PRESS RELEASE
The SETARA Civil Society Coalition (Save North Kalimantan) Launches a Report Titled Green Lies, Containing Findings of Social and Ecological Violations at the Indonesia Green Industrial Zone (KIHI-KIPI) in Tanah Kuning-Mangkupadi, North Kalimantan.
Bulungan, North Kalimantan, July 15, 2024— The SETARA Civil Society Coalition, comprising NUGAL Institute, Perkumpulan Lingkar Hutan Lestari (PLHL), Greenpeace Indonesia, CELIOS, EN, and JATAM East Kalimantan, together with representatives of affected communities, held a discussion to launch the report titled Green Lies: A Portrait of Environmental Damage, Oligarchy, and Threats to Community Safety at the North Kalimantan Green Industrial Zone Project Site.
The report finds that behind the promotion of the world’s largest industrial zone project, touted as the Indonesia Green Industrial Zone (KIHI-KIPI), facts have been falsified and concealed. This misrepresentation includes the threat of environmental damage, the loss of people’s livelihoods, the exercise of power by political and business oligarchs, and various schemes to seize land and displace communities from their homes and land.
The National Strategic Project, the Green Industrial Zone managed by PT Kalimantan Industrial Park Indonesia (KIPI), claims that all industrial activities will use resources efficiently and sustainably, while reducing their carbon footprint through green technology and renewable energy from hydropower plants (PLTA). However, this report’s investigation found a different reality: the industry will require vast amounts of land, water, and energy, with its energy needs still met by coal-fired power plants (PLTU) built in the zone by PT Adaro Group—contrary to the government’s agenda to retire all coal-fired power plants.
The report also reveals that the USD 610 million in funding from the Just Energy Transition Partnership (JETP) and the Asian Development Bank’s (ADB) Energy Transition Mechanism appears hypocritical, as the government continues to tolerate coal-fired power plants in industrial zones under Presidential Regulation No. 112/2022, including plans for short-term coal-fired power plant construction at the KIHI project. Electricity demand from the petrochemical and steel industries is estimated at 11,404 GWh per year, still relying on coal and equivalent to 27.62 million tons of coal annually—or the output of 37 Mining Business Permits (IUPs) in North Kalimantan.
In addition, the industrial zone’s water needs will take 39,450,560 m³ per year from the Pindada River, Mangkupadi Tawar River, and Kayan River in Bulungan—equivalent to 1.5 years of water use for 700,000 people. Wastewater discharge is estimated at 286,439.86 m³ every four hours into several local water bodies. The report also highlights how political, legal, and business maneuvers have paved the way for the project, including revisions to the Bulungan Regency Spatial Plan (RTRW) and overlapping land use involving agricultural land, fisheries, tourism areas, and residential areas such as Kampung Baru in Mangkupadi Village, which will be evicted.
The coalition also traced the political and business actors and oligarchs behind the project. Garibaldi Thohir, Chair of the KIHI Consortium and President Director of PT Adaro Minerals Indonesia Tbk (ADMR), is set to reap substantial benefits, as part of the project land comes from a palm oil concession owned by the younger brother of State-Owned Enterprises Minister Erick Thohir. Through PT Kalimantan Aluminium Industry (KAI), PT Adaro is building an aluminum smelter and coal-fired power plant at KIHI, with a first-phase production capacity of 500,000 tons per year. KAI is owned by PT Adaro Indo Aluminium and PT Cita Mineral Investindo (CMI), a subsidiary of Harita Group, which has a history of social conflict on Obi Island, North Maluku, and Wawonii Island, Southeast Sulawesi.
Other names identified as involved include Justarina Sinta Marisi Naiborhu at PT KIPI, local oligarch Lauw Juanda Lesmana, and former Solo Mayor FX. Hadi Rudyatmo. During 2023, eight methods of land and livelihood dispossession targeting residents were identified, including changes to taxable property values, unilateral circular letters, land manipulation, criminalization, and intimidation of Kampung Baru residents.
Through this report, the SETARA Coalition and representatives of affected communities are calling for the cancellation of the green industrial project in North Kalimantan and for a comprehensive evaluation and audit using human rights, labor, and environmental protocols. The President is urged to revoke the exemption for coal-fired power plant construction under Presidential Regulation No. 112/2022. Investors, banks, and financial institutions are urged to protect their reputations by ending greenwashing practices and climate crimes and evaluating the Green Lies project.
