EARTHWORKS

World Bank approves destructive mining project in Indonesia

July 14, 2010

International coalition condemns MIGA support for Weda Bay Nickel mine

JOINT PRESS RELEASE:
Bank Information Center * EARTHWORKS * WALHI Indonesia

Jakarta and Washington, D.C., 14 July -- An international civil society coalition today condemned the World Bank for approving support for a destructive nickel mine that would displace Indigenous Peoples, destroy vast areas of intact tropical forest, and threaten rivers and the ocean with sediment and toxic chemicals. The Board of Directors of the World Bank Group yesterday approved a guarantee by the Bank's Multilateral Investment Guarantee Agency (MIGA) for the Weda Bay Nickel mine. Of the 23 Executive Directors of the World Bank, only the US Director abstained from the vote. Indonesian-based WALHI and DC-based EARTHWORKS and Bank Information Center joined JATAM, KIARA, KAU and other Indonesian groups today in declaring that the approval of a $207 million guarantee application for a risky and damaging nickel and cobalt mine demonstrates the fundamental flaws of the World Bank's procedures, polices, and practices on extractive industry.

"MIGA may rejoice in their offices in DC at having this new project headed out the door, but for us the approval means the MIGA management and the Board support the destruction of intact tropical forest on Indigenous Peoples' land, and use of use taxpayers' money to fund environmental and human destruction by mining companies," stated Berry Nahdian Forqan, National Executive Director of WALHI.

The World Bank's Directors approved the guarantee in spite of opposition by community groups in Indonesia, in spite of the major impacts of the project, and in spite of flaws in project assessment documents. A review by independent hydrogeologist Dr. Robert Moran released on July 12 noted that the mine would have severe consequences on communities and the environment and that the project assessments and plans violated the World Bank's own environmental and social policies. The report reinforced the concerns of Indonesian groups that the mine project would destroy a massive area of protected forest and lands of the Forest Tobelo Indigenous People, and would threaten the livelihoods of local communities.

"MIGA has succeeded in its role as spokeperson of the company client," said Riza Damanik, Secretary General of KIARA, an Indonesian fisherfolk network. "Rather than ensuring due diligence, MIGA has acted in defense of the PT Weda Bay company, deceiving the Board with optimistic promises and predictions based on the flawed and inaccurate technical data supplied by the client, telling the World Bank Board that it has done the appropriate due diligence, and portraying civil society as misinformed," maintained Damanik.

"MIGA is willing to compromise its own standards, downplay independent and informed reviews, and pretend that the investment makes negligible impacts based on the poorly developed safeguard documents and sanitized environmental impact summaries," asserted Hendrik Siregar of Indonesian Mining Advocacy Network JATAM.

Mining companies ERAMET, Mitsubishi, and PT Antam have proposed the Weda Bay Nickel mine on Halmahera in Indonesia. Most of the area scheduled to become roads and nickel mine pits is Protection Forest that was previously proposed to be part of a National Park and is in the proposed buffer zone of the Aketajawe-Lolobata National Park. The forests are habitat for protected and endangered species like the Chattering Lory and a Hopea tree species. The mine would segment the lands and threaten the livelihoods of the Forest Tobelo and other communities in the area. The project, located in a seismically active area with torrential rainfall, would also dump effluent water from its mineral processing into the ocean in relatively shallow water not far from coral reefs.

"It is unacceptable for the World Bank and MIGA to continue to support mining projects with such potential for devastating impacts on Indigenous Peoples and sensitive tropical environments," said Scott Cardiff of EARTHWORKS.

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