Theft by any other name: the community impacts of KPC

Theft by any other name: the community impacts of KPC

Even before KPC was officially opened, allegations had been made by members of a transmigration study team, that site construction was causing considerable problems for the local people. This was occurring notably through the attraction and recruitment of labour from outside the region; the appropriation of local (Kutai) peoples' land and other resources; and a deterioration in the quality of water. "Drunkenness, prostitution and conflict between local people and newcomers have already reached a delicate state," warned the leader of the study team."Large numbers of contractors have been associated with the mine and an oil lease [Pertamina's] across the river [Sangatta]. Workers get taken on for limited periods, however. They get high wages, but prices [of food and necessities] go up. When they quit, they rarely return to agriculture and in any case much of the good farmland has been lost to plantations and now the mine… We're seeing the birth of a floating, aimless, unskilled population with few prospects. And it's the indigenous people who bear the brunt of it" [quoted in Roger Moody Amazonian battle-front reaches Indonesia, Gemini News Service, 1989].

A representative of the company admitted in 1991 that "KPC does not yet have a sufficient understanding of [these] dynamic new communities to make fully informed decisions about how best to develop good and lasting relationships with both local government and new local communities" [Alan Irving Coal Mining and the environment: an East Kalimantan Study, paper delivered at the International Conference on Mining and the Environment, Bandung, July 1991]. Alan Irving, KPC's senior environmental engineer, was referring to the thousands of people who had settled in the Sangatta area, because of the mine and, to a lesser extent, because of the Pertamina oil exploitation on the south side of the Sangatta river. In 1988, the total population of Kecamatan Sangatta was put at 8,400; by 1991 the figure had almost doubled (to 17,816). Irving's statement is revealing for several reasons. First, his typifying the in-migrants to Sangatta as "dynamic" - without apparently knowing much about them - suggests that this is how the company wanted the newcomers to behave: as go-getters, a ready pool of labour, eager to support KPC's construction (the mine was to open the following year, ahead of schedule), but who would move on, when the need for their labour was no longer there.

Second, Irving admits that Kaltim Prima had got beyond all preliminary stages - and to within an ace of opening - without the company having a coherent vision of what these families and their affinitive groups wanted from the project: any concept of their being "stakeholders" didn't enter KPC's calculations. Third, KPC apparently didn't at the time even have a mutual working relationship with the local administration. It is hard not to resist the conclusion that KPC's strategy was to pile-drive its project into operation, cutting corners wherever possible. It would rely on its own corporate "dynamism" (arrogance? munificence?) to smooth out social problems, which were bound to arise as increasing numbers of people, from very different ethnic groups, poured into an area where local government, services and the eco-sphere, were ill-suited to settling them.

By 1986 the newcomers were edging towards 30,000 (26,600). Two years later (1998) their numbers had soared close to 50,000 (47,140) [Andrew Vickerman, head of external affairs at Rio Tinto, to Carolyn Marr, Down to Earth, London, April 22 1998]. Workers at the mine and in ancillary trade or in service industries had, by then, expressed their own disquiet at conditions and pay (see below). But equally - if not more - important has been KPC's failure to countenance, prevent or compensate adequately for the upheavals, losses of land and livelihood, caused by its operations on the original inhabitants of Sangatta - those who made a living from farming and fishing before the company's arrival.

In 1997 KPC claimed that there "are no indigenous people living in the [Kaltim Prima] mining area, nor were there any indigenous people using the area for hunting, gathering or any other purpose." [Down to Earth No. 23, London May 1997]. Unless the company was being quite disingenuous in the use of the term "mining area", this is an inaccurate and high-handed statement, to say the least (This statement was strikingly similar to that issued by Rio Tinto at the same time, to defend its investment in Freeport McMoran's hugely damaging Grasberg mine in West Papua). KPC didn't carry out anything approaching a proper social impact study before moving onto the site (it only signalled its intention to do so in mid-1991) [Alan Irving Coal Mining and the Environment]. Its definition "Indigenous" is - by the tone and language of this statement - clearly coloured by primitive anthropological images of half- naked Dayaks sitting in 19th century longhouses, only to venture out with bows and arrows, when the spirit seized them.

The company gave a more accurate picture in 1998, in response to criticisms of its operations from Down to Earth, the Campaign for Ecological Justice in Indonesia, based in England [Andrew Vickerman to Carolyn Marr, op cit]. Drawing on studies it had by then commissioned, KPC judged that the population of Kecamatan Sangatta in 1985 was 6,870, the majority being Buginese (50%) followed by Banjarese (30%) and Javanese, with local Kutai people and "others" comprising around 10%.

While the number of Kutai people appears not to have dramatically changed since then, obviously the proportion has. Of course this in no way acquits the company, and government, for what has happened to them. On the contrary, the huge influx of new groups into a relatively limited cultural, economic and geographical, space - combined with the expansion of the mine and policing of food gathering, hunting and agricultural activities within the boundaries of the Kutai National Park (see below) - has created new perceptions of comparative deprivation (no less real for that) and discrimination, among those who were there first.

The majority of original (Kutai) Peoples in Sangatta live in the two villages of Sekrat and Sekurai [information from villagers to author, March 1999]. They are currently represented in negotiations" with local government and KPC by six village elders. At a meeting called for my benefit their committee recounted their six main current demands:

1) to go onto the land within KPC's lease from which they were removed (a demand which KPC has rejected);

2) that KPC construct two village roads, one on each side of the River Sangatta;

3) proper and full compensation for the loss of their former agricultural land;

4) free clean water provided by KPC;

5) a halt to blasting operations in areas close to fauna habitation, where birds and animals have "fled because of the use of explosives";

6) adequate control of acid drainage along the Sangatta river (for further discussion of this issue, see below).

In 1986, 73 Kutai heads of family worked more than one hundred hectares, centred around what became the mining township of Sangatta Baru. However, according to the committee, KPC declared them to be "squatters" on government land and, in 1988, only three million rupiahs compensation was offered to twenty families. (KPC disputes this figure - claiming that 9.5 million rupiahs compensation was paid to just six people on January 8 1990) [KPC Allegations by NGOs, February

1997]. KPC maintains that the other 67 people were not entitled to compensation "because it was shown [by a government-led team] that they had only moved to plant the land very recently, a direct result of their hearing that the land was to be acquired by KPC". Nonetheless, "sympathetic funds" were offered by the company, at the rate of 300,000 rupiahs each in 1992.

Fifteen Kutai refused to accept this pay-off. Currently they include Haji Hamsyah, whose status as a negotiator the company has called into question [KPC Allegations, op cit]. Although further negotiations have been mooted for some time, backed by the Indonesian Human Rights Commission (Komnas-HAM) - a delegation from Sekerat visited Jakarta in 1997 along with Pak Pius (the Dayak community leader heading negotiations with Rio Tinto over damage caused by its Kelian gold mine) - there is still, says the village committee, no satisfactory resolution: "nothing has changed!"