Mining policy may lead to lower grants

Mining policy may lead to lower grants

Source: Jakarta Post, October 22, 2002

By Moch. N. Kurniawan, Jakarta

The World Bank is warning that foreign donors may further reduce their environmental grants to Indonesia in response to the government's recent decision to allow several mining firms to operate in protected forests. Kathy MacKinnon, the World Bank's senior biodiversity specialist, said here on Monday that even before the mining firms were allowed to operate in protected forests, donors to Indonesia were already reluctant to earmark funds for the environment due to unrest in various regions and illegal logging in conservation areas. "We can't give our funds to improve environmental conditions where there is a high risk of not succeeding," she told The Jakarta Post on the sidelines of a workshop on Global Environment Facility (GEF). She said the GEF, established in 1992 following the Earth Summit in Rio de Janeiro and managed by the United Nations Development Program, was one of agencies that was unwilling to provide more grants to Indonesia.

The GEF has canceled a project to maintain biodiversity in Maluku due to the prolonged conflict there, halted a project in West Kalimantan due to unrest and recalled project objectives in the Kerinci Seblat national park in Sumatra, she said. Since GEF established representative here in 1992, it has disbursed over US$50 million in grants for environmental programs carried out by the government and non-governmental organizations. Indonesia receives environmental grants from a number of other agencies as well, including USAID and the Asian Development Bank. MacKinnon urged the Indonesian government to foster good governance to ensure its policies do not harm the environment, which would in turn convince donors to provide additional grants. However, the government's approval to the six mining companies to operate in protected forests will only discourage international institutions from funding environmental protection programs in Indonesia, she said.

Earlier this month, the House of Representatives approved the government's plan to allow at least six mining firms to resume open pit mining operations in protected forests in order to help promote regional development. The six mining companies are: PT Weda Bay Nikel and PT Nusa Halmahera (located in Maluku province), PT Gag Nikel (Papua), PT Galuh Cempaka (South Kalimantan), PT Jorong Barutama (Papua) and PT Barisan Tropical Mining (South Sumatra). To avoid violation of Law No. 41/1999 on forestry, which banned open pit mining in protected forests, the House changed the status of the six firms' operating areas from protected forests to production forests. Several NGOs have accused the government and the House of betraying the trust place in them by the people to protect the forests, and have threatened to file a lawsuit.

A senior adviser to the state minister for the environment, Aboejowono Aboeprajitno, said Indonesia would continue to receive environmental grants from foreign donors if the government was active in promoting its environmental protection programs. "Indonesia has the largest biodiversity in the world. Therefore, our environment has become the focus of attention for the world. However, we lack the funds to manage our environment properly. So we must upgrade our skills if we want to get more and more grants," he said.