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Gagged: proposed mining activity by BHP Billiton, backed by the Australian government, threatens both West Papua's environment and Indonesia's fragile democracy.

Abdul Teng is in his element. Mr Teng is from the North Malukus and is the head of Gambir Village, the only settlement on Gag Island, a diminutive and isolated 56-square-kilometre coral atoll located 150km north-west of Sorong, in the Raja Ampat archipelago, the world's most diverse marine environment. He agreed to talk about BHP Billiton's planned open-pit nickel mine on Gag Island, and his settlement of around 600 people.

Abdul Teng talks animatedly about his time working for the company and his hopes that the mine may soon be operational. Asked about the company's environmental record, Mr Teng looks reflective, smiles, pulls back on his clove cigarette and tells a story: One time a big snake came into our village. Everybody was running around in a panic. We all wanted to kill it, but one of the Australian men who worked for the company wouldn't let us. He made us catch the snake. We put it in a sack and carried it into the forest where we released it. Also whenever we travelled on the company's boat we weren't allowed to throw our cigarette butts into the ocean. All the workers had to put out their smokes in the ashtrays provided. So you see, this is definitely a company that cares about the environment.

Abdul Teng says that he trusts that BHP Billiton will respect the environment and protect the people's gardens, sago palms and fishing grounds, but adds that if they don't 'the people will close the mine down'. Mr Teng hasn't heard of Ok Tedi. He doesn't know that the same company that wanted the people of Gambir Village to protect snakes on Gag and encouraged them not to throw their cigarette butts into the ocean also dumped 80,000 tons of toxic tailings daily into the Fly River. The tailings sucked the life out of the Fly and destroyed the livelihood of those who depended on it. Local people can no longer catch fish. Their sago palms and food gardens are smothered under a blanket of waste stretching for hundreds of kilometres along the river. Thousands of square kilometres of rainforest have been poisoned. The dead trunks point upwards like bony fingers, giving silent testimony beside the deoxygenated banks.

Afterwards, the company walked away and, in a widely criticised deal, has left the Papua New Guinea government to pick up the pieces. The profits have been effectively privatised, but the debt--a damaged environment and the clean-up costs--have been socialised. The local people have paid the heaviest price. This hasn't happened yet on Gag. But it could.

Gag Island is part of West Papua, a resource rich territory on the western rim of the Pacific bordering independent Papua New Guinea. Indonesia gained sovereignty of the former Dutch colony after a widely condemned and fraudulent referendum known as the 1969 Act of Free Choice. West Papuans call it the Act of No Choice. It is not hard to understand why. The Indonesian government, advised and assisted by the United Nations who sanctioned the process, press-ganged 1022 tribal elders, less than one per cent of the population, to vote on the question of independence or integration. Observers, including internationals present at the time, say that participants were told to vote for integration or have their tongues cut out. Not surprisingly, in this climate of intimidation and outright violence, 100 per cent of 'participants chose' to remain with Indonesia. The United Nations rubber-stamped the result, but the struggle for self-determination hasn't gone away.

The waters surrounding Gag Island are an underwater paradise. The tiny island is one of hundreds of islets that make up the Raja Ampat archipelago, an area believed to be the richest source of coral reefs, with the highest marine bio-diversity in the world. A 2003 study by a UNESCO expedition covering 61,200 square kilometres of the Raja Ampat archipelago found hundreds of previously undocumented fish and coral species, bringing the number of new species discovered to 1065 fish species and 505 coral species. Significantly, the coral reefs were found to contain an incredible 64 per cent of the world's total coral diversity. Because of its outstanding scenery and immense marine bio-diversity, the Raja Ampat archipelago is currently being considered by UNESCO for world heritage listing.

Gag Island also sits on top of an incredibly rich seam of nickel which stretches from Halmahera Island in the Northern Malukus, continuing in a sweeping arc into West Papua, through Gag Island and across to Waigeo Island on the eastern end of the Raja Ampat archipelago. BHP Billiton began exploration in 1995 and P.T. Gag Nickel (75 per cent owned by BHP Billiton and 25 per cent owned by the Indonesian company Aneka Tambang) and the Indonesian government signed a contract of work in 1998. Operations were stalled after the Indonesian government enacted one of its most impressive pieces of environmental legislation to date, Forestry Law No. 41, which prevented open-cut mining in protected forests, of which Gag Island was declared one. Since then, however, the mine has been held in care and abeyance.

Ian Wood, previously BHP's environmental manager for Ok Tedi and now the man responsible for the Gag Island project as head of External Affairs at BHP Billiton's Melbourne office, claims that since BHP's merger with Billiton, Gag Island 'is no longer on our current five-year development schedule'. However he is quick to reassure me that the company has made a significant investment in Gag. 'It is a project that the company would ultimately like to see come to fruition,' he says.

