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The Catastrophe Behind Jokowi’s Investment Invitation to European Companies

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President Jokowi’s ambition to make Indonesia a big player in electric vehicles is a big threat to the safety of citizens and the environment in the Sulawesi and Maluku Islands, to West Papua. Furthermore, the accelerated production of electric vehicles will also trigger an expansion in the demolition of coal-rich islands, such as Kalimantan.

As is known, President Jokowi has held a business meeting with three giant companies from Europe, starting from BASF, Eramet, to Volkswagen on Sunday, April 16, 2023, German time.

BASF—a company engaged in the chemical sector, will partner with a French multinational mining and metallurgical company, Eramet, to build a factory in favor of raw materials for electric batteries in Central Halmahera, North Maluku.

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Meanwhile, Volkswagen through its subsidiary, PowerCo, will invest by collaborating with PT Vale Indonesia (INCO), US car manufacturer Ford Motor Co, and Zheijiang Huayou Cobalt from China to build an electric vehicle battery ecosystem in South Sulawesi. In addition, PowerCo will invest with other portfolios together with Eramet and Kalla Group for the development of the electric vehicle ecosystem, as well as working with Merdeka Copper (MDKA) for a nickel downstream project into electric batteries.

Eramet’s Awful Footprints in Central Halmahera

The investment plan from BASF, which cooperates with Eramet, with an investment value of up to US$ 2.6 billion (Rp 38.39 trillion) to build an electric vehicle battery industry in North Maluku. In addition, BASF and Eramet claim to implement industrial practices that pay attention to ESG (Environment, Social and Governance) aspects.

In fact, instead of implementing ESG in its operations, Eramet itself has a dirty footprint in its investment in Indonesia, particularly in nickel mining and smelters.

Since 2006, Eramet acquired PT. Weda Bay Nikel (WBN) and started exploring in the Weda Bay area, Central Halmahera Regency, North Maluku, in collaboration with PT. ANTAM. In 2008, Weda Bay Nickel began acquiring community land at a price of only Rp. 2,500 to Rp. 9,000 per square meter. During the land acquisition process, PT. IWIP field officers were suspected of frequently manipulating the land area of residents to reduce costs from the company.

Until 2017, Eramet collaborated with Tsingshan Group from China to form a joint company PT. Indonesia Weda Bay Industrial Park (IWIP) to manage nickel mining and processing in Weda Bay.

The process of land grabbing for the development of the PT. IWIP industrial area is also going fast, out of control. Residents’ lands in Lelilef Sawai Village and Gemaf Village, which were full of nutmeg, clove, coconut and langsa crops, were confiscated by the company. Residents who refused to have their land released were intimidated and criminalized, one of which was experienced by Hernemus, a resident of Lelilef Sawai who was jailed for a year in 2013. Hernemus was accused of making threats against company employees who carried out land grabbing.

IWIP’s activities have also polluted four rivers which are the main water sources for residents, namely Ake Wosia, Ake Sake, Seslewe Sini and Kobe. The same goes for the coastal and marine areas that were destroyed by PT. IWIP’s activities. The dam where PT. IWIP’s B3 waste was stored in Lelilef Village, Weda Tengah District, burst and allegedly spilled into the sea on January 30 2022. In addition, Lolaro sea waters, near PT. IWIP area, one of the fishermen’s fishing areas, since the operation of PT. IWIP, fisherwomen are experiencing difficulties due to diminishing fish because mining waste from land clearing pollutes the sea.

WBN’s mining activities in forest areas are also a cause of flooding which keeps recurring every year. The worst thing happened on September 8, 2021, a major flood submerged the houses of residents in Lelilef Woebulen and Trans Kobe in Central Weda District.

Expansion of the mining area by PT. WBN has also exiled the indigenous people group O’hongana Manyawa or Tobelo Dalam. One of them occurred in Ake Jira, a forest that is home and sacred to Tobelo Dalam, which was annexed by a company to expand the nickel demolition area.

Vale’s Awful Footprint in South Sulawesi

In the meantime, Volkswagen through PowerCo will invest in the construction of a nickel smelter with High Pressure Acid Leaching (HPAL) technology in South Sulawesi for the production of electric vehicle battery components. PowerCo will cooperate with PT. Vale Indonesia, Ford and Huayou Group from China. Of course, this investment cannot be separated from the dirty footprint of the electric vehicle industry, especially PT. Vale and Huayou Group, which risk the safety of residents in East Luwu, South Sulawesi and Pomalaa, Kolaka, Southeast Sulawesi.

In 2018, PT Vale’s activities caused Lake Mahalona to be heavily polluted due to sedimentation of ex-mining soil. Until now, the mud is still in Lake Mahalona and triggers siltation of the lake. In August 2021, PT. Vale’s operations also polluted the waters of Mori Island, PT Vale’s Sulfur spilled and polluted the coast and Mori Island.

In 2016, PT Vale allegedly seized agricultural land and damaged the pepper plantations of the people of Asuli Village, Towuti District, East Luwu. At that time, PT Vale promised to provide the community with a temporary economic program, until the community received restoration of their economic and social rights, in accordance with PT Vale Indonesia’s standard of protection. However, at present, the compensation, alternative economy and restoration of socio-economic rights that were promised by PT Vale Indonesia to nearly 200 heads of families in Asuli Village have not been realized.

Moreover, PT. Vale criminalized seven activists and the indigenous people around the mine in March 2022. The criminalization of these residents began when the indigenous people around the mine held a demonstration demanding PT. Vale’s accountability for nickel mining activities on the community’s customary land. The community also demands PT. Vale Indonesia to make public data regarding the CSR programs that have been carried out by the company’s management.

Continue to Dredge Coal in the Name of Low Emission Electric Vehicles

Ironically, all the devastation associated with the electric vehicle industry above, is covered by the mask of a low-carbon, environmentally friendly and sustainable label. In fact, to supply energy at the nickel smelter that produces electric vehicle battery components, it takes millions of tons of coal dredged from Kalimantan’s forests, sacrificing residents and their living space.

For PT. IWIP’s operational needs in Central Halmahera, for example, the company is building a coal-fired power plant with a total capacity of 750 MW. It powers up larger than the capacity of one of the main power plants in Java, PLTU Cilacap, which has a capacity of 700 MW.

The same is the case with PT. IMIP, a subsidiary of the Tsingshan Group in Morowali Regency, Central Sulawesi. For its operations, PT. IMIP requires a coal supply of up to 9 million metric tons annually to operate a PLTU with a capacity of up to 3,200 MW.

This situation is exacerbated by the provisions in Presidential Regulation No. 112 of 2022 concerning the Acceleration of Renewable Energy Development for the Provision of Electricity. Even though this Presidential Decree regulates the early retirement of coal-fired power plants, this Presidential Decree also provides privileges by still allowing the construction of new coal-fired power plants that are integrated with industries that are built oriented towards increasing added value or smelters for processing mining products.

The pace of investment in the electric vehicle battery sector, coupled with various policy incentives to continue building this coal-fired power plant, will further place areas where coal extraction sites, such as Kalimantan, are in a prolonged socio-ecological crisis.

In our opinion, President Jokowi’s invitation to invest in a number of giant companies from Europe, is not in the framework of the welfare of local residents, on the contrary, it is a source of new disaster for residents and their living space.

This fantastic value investment will only add to the profits for business industry players, including a handful of Jakarta’s political elite who are directly or indirectly involved in the investment chain for the electric vehicle ecosystem in Indonesia.


Source: Jatam

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