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12 Dec 2019

China Dialogue

Indonesia: Wawonii becomes battleground between villagers and Chinese-backed nickel-mining company

“Nickel mining resisted in Indonesia”, 12 December 2019

The remote Indonesian island of Wawonii, just 35km at its widest point, has recently become a battleground between villagers and a nickel-mining company backed by Chinese investors.

… violent protests against the nickel industry had broken out in nearby Kendari, the capital of Southeast Sulawesi province. The deputy governor of the province quelled that unrest by promising to revoke mining permits. But when the governor himself reversed that decision, preparations for mining commenced, causing outrage and the deaths of two protesters.

… Wawonii illustrates the strong feelings of many communities to Indonesia’s drive to increase nickel production with the help of Chinese investment.

The company aiming to start mining in Wawonii, Gema Kreasi Perdana (GKP), is an arm of the Harita conglomerate…

Through a subsidiary, Harita also operates a nickel smelter on the Indonesian island of Obi, to the east of Wawonii, financed by Harita and two subsidiaries of the Chinese firm Xinxing Ductile Iron Pipes…

Though it hasn’t started mining yet, GKP has been building roads, a jetty and a housing complex for its employees.

This early construction has been met with strong opposition from many local people in Wawonii, who are afraid that mining activities will destroy their fragile island ecosystem and damage their livelihoods.

GKP’s operational director, Bambang Murtiyoso, claimed the company would not dump its waste in the rivers or the sea. “We have good waste management,” he told local media. “Just look at our company that’s operating on Obi island … There’s no river pollution there.”

… GKP had used excavators and bulldozers to clear lands owned by residents of Sukarela Jaya village, destroying crops including cacao, coconut and banana.

… Community members trying to defend their lands are at risk of being branded criminals. Mando said 27 Wawonii residents had so far been reported to the police.

Many of them were accused of trying to block the company’s activities. Others, including a man named Idris, were accused of threatening and abusing company workers. On 19 August, before he was named as a suspect, Idris had filed a police report claiming GKP had encroached on his land.

Mando said the company’s jetty has impacted fishers too…

On 14 September, residents against the company clashed with its supporters…

… Harita, together with China’s Ningbo Lygend, are also in the process of building a US$700 million battery-grade nickel plant on the island…

“If we trace the owners of the mining permits in Wawonii, they are indeed linked to China,” Mando said. “While there’s no smelter in Wawonii, the ores are dug up and sent to the big smelter on Obi, which has a lot of Chinese employees.”

As Indonesia looks to develop its nickel-related industries and China eyes further investment, there could be more conflict like on Wawonii in the future, activists warned…

Yose, of the Center for Strategic and International Studies, said Chinese investment should be met with caution. “Chinese investors are more daring than their counterparts in the US and Europe, maybe because they don’t think too much about rules and standards,” he said. “But we have to be careful with businesses like that. They’re more permissive about environmental issues.”

Already there are concerns over the environmental impact of the planned battery nickel factories, especially on how the plants could safely dispose of their waste, known as tailings.

Developers of the Morowali plant said it should be possible to neutralise tailings by removing toxic materials from them and that they are currently preparing an environmental impact assessment.

Sri Bimo Pratomo from the Indonesian ministry of industry, however, said this issue hadn’t been solved, and remained a roadblock to the projects…

Dwi Sawung from the non-profit Indonesian Forum for the Environment (Walhi) said that most of the smelters built by China in Indonesia used old, highly polluting technology, and most Chinese-funded projects lacked environmental safeguards…

[Also referred to Tsingshan Holding Group, GEM Co Ltd, Contemporary Amperex Technology Ltd]