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29 Aug 2022

Hans Nicholas Jong, Mongabay

Activists call for termination of Dairi zinc and lead mine as World Bank watchdog warns “extreme” environmental and social risks, incl. co. response

"China-backed mine in Indonesia poses high risk, World Bank watchdog warns", Mongabay

  • An assessment by the World Bank’s internal watchdog has found indications of “extreme” environmental and social risks posed by a China-backed zinc and lead mine in Indonesia’s Sumatra Island.
  • Among the identified risks are the potential for the mine’s tailings dam to collapse as it would lie on a fault line, as well as the risk of acidic drainage from the dam contaminating surface and groundwater sources that serve local communities.
  • While the project was suspended earlier this year in the face of protests, local and international activists say the findings should be reason enough for it to be terminated outright.


The WB’s Compliance Advisor Ombudsman (CAO) carried out a preliminary review of the mine in response to a community complaint made in October 2019.

In its review of available information, the CAO found a number of risks in the mining project.

The first one is the possibility of the failure of the mine’s tailings dam.


But the developer says the earthquake risk is no greater than for most other projects in Indonesia, which is crisscrossed by fault lines.

“In our location there’s also a hydropower plant as well as a 23-kilometer [14-mile] underground tunnel, which sits right on the fault line,” Achmad Zulkarnain, a spokesman for DPM’s minority owner, Indonesian mining giant PT Bumi Resources Minerals (BRM), told Mongabay in Jakarta. “And there’s no problem with them. They were built many years ago. So this [our project] should be fine.”


The CAO warned that a tailings dam failure would be considered “extreme” under internationally accepted guidelines.

Besides environmental risks, [...]there’s been lack of disclosure of information and of informed consultations with communities potentially affected by the mine [...]

Achmad said DPM had consulted intensively with the owners of ancestral lands in the mining site and gained their approval.

Tongam acknowledged that some in the community support the mine, but questioned whether the project’s risks and benefits were conveyed to them honestly.


[...] CAO also looked into whether there was negligence on the part of the IFC that led it to overlook the risks when investing in Postal Savings Bank of China, a creditor of DPM’s parent company. [...] It [...] conclude[d] that there’s a plausible link between the potential harm flagged by the complainants regarding the DPM mine and potential noncompliance in the IFC’s review and supervision of its investment in PSBC.

Question of ‘leverage’

In their responses to the complaints filed by local communities on the mine’s potential risks, neither the IFC nor PSBC addressed the concerns raised by community members.

Instead, PSBC said it’s not linked to DPM and that DPM is “far beyond its leverage,” requesting that the CAO close the case.


That hasn’t allayed the concerns of communities at highest threat from the project’s potential risks.

Community members held a protest on June 30 outside the district government headquarters and legislature in North Sumatra’s Dairi district, demanding that DPM leave the area.

DPM has had to revise its environmental impact analysis report, locally known as an Amdal. [...] Given the uncertainty, DPM announced earlier this year that it was suspending the project indefinitely, he said.

Natalie Bugalski, the legal and policy director at human rights organization Inclusive Development International, said. [...] “The CAO's findings should be the death knell for the Dairi Prima Mineral mine.”

Part of the following timelines

Indonesia: World Bank watchdog warns Dairi Prima zinc and lead mine poses “extreme” risks to Indigenous communities and environment

Ministry of Environment and Forestry lawsuit (re revocation of Dairi Prima Mineral permit, Indonesia)