From Nickel to Deforestation

Thousands of nickel mining companies ignore their reclamation obligations and do not have forest release permit. Deforestation in Sulawesi is reaching half a million hectares.

IT was a hot day in December 2021. Dust from the red dirt road in Kolono Morowali Village, Central Sulawesi, was blown into the air when a white truck carrying nickel passed through it. From PT Sulawesi Resources mine road junction, the 30-ton capacity truck proceeded downhill along the side of the Laronsong River towards the port.

Writing on the sign erected at a post guarded by two men in brown uniform declared that the port is owned by PT Oti Eya Abadi. A 10 thousand-ton barge was standing by on the shore. Upon arriving, the white truck immediately transferred its cargo. It took 15 minutes to unload the nickel. Dozens of other trucks waited in line for their turn to transfer similar nickel cargo to the barge.

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The deeds of the company as recorded at the Law and Human Rights Ministry in October 2021 states that the owner of PT Oti Eya is Ahmad Ali. He is a Legal Affairs Commission member of the House of Representatives from the National Democratic (NasDem Party). His position in the party, led by media tycoon Surya Paloh, is vice-chairman.

Other shareholders include Nilam Sari Lawira. She is Ahmad Ali’s wife. They are both from the NasDem Party. Nilam is currently the Speaker of Central Sulawesi Legislative Council. This province is the birthplace of Ahmad Ali, a politician once known as the financier of the Poso terrorism act, whose case of narcotics abuse in 2003 disappeared when he ran for Morowali Regent in 2013.

PT Oti Eya Abadi’s nickel mine is located in Ululere Village, 5 kilometers from the Kolono Village port. In Ululere, dozens of heavy equipment dig the dirt and transfer the load to trucks. According to Basri Tarfin, a local, heavy equipment from PT Oti Eya began digging there a year ago. “We used to plant pepper before they were here,” said the 44-year old man.

The pepper plants are no more, replaced by dust from the red dirt during the dry season and holes on the ground left by nickel mining. Basri still owns a 2-hectares wide plantation, not far from Oti Eya’s mining area. Staff from the company repeatedly visited him with an offer to buy his land for Rp 120 million (US$ 8,275) per hectare. Basri refused. “My kin regrets selling to the company because now they no longer have a source of income,” he said at the end of December 2021.

In Minerba One Map Indonesia (MOMI) — a mineral and coal mine map application from the Energy and Mineral Resources Ministry — the land being dug is still shown as a mining business permit area. This means the area cannot yet be mined. It measures 1,896 hectares.

The area used to be a work contract area of PT Inco, alias PT Vale Indonesia Tbk. In 2015, the Energy Ministry revoked this concession because Oti Eya’s permit overlapped with PT Vale’s concession. According to Law Number 3 Year 2020 on Mineral and Coal Mining, revoked permits should be auctioned and prioritized for state-owned companies. The Ministry, therefore, appointed PT Aneka Tambang Tbk in 2018 to manage it.

Believing that they have had the permit since 2010, Oti Eya’s management challenged the appointment of Antam to Jakarta State Administrative Court. Oti Eya won at the first-level court. However, they lost at the appellate court. “Oti Eya’s management is preparing for a cassation,” said Ahmad Ali, who claims that he no longer owns shares in the company.

According to him, the actual dispute is not with Antam, but rather between Oti Eya and Jimmy Widjaja, the son of business magnate Eka Tjipta Widjaja, founder of the Sinar Mas conglomeration. Jimmy has a nickel mining cooperation with Antam in the area. Other than in Morowali, Jimmy and Antam also partnered to mine nickel through PT Tambang Matarape Sejahtera in North Konawe, Southeast Sulawesi.

Head of PT Antam Corporate Secretary, Yulan Kustiyan, did not explicitly elaborate on the conflict with Oti Eya. “We have won the appeal and are now going through cassation,” he said. He did not answer the accusation from Ahmad Ali that Jimmy Wijaya is behind the dispute. Meanwhile, Jimmy did not respond to Tempo’s inquiries. “He is having a meeting,” said his aide.