The SETARA Civil Society Coalition, comprising NUGAL Institute, Lingkar Hutan Lestari (PLHL), Greenpeace Indonesia, CELIOS, EN, and JATAM East Kalimantan, together with representatives of affected communities, held a discussion to launch the report Green Lies: Portrait of Environmental Damage, Oligarchy, and Community Safety Threats at the North Kalimantan Green Industrial Zone Project Site.
The report reveals that behind the glitzy promotion of the world’s largest industrial zone, marketed as a Green Industrial Zone, lies systematic misrepresentation and concealment of facts. These include environmental damage, loss of community livelihoods, oligarchic political and business control, and various schemes of land and livelihood dispossession.
The National Strategic Project managed by PT Kalimantan Industrial Park Indonesia (KIPI) claims that all industrial activities and tenants will use resources efficiently and sustainably while drastically reducing carbon footprints through green technology and renewable energy from hydropower (PLTA). However, the report finds the reality to be very different: the industry will consume massive amounts of land, water, and energy, relying on coal-fired power plants (PLTU) built by PT Adaro Group, contradicting the government’s plan to phase out coal plants.
Funding of USD 610 million from the Just Energy Transition Partnership (JETP) and the Asian Development Bank’s Energy Transition Mechanism is criticized as hypocritical, given that the Indonesian government still allows coal-fired plants in the industrial zone through Presidential Regulation No. 112/2022. Electricity needs from petrochemical and steel industries are projected at 11,404 GWh per year, consuming 27.62 million tons of coal annually–equivalent to production from 37 coal mining licenses across North Kalimantan.
Water requirements will deplete 39.45 million m³ per year from the Pindada, Mangkupadi Tawar, and Kayan rivers, enough for 1.5 years of consumption for 700,000 residents. Wastewater discharge is estimated at 286,440 m³ every four hours into local rivers. The report also highlights political and legal maneuvers that enabled the project, including three revisions to the Bulungan Regency Spatial Plan (RTRW), causing severe overlap with fisheries, coastal tourism, agriculture, and residential areas, such as the forced eviction of Kampung Baru, Desa Mangkupadi.
The report identifies the key actors and political-business oligarchs behind the project. Garibaldi Thohir, Chair of the KIHI Consortium and President Director of PT Adaro Minerals Indonesia Tbk (ADMR), is positioned to benefit most, as much of the land belongs to a palm oil concession owned by the brother of State-Owned Enterprises Minister Erick Thohir. PT Adaro, through PT Kalimantan Aluminium Industry (KAI), is constructing an aluminum smelter and coal-fired plant at KIHI, with an initial production capacity of 500,000 tons per year. KAI is jointly owned by PT Adaro Indo Aluminium and PT Cita Mineral Investindo (CMI), a subsidiary of Harita Group, which has a history of social conflict in Obi Island, North Maluku, and Wawonii Island, Southeast Sulawesi.
Other key figures include Justarina Sinta Marisi Naiborhu (PT KIPI), local oligarch Lauw Juanda Lesmana, and former Solo Mayor FX. Hadi Rudyatmo. Throughout 2023, eight additional mechanisms for land and livelihood dispossession were identified, including unilateral changes to tax valuations, land transaction manipulation, and criminalization and intimidation of Kampung Baru residents.
Through this report, SETARA and affected communities urge the cancellation of the so-called green industrial project in North Kalimantan and call for comprehensive evaluation and audits based on human rights, labor, and environmental protocols. The President is urged to revoke exemptions allowing coal-fired plants under Presidential Regulation No. 112/2022. Investors, banks, and financial institutions involved are called upon to protect their reputations by disengaging from greenwashing practices and climate crimes and to reassess the Green Lies project.
Contact Person / Contact Details, SETARA Coalition (Greenpeace, Jatam East Kalimantan, Nugal Institute, Enter Nusantara, PLHL, CELIOS):
Seny, Campaigner, NUGAL Institute: 0859-5479-4928
Bondan Andriyanu, Greenpeace Indonesia: 08118188182
Aray, PLHL North Kalimantan: 082254668386