the lovingly tended 
homes I had seen in One Putih Jaya a week before. 

Inco also faces demands from provincial and district governments for a slice 
of the royalties cake that has so far gone only to Jakarta. Last year, the 
provincial governor of Southeast Sulawesi (site of PT Inco's putative 70,000 
hectare Pomalaa extension project) told the company to clear off, unless it 
began negotiations over direct payments to the province. Under Suharto's iron 
rule, such claims couldn't be entertained. Now they are escalating. 

Last year, the world's biggest mining company, Rio Tinto, was forced to 
re-negotiate its own derisory 'agreement', made in the early nineties to 
compensate indigenous communities for the theft of land and natural resources 
by its Kelian gold operations in East Kalimantan. This followed a concerted 
campaign. A representative of the Dayak communities around Kelian visited Rio 
Tinto's 1998 annual general meeting in London. The idea of 'doing a Rio 
Tinto' on Inco in Canada appeals to the people in Bahomotefe. 

Choking 

Moving south to Soroako, I recalled the words of Kathryn Robinson, who toured 
PT Inco's imperial domain in 1985: 'Strip mining... induced the clayey soil 
from the hills to wash into the lake when it rained. Streams that once ran 
clear had become yellow' (Stepchildren of progress, 1986). Six years later 
the Jakarta Post recorded how dust from the nickel smelter was choking 
Soroako town. True, Inco had launched a US$60 million dust reduction 
programme. But according to PT Inco's then-president it would take 'another 
five years' - by the end of 1996. When I asked him for the completion date, 
one employee responsible for part of the plant shrugged: 'None has been 
fixed'. 

Inco admits that emission standards during Soroako's first fifteen years were 
below par - claiming they were based on those current in Canada at the time. 
However, the upgrade and monitoring programme approved in 1992 was geared to 
Indonesian, not the lower Canadian limits. The most important part of the 
revised environmental management and monitoring plan was the retro-fitting of 
electrostatic precipitators (ESP) to the kiln exhausts, aimed at capturing 
emissions. 

Set on the crest of the main Soroako site, the stacks belch out their plumes 
by day and night, in streams of weirdly shifting colours. Several of the 
chimneys seem to be staggering on their last legs. As high as a five storey 
building, they spread most of their outfall within a few kilometres of the 
plant. Some is cast much wider. A walk through the brush and across part of 
the reclamation area reveals blankets of dust upon what's left of the 
vegetation. A local guide took me to a clove plantation 10 kilometres from 
the smelting complex. There I plainly detected the 'crowns' on upper 
branches, the ragged mis-shaping of leaves, and sickly patches on the bark, 
characteristic of forests ravaged by decades of industrial pollution. 

I asked Soroakan residents at special meetings if they had noticed a 
deterioration in the quality of air the past few years. 'Yes', one told me. 
'The roofs of our houses are decaying. Before Inco came we could use them for 
many years. Now, after five or six years, they go rusty and need replacing. 
We suffer continual bouts of flu, colds and asthma - particularly our 
children. But when we go to the (company-run) health centre, we're simply 
told "it's not a big problem", and given some pills.' 

In theory, the company has long been rehabilitating mined-out areas by 
re-seeding them. In practice much of this is a sham. The galloping 
exploitation of the past two years is clearly outstripping Inco's ability (or 
inclination) to rehabilitate land which had a precarious fertility in the 
first place, and many of whose nutrients have been washed away after the 
removal of forest cover. I predict that the scars on Soroako's surrounds will 
never completely heal. Soroako is the second cheapest source of nickel in the 
world and reaped considerable profits for north American investors. Who had 
paid the real costs of this massive enterprise? 

Early in 1999, in the wake of 'reformasi', indigenous Soroakans felt 
emboldened to remind the company and government that undertakings given 
thirty years before, of proper compensation, health care and other benefits, 
had not been honoured. A copy of the 1973 agreement was found (apparently in 
company archives) dusted down and re-presented. On January 25th a 
demonstration by Soroakans was met more sympathetically than its forerunner 
had been in 1974. The day afterwards, the Canadian ambassador turned up at 
Soroako, and Inco re-opened the long-stalled negotiating process. 

But this wasn't to last long. As I was leaving Soroako, PT Inco suddenly 
aborted a meeting between the company and residents. In the weeks since, no 
further meetings were proposed. Inco has nothing to lose by procrastination, 
and a lot to gain. Like other Indonesian miners, the company doesn't want to 
start negotiating a hefty benefits and compensation agreement until the terms 
of new Indonesian mining legislation are known. 

Nickel prices bottomed-out last year, and has yet to significantly recover. 
Expensive commitments elsewhere New Caledonia and especially Voisey's Bay in 
Labrador, eastern Canada mean Inco will need to cut back on its outlays in 
Indonesia to boost its parlous cash flows. 

The legendary 'Big Nickel' is trapped in a cleft stick. If the company's 
board in King Street, Toronto, or its underlings in Indonesia, think they can 
sail through the next 25 years as unscathed, unhindered and as cheaply as 
they have through the last, then they are baying at the moon. 

Roger Moody (partizans@gn.apc.org) is research coordinator for Minewatch 
Asia-Pacific (MWAP), which has offices in Britain and the Philippines and 
assists community organisations concerned about mining impacts. MWAP is 
planning to assist residents of Bahomotefe and Soroako to visit Canada in 
early 2000, to meet with the Innu Nation in Labrador and community leaders at 
Inco's operations in Ontario. Further details: tongtong@gn.apc.org. Thanks to 
Yayasan Tanah Merdeka (hinoe@palu.wasantara.net.id).
 
