The Hunt For Minerals In The Coaled Heart Of Borneo

Last week, at its annual general meeting, BHP Billiton Chairman Jac Nasser faced a barrage of difficult questions relating to the mining behemoth's environmental and social impacts.

The first came from Arie Rompas. Having grown up in a small village in the remote rainforest of Central Kalimantan, Indonesian Borneo, Arie’s was an unlikely voice at the AGM of one of the world’s most powerful companies.

But Arie and his fellow Siang people are grappling with the increasing presence of BHP on their ancestral lands, as the company works to open up a series of coal mines in the ‘Heart of Borneo’.

“We get our food from the forest, our culture is tied to the forest. If BHP follows up with the Indomet project, we are concerned that we will lose our forest and our identity… My question for you is: will BHP Billiton move forward with the project if local people and the international community are against you?”

A skilled manager and confident public speaker, Nasser responded: “I appreciate your interest and obvious passion around the subject… you ask some good questions and I know you are interested in the right answers,” before arranging for Dean Della Valle, president of BHP’s global coal business, to talk to Arie for a “comprehensive debrief” on the project.

The Indomet Coal Project encompasses seven Contract of Work (CoW) areas in East and Central Kalimantan that would collectively cover 350,000 hectares – an area larger than the ACT.

The project, a joint venture between BHP Billiton and Adaro Indonesia, is worth a reported $1.3 billion AUD. The two companies plan to extract one million tonnes of coal in the first year that Indomet is operational, with a much larger future production goal of ten million tonnes a year.

Despite its scale, BHP is quite tight-lipped about the project. A spokesman for the company told this author that it was “not something we are going to directly comment on at this point in time,” although they provided a statement that BHP Billiton “is progressing the development of a small scale mine in Kalimantan called Haju and we expect first production next year,” and that they are “continuing to evaluate the potential for larger scale developments in the region.”

The IndoMet concession area falls within the so-called ‘Heart of Borneo’. The Heart of Borneo Initiative (HoB) is an ambitious plan to conserve 220,000 square kilometers of forests in interior Borneo across Malaysia, Brunei and Indonesia.

In 2007 the governments of these three trans-Bornean nations signed a memorandum of understanding pledging to protect the HoB area, although little has been done to bring this goal to fruition.

While the project has come under heavy criticism from academics, NGOs and environmentalists for its ineffectiveness, no-one debates the importance of protecting this important conservation area – not even BHP.

“We understand the environmental significance of the “Heart of Borneo” and we believe our approach to operating in a sustainable manner can make a positive contribution to the region,” said the spokesman.

The HoB area, which the Asian Development Bank has called “the largest contiguous forest area remaining in Southeast Asia and… one of the most biologically diverse habitats on Earth,” is home to six per cent of the world’s biodiversity, and the headwaters of 14 major rivers, which provide water to 11 million people.

There is an estimated 75,000 hectares of primary forest just within the Indomet concession area.

The area is also home to communities of indigenous people – like Arie – who rely on the forest around them to survive. But as deforestation and the burning of coal are major contributors to global climate change, the prospect of a very large-scale coal mine in the Heart of Borneo poses risks to people all over the world.

There are already reports of environmental and social problems related to the development of the Haju mine. A lack of formal title deeds and official maps open up the process of land acquisition in Central Kalimantan to abuse, and it is alleged that 700 people in the village of Maruwei were intimidated by police and strongmen into accepting just 300 Rupiah (about 3 Australian cents) for each square meter of their land.

“People were forced to sell their land, forced to sell their fields and they were forced to move out of the area,” says Arie. “The people did not have a choice.”

Furthermore, no environmental impact study has been produced for the Indomet project, or the Haju mine which, remember, could enter the production phase of operation within the next year.

In his meeting with Della Valle, Arie says that BHP claims to have done biodiversity assessments, but would not provide him with a copy.

While the Indomet project may be the largest project underway in the Heart of Borneo, it is by no means the only one.

The process of decentralisation that has unfolded in Indonesia since the fall of the Soeharto regime has led to a development boom in many parts of regional Indonesia.

To encourage industrial development in what has for a long time been considered by many as a ‘backward’ area, the Central Kalimantan Provincial Government is aggressively promoting the construction of a 425km railroad, which would run from the remote north of the province to the coast.

The railroad would go directly to the regency in which Indomet operates and this key piece of infrastructure is crucial to the ability of companies like BHP to exploit the resources of the interior.

If constructed, the railroad would be used just for the transportation of coal; it would not offer a passenger service. The project has thus been criticized for its questionable benefit to the people of Central Kalimantan.

On the campaign trail last year, the now Indonesian President Joko Widodo (‘Jokowi’) said that the project would be reviewed. Then, just last week, Deddy Priatna, the Deputy head of Infrastructure at Indonesia's National Planing Body (Bappenas), formally announced that the project would be placed under review.

“The project is only oriented towards exploiting the natural resources of Central Kalimantan, and because of that communities could suffer,” he said.

Arie says Della Valle did not answer his questions about the railroad. “They didn’t want to say if they had contributed to the project or whether they wanted to participate it in. But if you ask me, of course they want the railway.”

So was Arie, who came all the way from interior Kalimantan to Adelaide just to ask a question, satisfied with the response?

“We are not very happy because what we want is for BHP to not go ahead with the Indomet project or any activity over there [in that area].

“But they just said that they will try and minimalise the environmental impact of the mine. They wouldn’t give any guarantee as to how they would recognize the community’s rights.”

And the stakes are high.

“This is some of the last remaining tropical forest and if BHP opens a mine there it will accelerate the process of environmental destruction.

“It will also trample the community’s rights and compromise their cultural identity.”

It seems there are many questions that remain to be answered.