Because the nickel mining permit dispute is still ongoing, PT Oti Eya should not be mining the nickel. Ahmad Ali admitted that his company continues to mine despite the legal case not having been concluded just yet. “We won, we mine,” he said. “We will stop if we lose.”

Outside of the dispute, Oti Eya allegedly also does not have the forest area utilization permit (IPPKH) from the Environment and Forestry Ministry. Oti Eya’s operation contributed 1,700 hectares of illegal deforestation to Southeast Sulawesi from 2018 to 2020. According to the regulation, mining without a permit carries a penalty of 10 years in prison and a fine of Rp 5 billion (US$ 345,000) — although this particular regulation was annulled by the Cipta Kerja Law (Job Creation Bill) and replaced with only fines.

Ahmad Ali said that not all of his company’s concession areas are located in forest regions. Some 500 hectares are in other areas of purpose. But lately, he claimed that the miners operating in Oti Eya’s area are illegal miners. “The police arrested illegal miners there,” he said.

In addition to Oti Eya, PT Citra Teratai Indah is also mining without permit in the forest in Morowali. This company, owned by Central Sulawesi mining entrepreneur Karlan Manessa, has just entered Minerba One Data Indonesia (MODI) in September 2021. Its land measures 689 hectares. “The area is small, but it has nickel reserve,” said Karlan. He claims that his company’s concession is located outside of the forest area, thereby he does not feel it necessary to obtain IPPKH.

Komiu, a Central Sulawesi environmental non-government organization, calculated that irrecoverable land due to nickel mining until 2021 reaches 36 thousand hectares or about half the area of Jakarta. Out of that number, deforestation without forest release permit contributed 7,000 hectares. Meanwhile, Auriga Nusantara Foundation counted that deforestation due to nickel mining in Central Sulawesi and Southeast Sulawesi reaches 500 thousand hectares.

Other than local entrepreneurs and politicians mining nickel, large corporations also contribute to the environmental damage. For example, PT Bintang Delapan Mineral has been mining nickel in an area measuring 20 thousand hectares since 2010, although the permit was only issued in 2015. The unlicensed nickel mining led to the destruction of 3,800 hectares of forest.

Bintang Delapan Mineral is a subsidiary of Bintang Delapan Group, shareholder of PT Indonesia Morowali Industry Park (IMIP), the industrial area that processes nickel, through PT Bintang Delapan Investama. According to the deed of the company, its commissioner is Lieutenant General Sintong Panjaitan, Commander General of the Indonesian Army Special Forces Command from 1985 to 1987. There is also Major General Hendardji Supandji, Indonesian Army Military Police Commander from 2006 to 2007.

Central Sulawesi Forestry Service Head Nahardi said the regional administration does not have the authority to take action against nickel mining carried out without a forest release permit. The planning, implementation, to the monitoring of nickel companies are under the authority of the Environment and Forestry Ministry.

Prevention and Forest Protection Director of the Environment Ministry Law Enforcement Directorate Sustyo Iriono refused to comment on the illegal nickel mining in Sulawesi. He said that inquiries should be addressed to Law Enforcement Director General Rasio Ridho Sani. However, Rasio, did not respond to Tempo’s questions.

Aside from causing deforestation, the nickel companies in Sulawesi also neglect their obligation to reclaim the gaping holes left behind by mining. Oti Eya is included in the list of 3,048 companies that do not comply with the requirement of reclaiming quarry excavation sites, as released by the Energy Ministry. “I have given Rp 9 billion (US$ 621,000) as a guarantee for reclamation,” said Ahmad Ali.

Damaged forest area due to nickel mining also extends to Southeast Sulawasi, a province with the largest nickel reserve of 1.8 billion tons in Indonesia. For example, the operation of PT Tiran Indonesia, which owns a concession area of 1,400 hectares in North Konawe. This company, owned by Amran Sulaiman, Agriculture Minister from 2014 to 2018, built mine road without IPPKH.

