Apr 26, 2020

West Papua: Indonesia Continues Mining

Indonesia is bringing coal mining to West Papua despite an independence movement that has contested Jakarta’s claims to the region’s resources for almost 60 years and faced violent repression. The region also has a track record of destructive mining and gas projects that have brought few benefits to most local residents.

Below is an article by Skylar Lindsay for ASEAN Today

Indonesia is one of the world’s largest exporters of coal and with little oversight, coal mining companies in the archipelago have cleared rainforests and polluted natural resources, often belonging to indigenous communities. On the island of Borneo alone, coal mining concessions already cover more than 3.8 million hectares. In addition to exports, the country has plans to build dozens of new coal-fired power plants, deepening its dependence on coal despite having pledged to reduce carbon emissions by 29% by 2030.

Until now, Indonesia has developed mines primarily on Borneo and Sumatra but politicians in Jakarta and coal mining firms are now turning to Papua, the western portion of the island of New Guinea. The government has granted 25 companies permission to explore for coal in West Papua province and according to Mongabay, four companies are actively attempting to negotiate with local landowners. 

In Papua, natural resource extraction is highly contentious. Indonesia annexed the region in 1969 through a sham vote and the West Papuan independence movement has been resisting Jakarta’s control for nearly 60 years.

The conflict has often turned violent and over 500,000 indigenous West Papuans have been killed. Last August, the region saw the largest protests for West Papuan independence in 20 years. With the region’s history of violent state oppression and deeply-seated mistrust, it is immensely difficult to develop natural resources in a safe and responsible way.

Coal offers few benefits but risks replicating mistakes from other extractive industries

Local residents and the Indonesian government have long known about Papua’s coal deposits, as did Dutch colonizers, but the reserves were previously deemed too difficult to mine and too far from economic hubs. As coal became more profitable and technology improved, mining companies began expressing interest in the area, chiefly around Bintuni Bay, a long inlet on the far west end of the island.

Jakarta’s push to develop natural resources across the archipelago is also part of a strategy to centralize power and control. Decisions about how to manage the region’s natural resources are controlled almost entirely by Jakarta and pressure from extractive industries.

Papuan activists say local communities may see few of the benefits from the new coal development while being forced to bear most of the costs.

Papua is already the site of extensive mining operations, including Grasberg, one of the largest gold and copper mines in the world and worth an estimated US$100 billion. Operated by state-run firm Freeport Indonesia, the mine dumps thousands of tons of waste per day into local rivers and has been linked to human rights abuses.

The West Papuan independence movement considers any project like Grasberg to be a violation of West Papuans’ rights to their natural resources and some groups defend this claim with violence. As recently as March 30, the West Papua National Liberation Army (TPNPB) attacked the mine and killed an employee, New Zealand national Graeme Thomas Wall. He was at least the seventh person killed in the conflict this year.

Apart from coal prospecting, Bintuni Bay is also the site of a massive US$10 billion gas field. Known as the Tangguh project, the gas field is being developed by BP. But critics say the company has worked with Indonesian security forces to militarize the project and was complicit in human rights abuses, including torture. 

Though BP worked to engage with local leaders and supported many community development initiatives, residents have seen comparatively few benefits from the company’s plans to extract 14 trillion cubic metres of gas. Local residents reportedly refer to BP Tangguh as “the second Freeport.”

Coal does not offer West Papua a path out of poverty

Despite the contentions around Tangguh and Grasberg, the Jakarta government and extractive companies still pitch resource development as a path out of poverty for West Papuans. One in four people in Papua live on less than one dollar a day while the poverty rate in Papua is three times higher than in the rest of the country. 

Last year, gross domestic product (GDP) in Papua shrunk by 7.4%—the lowest growth rate in the country—as national GDP rose by just over 5%. At the same time, mining operations supply significant tax revenues for Jakarta—between 1992 and 2009, Freeport paid US$9.3 billion in taxes.

There is strong evidence that mining and resource extraction will not improve the situation for local communities. A recent province-level study has shown that growth in the mining sector has done nothing to alleviate poverty and that sharp accelerations in mining projects exacerbate poverty. 

Abra El Talattov, a researcher at Indonesia’s Institute of Economic and Financial Development (INDEF), has said the region’s dependence on extractive industries plays a role in its economic struggles. “One of the reasons behind the economic decline in Papua is the decline of its mining industry, the biggest contributor to GDP in that region,” Abra said.

In 2010, Wikileaks released communications showing that US diplomats consider the Indonesian government at fault for West Papua’s “chronic underdevelopment”.

Beyond the question of local benefits, coal mining is a troubled industry in Indonesia. Coal prices dropped last year for the third year in a row, declining 28%. This year, the government told producers to reduce their output in a bid to keep prices higher. But policy solutions only serve to artificially prop up the industry as the climate crisis and cheaper renewables signal its long-term decline. 

Amid the threats of pollution, armed conflict and declining growth, the development of new mines in Papua poses a major risk to local residents as well as mining firms. By excluding West Papuan leaders from the management of their natural resources, coal firms and the Jakarta government risk exacerbating the conflict in the region and recreating the mistakes of the Grasberg mine and the Tangguh gas field.


Photo: TripodStories- AB / CC BY-SA