The same message was reinforced by the current CEO, Chipp Goodyear, at the recent annual general meeting in Melbourne. Goodyear argued that the company's success is predicated on a strategy involving a 'diverse mix of commodities and geography'. BHP Billiton is currently the world's third largest nickel producer, a mineral essential for the production of aluminium and stainless steel. Runaway Chinese demand for nickel is driving up world prices and putting pressure on BHP Billiton to bring the Gag mine out of the project development pipeline and into full operation.

If mining operations do go ahead as planned, up to three-quarters of the total landmass of the island will be turned into an open-pit mine. Mining would continue for up to twenty years and extract up to 33,000 metric tons of nickel from the 660,000 metric tons of rock dug out of Gag. That's a lot of waste for a tiny island in the middle of a marine wonderland.

Wood explained that the company is currently considering three likely options for tailings disposal. The first method effectively involves strip-mining two-thirds to three-quarters of the island via a series of holes drilled into the earth to extract the nickel. These old mined-out holes are then filled in with the mine tailings. This is the most expensive option for the company. The second method involves building a tailings dam in a small valley in the northern section of the island. This valley also happens to be where local people have their food gardens. Both of these land-based options are considered extremely risky, partly because of cost mid partly because the high levels of rainfall and seismic activity in the region could jeopardise the structural stability of a land-based tailings option and adversely affect the health and wellbeing of those who live and work on Gag. Spillage from a land-based tailing option could also damage the island's fragile fringe of coral reefs, which are extremely sensitive to run-off and turbidity. Wood concedes that the community would oppose a conventional tailings dam because it would affect their food gardens.

The disposal option most favoured by the company is Submarine Tailings Disposal (STD)--that is, the company wants to dump toxic waste in the ocean. It is a practice outlawed in Australia and condemned by environmentalists worldwide. It wouldn't be allowed in the Great Barrier Reef, so why is BHP Billiton even considering doing it next door? Dumping mine tailings in the world's most diverse marine environment is a practice that is hard to reconcile with BHP Billiton's much lauded public policy position of 'zero-harm' to the environment. A position that chairman Don Argus says he 'is very proud of.... A leadership position that ... is not an add-on ... but an integral part of what the company does'.

Widely respected West Papua specialist and Australian National University academic Chris Ballard, who has worked for years with communities affected by mining in West Papua, says that this is the standard modus operandi for mining companies operating in the Asia Pacific region. 'Line up the option for tailings disposal that you really want--in this case STD--then identify two other horror options to pressure the community into accepting your preference. I'd be very surprised if their engineers could only come up with three options. I would want to know what other options are technically feasible but were discarded because of cost,' says Ballard.

In an effort to pressure the Indonesian government to allow mining on Gag, BHP Billiton has enlisted the support of the Australian Government. Normally reticent to be seen as meddling in Indonesia's domestic affairs, especially when it comes to West Papua, the Australian government established a special departmental position within the Australian embassy to lobby the Indonesian government on behalf of Australian mining companies. Responding to questions asked in Parliament by Greens Senator Bob Brown in 2002, Foreign Affairs Minister, Alexander Downer, admitted that former Australian Ambassador to Indonesia, Richard Smith, personally lobbied the Indonesian Minister for Mines and Energy, the Minister for Economic Affairs, the Minister for the Environment, the Minister for Energy and Mineral Resources, Indonesian parliamentarians and senior Indonesian officials from the Department of Forests on behalf of BHP Billiton and other Australian mining companies to pressure Jakarta to make changes to legislation to allow mining in protected forests.

According to Downer, 'the Ambassador meets on a quarterly basis with representatives of Australian owned mining operations in Indonesia ... to discuss issues of concern to the Australian mining industry in Indonesia.' In other words, the Australian government will obstruct and deny the West Papuan people's legitimate right for self-determination on the one hand, but actively support corporations to maximise profit at the expense of the environment and local communities on the other.

Early last year the Secretary of the Australian Department of Industry, Tourism and Resources, Mark Patterson, proposed the abolition of the embassy's pro-mining activities. The mining industry was infuriated. Regional exploration manager for Newcrest Indonesia, Tim Richards--whose company is desperately trying to get approval for a mine in neighbouring Halmahera Island--says that those who had worked in the role had done a 'terrific job in Indonesia ... to discuss issues of concern to the Australian mining industry in Indonesia'.

BHP Billiton has denied pressuring the Indonesian government to allow mining in protected environmental areas. In reply to a question from shareholder Roger Moody at the company's 2003 AGM in London, Chairman Don Argus stated: 'To my knowledge, no. And I certainly wouldn't believe we would apply any pressure anywhere'. Argus again denied knowledge of the Australian government pressuring the Indonesian government on behalf of the mining giant at the AGM in Melbourne. Given the high level lobbying and the Australian government's admission that it had done this work on behalf of BHP Billiton, Mr Argus's comments just don't add up.

