"Indonesia: Captive power plant operations in several Chinese-invested nickel industry parks damage ecology and people's lives on Sulawesi Island" 13 June 2023

[Informal translation provided by BHRRC]

Press Release

Aliansi Sulawesi Terbarukan

Eksekutif Daerah Walhi Sulawesi Tengah

Eksekutif Daerah Walhi Sulawesi Selatan

Eksekutif Daerah Walhi Sulawesi Tenggara

Background

Data from the Ministry of Energy and Mineral Resources (ESDM) in 2020 shows that the total balance of Indonesia's nickel ore resources reached 11.88 billion tonnes, and 90 percent of nickel reserves were distributed in Central Sulawesi, South Sulawesi, Southeast Sulawesi and North Maluku...

According to the Presidential Regulation of the Republic of Indonesia No. 3 of 2016 on Accelerating the Implementation of National Strategic Projects (PSN) and the Regulation of the Coordinating Minister for Economic Affairs of the Republic of Indonesia No. 7 of 2021 on Amendments to the PSN List, there are 208 projects and 10 PSN programmes for 2020-2024, industrial estates in Morowalli and North Morowali Central Sulawesi, Bantaeng South Sulawesi and Konawe Southeast Sulawesi.

Article 1(7) of Law No. 4 of 2009 on Mineral and Coal Mining states that a Mining Business Permit (IUP) is a permit granted to carry out mining business… Article 6 of Government Regulation No. 23/2010 on the Implementation of Mineral and Coal Mining Business Activities stipulates that IUP is granted by the Minister, Governor or Regent/Mayor in accordance with their authority…

Central Sulawesi

In North Morowali there is an industrial area of PT Virtue Dragon Nickel Industri (VDNI), in this area there are PT Gunbuster Nickel Industri (GNI) with an area of 1,907 hectares and PT Central Omega Resources (COR).

GNI and COR are 2 nickel refining smelters owned by Jiangsu Delong Nickel Industry Co.Ltd, a Chinese investor operating in Bunta Village, East Petasia District, North Morowali Regency…

In order to relocate the smelter, GNI, while building a 712.80-hectare captive coal-fired power plant (PLTU), dammed the Lampi River without the knowledge of the residents and landowners around the river, which at this time of year, when it rains, overflows and floods rice fields and settlements; not only that, the air in Hamlet 5 of Bunta Village is said to be filled with sulphur dioxide (So2), a toxic gas from the burning of captive PLTU coal.

In 2023, Tanauge Village, a coastal village in Petasia Subdistrict, very close to the site of PT GNI's activities, had built a jetty, the entry point for the mobilisation of coal supplies, which allegedly confiscated 65 hectares of residents' land for the expansion of the jetty without any compensation process… the fishermen, who are the majority occupation in this village, have had to suffer from the massive mobilisation of coal-laden barges, which has caused the fishermen to stop catching fish amidst increasingly polluted seawater conditions due to frequent coal spills, and the strict surveillance of the Air Water Police is a frightening spectre for the fishermen.

…PT GNI has built 3 units of captive coal-fired power plants in Tanauge village with a capacity of 300 Mw. This PLTU is only about 500 metres from the residents' settlements, as a result the residents

around the PLTU have to be more active in closing the doors and windows of the house to avoid the black dust from the burning of the coal owned by PT GNI…

South Sulawesi

Bantaeng Industrial Estate (KIBA) began with the enactment of Bantaeng Regional Regulation No. 2 of 2012 on the Regional Spatial Plan of Bantaeng Regency Year 2012-2032. Pa'jukukang sub-district was designated as a large industrial area with an area of 3,128 ha.

KIBA is also designated as a National Strategic Project (PSN)… Based on data from the Bantaeng Regency Investment and PTSP Office from 2010 to 2017, there were 13 companies with different business areas.

PT Huadi Nickel-Alloy Indonesia (HNI) is a nickel processing and refining company operating in KIBA with an area of 100 ha. The capacity of HNI's large furnace for Phase 1 is 16,500 KVA with a total investment value of USD 80 million. HNI's industrial activities of refining nickel ore into ferronickel have had various social, environmental and health impacts on the community.

The huge demand for land has led to the loss of community land and gardens, and the impact of land loss has limited access to livestock...

Another impact of HNI is the pollution of rivers, coastlines and the sea, which affects the livelihoods of fishermen and seaweed farmers.

According to an investigation report by Walhi South Sulawesi, HNI's nickel processing activities have caused severe pollution in the Balla' Tinggia River and the coastal seas of Papanloe and Baruga villages. The heavy metal contamination of hexavalent chromium from HNI's factory effluent has exceeded environmental quality standards. Based on the test results of 8 sample points, 2 sample points were found to have high levels of hexavalent chromium, as much as >1 mg/L (ppm) in the water body of the Balla' Tinggia River, which flows into the sea.

Water pollution has also affected the coastal communities of Pa'jukukang sub-district. Symptoms that have emerged since the factory's presence have led to a tendency for itching and skin irritation among seaweed farmers and fishermen who work in these waters...

The HNI factory's 24-hour production activities produce hot air, dust, smoke and odours in addition to nickel products. It has been almost six years since the local community, especially the people of Papan Loe village, have directly felt the air pollution caused by HNI...

Since the presence of HNI, the community has also faced the problem of well dryness. The only source of water for their basic needs, wells, has dried up...

According to the AMDAL, KIBA is expected to increase its operations from 2019 to 2037. By 2023, KIBA's projected production will reach 900,000 tonnes/year.

Southeast Sulawesi

... One of the companies using dirty coal energy to meet its electricity needs is PT Virtue Dragon Nickel Industri (VDNI) and PT Obsidian Stainless Stell (OSS), located in the Morosi Industrial Estate, Konawe Regency, Southeast Sulawesi.

PT VDNI started operations in 2014 and built a refining plant in 2017, which was officially commissioned in 2019 ..... To support its operations, VDNI also built eight coal-fired power plants with a total capacity of 530 MW and the capacity to consume 180,000 tonnes of coal per year.

... Based on the results of the Walhi Sultra team's field interviews with the Morosi community, the continuous burning of coal leaves black ash that mixes with the air and spreads over the community's farmland....

PT Obsidian Stainless Stell (OSS), located in the village of Tani Indah, Konawe Regency, is considered one of Asia's leading refining companies. The company started construction in 2015 and commenced operations in 2018. To support its operations, PT OSS built a power plant with a capacity of 1,820 MW, which caused environmental pollution around the company's location...

According to data collected by Walhi Sultra, the company has contributed significantly to the destruction of ponds in Labota village, Tani Indah, Lilimbue and Kapoiala Baru since it began operations...

In addition to the communities in Konawe Regency, the activities of PT OSS also affect the people of North Konawe Regency. Especially in the villages of Morosi and Lambuluo.

For the above conditions, the Aliansi Sulawesi Terbarukan have the following demands:

1. Stop the operation of captive PLTU using coal in all nickel industrial areas in Central Sulawesi, South Sulawesi and Southeast Sulawesi.
2. Immediately restore the state of environmental damage around the nickel industrial area in Central Sulawesi, South Sulawesi and Southeast Sulawesi.
3. Immediately provide compensation to farmers, fishermen and people living around the nickel industrial area in Central Sulawesi, South Sulawesi and Southeast Sulawesi.