-----------------

Revisiting Inco 

For this Sulawesi nickel miner, reformasi means more pressure from the people

Kathryn Robinson
 
  Freeport McMoRan mine in Irian Jaya has been the site of ongoing human 
rights abuses. Less well known is the next major mining project off the rank 
during the New Order: the Soroako nickel project in South Sulawesi. 
Exploration began in this region in the late 1960s, not long after the 
government had pacified a regional rebellion (Darul Islam), which had kept 
rural areas out of government control for 15 years. The people of Soroako had 
barely returned from their refugee camps on the other side of Lake Matano 
when the exploration teams arrived. 

The people welcomed them, and the company officials who came in their wake 
when production started in 1978. Investment by the International Nickel 
Company (Inco) reached US$850 million, and at a hundred million pounds of 
nickel matte a year, its smelter was the world's largest. As the owners of 
the land, they assumed they would benefit from the mine. 

Their hopes were not realised. In the manner common to New Order projects, 
the people were forced to relinquish their land without adequate 
compensation. The Soroakans had no choice but to give up their agricultural 
land. Yet the government thought of it as a land sale at market prices. It 
set aside about US$100,000 for a community of a thousand. The landowners 
resisted taking the money. With the help of the Legal Aid Institute (LBH) 
they struggled to have the amount increased. In the meantime, much of the 
money was stolen or given to false claimants by government officials. The 
company's contract of work, negotiated with the central government, meanwhile 
sent the main revenues to Jakarta. 

Well-paying permanent jobs, with the best houses, health care and schooling, 
went mainly to outsiders. Soroakans blamed their own lack of education, and 
enthusiastically embraced schooling for their children. Many young men left 
the village to further their education. PT Inco initially limited access to 
its schools to company employees. The book I published in 1986 dealt with the 
early phase of the project. Its title, Stepchildren of progress, reflected a 
view expressed by the people. 'We are given the bones while others eat the 
meat', they told me. 

The later years of the New Order saw a large number of new non-government 
organisations (NGOs), which now have more freedom to operate. In 1996, PT 
Inco negotiated an extension of its contract of work to the year 2025. In a 
new political climate, the company is expanding production in Soroako, and 
developing a new work site in Central Sulawesi at Bahudopi/ Bahomotefe. 

Reformasi 

I revisited Soroako in November 1998, and was interested in the effects of 
reformasi. Soroako is an affluent community. South Sulawesi's reliance on 
export crops cushioned it generally from the effects of the monetary crisis. 
Cocoa farmers received massive increases in rupiah returns, because world 
market prices are in dollars. The mining company and many of its contractors 
increased salaries paid in rupiah. 

Soroako village nestles picturesquely on the shores of Lake Matano, looking 
across to the mountains of Central Sulawesi. It has many very fine houses, 
and hotels and restaurants. However, the tarred road stops at the edge of the 
village. The company has devolved many activities to local contractors, 
keeping only a small permanent work force of about 2000. The prize of a 
permanent well-paying job is still elusive for Soroakans. Scores of young 
people now possess degrees, but it has not done them much good. A company 
magazine I saw had a photo of 'second generation Inco employees', and only 
one was an indigenous Soroakan. Most locals work (if at all) for the local 
contractors, or else in the agricultural and informal sector. Young women 
have particular difficulty in getting work appropriate to their 
qualifications. 

Women have a difficult time. Most jobs with the local contractors are for 
men. Several young women with college degrees were about to begin work 
helping an older woman in a canteen franchise. It beat staying at home 
earning nothing! 

The wooden house where I lived in the 1970s had been demolished and replaced 
with an urban-style single storey brick house. But just a few doors away, the 
house of a farming family remained exactly as it had been: a simple unpainted 
wooden house, the doors and windows all shut because the owners were away at 
their distant farms. The landlocked village, limited in its possibility for 
expansion through the company's forced acquisition of land, had grown out 
into the lake. Kinsmen from a village across the lake had built a 'village on 
the water' to avoid impossibly high land prices. The north west end of the 
village abuts the company-owned golf course. In the era of reformasi, the 
company has allowed local farmers to cultivate land fringing the golf course. 
Inco are providing funds to farmers' groups in Soroako and two other 
locations. In Soroako, the members are mainly widows, with no other source of 
income. They grow vegetables for local sale. 

Late last year the president of PT Inco was called before the regional 
parliament to answer questions about benefits for the province. This was at 
the same time as the governor of Irian Jaya was claiming more local access to 
Freeport revenues. Like people around the Freeport mine, the Soroakan people 
have recently asked to reopen the land negotiations. I had asked them last 
year if they intended to do this, but at that time they said they were 'not 
brave' because they remembered how the army had forced them to accept the 
inadequate amounts in the 1970s. 

The expanding activities of Inco have attracted the attention of 
non-government organisations, something that was not possible in the 1970s. 
Their new activities in Central Sulawesi are also closely monitored by local 
NGOs. Whereas the protests of the Soroakans over issues such as the removal 
of their ancestors graves went unremarked in the world at large, there has 
been consistent press coverage of the disputes associated with the 
development in Bahudopi/ Bahomotefe, with a few encouraging results. 

Kathryn Robinson (kmr@coombs.anu.edu.au) is an anthropologist at the 
Australian National University, Canberra. 

 

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TAPOL, the Indonesia Human Rights Campaign
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Surrey CR7 8HW, UK
Phone: 0181 771-2904   Fax: 0181 653-0322
email: tapol@gn.apc.org
Internet: www.gn.apc.org/tapol
Campaigning to expose human rights violations in
Indonesia, East Timor, West Papua and Aceh

26 years - and still going strong 
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