The pressure is certainly having an effect. Pro-mining, anti-environment activities by the Australian government and mining industry threaten to undermine not just the environment but also threaten Indonesia's fragile democratic process with foreign intervention. In June 2002, the Indonesian Director General of Geology and Mineral Resources, Wimpie S. Tjejep, and the Minister for the Environment, Nabiel Makarim, revealed that the Indonesian government feared international legal action if it excluded mining from protected areas. 'There were investment activities before the Forestry Act was effective. If shut down, investors demand and Indonesia cannot pay,' said Minister Makarim. This is exactly Ian Wood's point and obviously the one Australia's ambassador was pushing when meeting Indonesian ministers and officials on behalf of BHP Billiton: that the company had a legal agreement prior to Gag Island being protected under Forestry Law No. 41.

Some Indonesian government ministers have expressed concern regarding the threat by foreign mining companies to seek international arbitration, if not granted exemptions to Forestry Act 41/1999. Members of Indonesian parliamentary environment committee VIII have complained of the international pressure to allow mining to continue in protected forest areas or lose all foreign investment. Oxfam CAA Mining Ombudsperson, Ingrid Macdonald, writes: 'industry sources now believe that, despite the forestry law and the intervention of reputable NGOs and institutions like UNESCO, mining on Gag is inevitable'.

Mining watchdog, the Mineral Policy Institute, says that central to Australian lobbying of the Indonesian government 'is the dubious claim that some of the protected areas are "not forested" or are not of high quality or biodiversity value. [These] claims are unsupported by documented independent investigations but in any case ignore key functions of protected forest areas'.

Under the Forestry Law of 1999, a protected forest is defined as an area with the purpose of protecting livelihoods and ecology through flood mitigation, controlling erosion, inhibiting the intrusion of saltwater and maintaining soil fertility and other lifesaving functions. Indonesian environmentalists point to evidence that clearly shows that Indonesia's forests and coral reefs are in crisis; both are disappearing at an unprecedented rate. Pollution and catastrophic flooding plague water catchments. Indonesian environmentalists insist that Forest Law No. 41/1999 is essential to protect Indonesia's rapidly diminishing forests and coral reefs.

A few weeks ago, I returned to West Papua. Riding on the back of a motorcycle taxi, I sped along Jayapura's foreshore to meet Mama Loretha. She is an indigenous Papuan from the Beteuw tribe, which she claims is the original custodian of Gag. The motorcycle climbed up the side of the hill, stopping outside a simple and sparsely furnished dwelling with a view out to Cendrawasih Bay. At first Mama Loretha is shy, perhaps even suspicious of me. To begin with she stays in the kitchen, stoking the wood fire, but before long joins her husband and me in conversation. The Beteuw, says Mama Loretha, are from neighbouring Pam Island but have always maintained a living relationship with Gag, regularly visiting the island which she says is 'a place of great supernatural power'. Over the last few years Mama Loretha and her husband--from the North Malukus--have traversed nearly the length of the Indonesian archipelago to resolve the conflict on Gag. They have travelled by boat from Jayapura to Sorong, then to Jakarta and back to Jayapura, and the weariness of it all shows on their faces.

She tells me that shortly after the contract of work was signed between P.T. Gag Nickel and the Indonesian government in 1998, members of the Beteuw approached the company to discuss their traditional rights and claim over Gag Island. Until now, she says, the company have refused to meet with them. 'Everyone living on Gag,' says Mama Loretha, 'are migrants from the Malukus. They are not from Gag at all. We are!' she says, pointing to herself. 'Why does the company refuse to talk to us?'

Despite this, Mama Loretha insists that the Beteuw have a good relationship with those now living on Gag and that the people living at Gambir Village are free to garden and fish. Their anger is directed at BHP Billiton. 'Everybody on Gag knows who owns the land,' says Mama Loretha. She backs this up by saying that when BHP Billiton paid Rp.439,000,000 (approximately AU$80,000) compensation to the villagers of Gambir in recognition, the people of Gambir Village--migrants from the neighbouring North Malukus--independently paid the Beteuw Rp.30,000,000 (approximately AU$6000) in recognition of their prior existing land rights over Gag Island. 'If the migrants living on Gag acknowledge and respect us,' ask the Beteuw, 'why can't BHP Billiton?'

It is a question that Ian Wood avoids by questioning the legitimacy of their claim, adding that the company doesn't want to meet with the Beteuw because it could create expectations that the project will begin in the near future. 'I feel sorry for the people on Gag,' says Wood. 'They have been waiting for this project to go ahead for nearly 30 years.' For the Beteuw, however, it is not a question of expectations about future work, but about addressing conflict over work already completed. Mama Loretha says that the company hasn't negotiated with them or compensated the Beteuw for the extraction of several tons worth of samples during the exploration phase or for the building of the airstrip and base camp.