Another company owned by Amran, PT Andi Nurhadi Mandiri, allegedly also mines nickel using a smelter (nickel ore refining) construction permit in June 2021. PT Andi Nurhadi’s smelter location is flanked by three mining areas belonging to PT Binanga Hartama Raya, PT Alam Raya Indah, and PT Pernick Sultra.

In the company’s planning, PT Andi partnered with a Chinese company, PT Tonghua Jianxin Technology, to build the smelter, valued at Rp 4.9 trillion (US$ 338 million). However, aerial photograph taken last June does not picture a smelter, but a former nickel quarry instead. The photo is confirmed by satellite imaging, which shows signs of increasingly massive land excavation until November 2021.

Spokesperson of Tiran Group, the parent company of Tiran Indonesia and Andi Nurhadi Mandiri, La Pili, denied the allegation that the company mines nickel under smelter permit. “It is called the mineral commodity content sales mining business permit,” he said. “So, we have the basis.”

The name of the permit mentioned by La Pili is not found among the seven nickel mining permits, namely exploration permit, production operation mining business permit (IUP), production operation special IUP, refining and processing special production operation IUP, transport and sales special production operation IUP, and mining service business permit. If La Pili meant sales special production operation IUP, the authority is limited to only purchasing, transporting, and selling nickel.

As for the suspicion that the company built mining road without having forest release permit, La Pili denied it as well. According to him, the company has been mining nickel in North Konawe for a long while. “The company cannot be doing something wrong,” he said. “Just go check to the location.”

Another company recorded as not owning a forest release permit but already engaging in nickel mining is PT Bosowa Mining. It is located right next to PT Tiran Indonesia, with a concession area measuring 1,500 hectares. Documents from the Environment Ministry show that the IPPKH was only issued to Bosowa in 2019, covering an area of 984.9 hectares. However, since the mining permit was issued from 2011 to 2018, there had been 230 hectares of cleared forest in the concession area of the company owned by the family of former Vice President Jusuf Kalla.

PT Bosowa Mining Branch Head Andi Muchlis refuted the information. He said that the company’s IPPKH was issued in 2012. If there had been cleared forest area prior to the issuance of the forest release permit, he suspects that it was due to encroachment by locals. “I cleared about 6 hectares of land in 2013 to build the camp, mess, and road,” said Andi.

Nickel mined by the three companies operating without forest release permits is sold to the two largest smelters in Sulawesi, namely PT IMIP and PT Virtue Dragon Nickel Industry. Virtue Dragon shareholders are Shanghai Descent Investment and Jiangsu Delong Nickel Industry. According to company documents, Lodewijk Friedrich, former Commander General of the Indonesian Army Special Forces Command who is now the Secretary General of the Golkar Party, is the commissioner.

IMIP Communication and Press Relations Coordinator Dedi Kurniawan said that his company receives nickel from Oti Eya, including from the Ululere concession area currently being disputed with Antam. “As long as Oti Eya could prove their nickel is legal, we will accept,” said Dedi. “Antam is not complaining either.” As for mining without IPPKH, Dedi gave no answer.

It is not only about the legality aspect. According to data from China Customs, some 4 million tons of nickel ore from Indonesia entered the country’s ports from 2020 to 2021. The transaction is valued at US$ 236 million or more than Rp 3 trillion. This occurred while the ore export moratorium was in effect during the period. President Joko Widodo wanted nickel ore to be processed in domestic smelter first to provide added value.

PT IMIP Chief Executive Officer Alexander Baru said he does not understand about the ore export to China during moratorium period. Virtue Dragon’s management did not respond to questions regarding this. Indrayanto, External Affair Manager of Virtue Dragon, replied to Tempo’s message by saying “Public relations has not responded”. Daily Secretary of the ESDM Ministry Mineral and Coal Directorate General, Sugeng Mujiyanto, guarantees that there was no nickel ore export during the prohibition period.

All this hustle and bustle is bewildering for Basri Tarfin. He is still not willing to sell his one and only pepper plantation to the nickel company. As he watched the white truck loaded with nickel driving away from Ulurere, he mumbled, “The poor get poorer, the rich get richer.”