Both the Beteuw and those on Gag are adamant that riley want the project to go ahead, hopeful that at the same time the environment will be respected. Both communities also acknowledge the good that the company has done so far, helping to build a boat and supplying the island with much needed facilities. They believe that the project will be a means to provide for the health, education, employment and welfare needs for both themselves and future generations. The Beteuw in particular want the company to ensure that the wealth generated by the mine benefits the Beteuw, local communities from Raja Ampat and indigenous Papuans in particular, rather than being siphoned off to Jakarta and western shareholders. The Beteuw have drafted up recommendations for the percentage of Beteuw, indigenous Papuans, non-Papuans (Indonesians) and outsiders to be trained and employed by the company. They have yet to receive a response to this document from BHP Billiton.

The Beteuw and the community of Gambir Village, however, are not the only parties closely watching what happens on the island. Pro-independence activists also argue that mining companies are exploiting West Papuan resources without their permission, creating havoc, destroying the environment and undermining a future economic basis for an independent West Papua. Indigenous West Papuans living in island communities surrounding Gag, however, don't have the liberty to speak freely about their aspirations. In violence-ridden West Papua, the manner in which the conflict is framed can be a matter of life and death. Mama Loretha goes to great lengths to explain to me that this issue is not about 'M'--the code for 'Merdeka' or 'Freedom from Indonesian rule'. She and her husband, Pak Ibrahim, even meet with local police and military commanders to explain their problem and reassure the security forces that their anger and frustration centers around the company's failure to recognise and respect local indigenous people and has nothing to do with the struggle for independence.

It is not hard to understand her concern. Around the gargantuan Freeport-Rio Tinto gold and copper mine in West Papua, for example, the military have targeted local communities opposed to the mine, on the pretext that they are pro-M. The result: killings, detention without trial, torture, the destruction of homes and food gardens, hunger and a legacy of deep distrust and collective trauma. In Waisor, communities opposed to illegal and legal logging have been subject to sweepings, sadistic killings and the destruction of homes and gardens.

The pattern in West Papua is that security forces create the need for their involvement by engineering incidents. Resource extractive industries are then used as a base to wage further military operations and solidify the military's economic base. BHP Billiton has not addressed this systemic problem. In Indonesia, the military only receives 20 to 30 per cent of its budget from the government. In order to make up the short-fall, and to enrich individual soldiers, the military engages in a variety of offline budget activities: business ventures that include illegal and legal logging operations, fishing, prostitution, extortion, gun- and drug-running and trading in flora and fauna. Freeport-Rio Tinto; for example, has been widely criticised for its practice of paying the Indonesian military to provide protection for the mine. Again and again in West Papua, legitimate community concerns get reframed within the rubric of law and order, justifying repression by the security forces and guaranteeing their continued presence in order to protect companies involved in resource extraction.

On Gag Island, the problem is further complicated by the project's proximity to the Malukus, the scene of sectarian violence between Muslims and Christians and a base for the feared Muslim militia, Laskar Jihad, which has links to terrorist outfit Jeemah Islamiyah. In the last few years, Laskar Jihad have been establishing themselves in West Papua, particularly in Sorong and Fak Fak, the two West Papuan cities closest to Gag Island. Indigenous West Papuans and human rights defenders from these two regencies are scared that if the Gag Island mine goes ahead the huge influx of money created by the project could be yet another a lightening rod to deep-seated tensions simmering away under the surface--tensions that could easily be exploited by the military and their militia proxies.

In a place where conflict is rife and government weak, companies have an added responsibility to take an active role in the resolution of conflict. In Gag, this means negotiating with all parties, including neighbouring island communities. BHP Billiton needs to face the issues of land rights head on. Local communities need independent information in order to make informed decisions. The company also needs to ensure that the problems of Freeport-Rio Tinto and the military are not revisited on Gag.

If BHP Billiton decides to begin operations on Gag, it has a responsibility to tackle the concerns of local communities already affected by their presence. If the mining multinational decides to walk away, it has a responsibility to ensure that a legacy of mistrust and conflict is not handed on to the next mining player, who may be less scrupulous. Given BHP Billiton's failure to outlaw the use of STD in this marine wonderland; its lack of policy around dealing with the military; and the ongoing and unresolved complexity that still surrounds land rights issues, one can't help wondering if the company has learnt anything at all from its reckless adventurism at Ok Tedi. For the sake of local communities, the people of West Papua and a stunning marine environment, I hope I am wrong.

Contact to get involved in the Gag Island campaign.

Jason MacLeod is an activist and researcher with the Australian West Papua Association,
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Author:MacLeod, Jason
Publication:Arena Magazine
Date:Dec 1, 2003
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