JAKARTA, Indonesia. The development of an expansive industrial park on the lush island of Borneo, drawing significant foreign and domestic investments, is raising environmental concerns in a region inhabited by endangered species. An environmental impact assessment, commissioned by one of the project’s developers and reviewed by The Associated Press (AP), has revealed that the Indonesian showcase project will initially rely on coal power, though this information has not yet been made public.
This ambitious project, championed by President Joko Widodo, underscores Indonesia’s struggle to strike a balance between capitalizing on its abundant natural resources and meeting its environmental commitments.
The environmental impact assessment, ordered by PT Kalimantan Industrial Park Indonesia, which manages a substantial portion of the ongoing development, sheds light on activities within the 15,000-hectare (32,100-acre) site. Here, heavy machinery clears trees and paddy fields, sending dust billowing into the sky along the Celebes Sea.
The assessment highlights that the coastal zone within the project area serves as a conservation and migration area for endangered species such as green turtles, hawksbill turtles, and killer whales. Hawksbill turtles are critically endangered according to the International Union for Conservation of Nature, while green turtles are considered endangered.
Erwin, a local fisherman, expressed concern about the constant ship traffic in the area, stating, “We are looking for fish further and further away from the beach because there are lots of ships in the area driving fish away.” He added that the industrial park’s development could impact his income.
The Kalimantan Industrial Park is designated as a “national strategic project” aimed at positioning Indonesia as a significant producer of strategic resources. Plans entail doubling its size to approximately 30,000 hectares (74,130 acres), potentially making it one of the world’s largest industrial zones.
Indonesian President Joko Widodo remarked during a February 2 visit to the project, “This is the largest green industrial park in the world, and this is the future of Indonesia. If this is realized well, everyone will flock here, and any industry related to green products will definitely look to this area.”
Indonesia is the world’s largest nickel producer and possesses substantial reserves of aluminum, tin, and copper, essential materials for green energy technologies like electric vehicle batteries and solar panels. To bolster its industrial capacity, the country has curtailed the export of most raw materials, requiring domestic processing. The Green Industrial Park is an extension of this ambition.
As the demand for critical materials rises amid the transition to cleaner energy, numerous countries grapple with the dilemma of exploiting their natural wealth while adhering to environmental goals. Aimee Boulanger, Executive Director of the Initiative for Responsible Mining Assurance, emphasized this tension in countries like Chile, the United States, Brazil, and others involved in mining these materials.
The project’s blueprint outlines the establishment of an aluminum smelter for electric vehicles and various factories for petrochemicals, electric vehicle batteries, and materials used in solar panels. A port will facilitate the transportation of materials and goods to and from the zone.
Approximately $132 billion is required for the park’s development, according to Luhut Binsar Pandjaitan, the coordinating minister for Maritime Affairs and Investment. Indonesian officials have embarked on global roadshows to attract investors from the United States, European Union, United Arab Emirates, and China.
Several companies participating in the project, including Hyundai, CATL, Fortescue, and Adaro, have committed to ending their reliance on fossil fuels and reducing carbon emissions in their supply chains.
Critics argue that the inclusion of coal-fired power plants in the project contradicts Indonesia’s climate goals, despite allowances for such plants under a presidential decree for national infrastructure projects like the Kalimantan industrial park.
Market Forces, an Australian financial watchdog focused on climate finance, reported that two major banks, DBS Singapore and Standard Chartered, have withdrawn funding for Adaro’s smelter project, citing their commitments to halt financing for new coal-fired power assets.
Industrial parks, according to Binbin Mariana, a campaigner at Market Forces in Indonesia, should not rely on new power generation from fossil fuels. Mariana believes that the withdrawal of funding for the smelter sends a strong signal that the project does not align with green principles.
Residents in the area have voiced concerns about land seizures and pressure from local officials to relocate at unfair prices. Some hope the project will bring jobs but fear the loss of their traditional livelihoods as fishermen, farmers, and eco-tourism hosts, with dust and ash smothering their fields.
An analysis by the Center of Economic and Law Studies (CELIOS) of PT KIPI’s environmental impact assessment predicts that problems will worsen once the project becomes operational, affecting water quality, fisheries, and tourism.
In conclusion, the development of the industrial park on Borneo raises environmental and social concerns, as it initially relies on coal power, impacting an area of conservation and endangering local livelihoods. The project highlights the global challenge of reconciling economic development with environmental preservation in the face of rising demand for critical materials in clean energy technologies.
Gary P Hernal started college at UP Diliman and received his BA in Economics from San Sebastian College, Manila, and Masters in Information Systems Management from Keller Graduate School of Management of DeVry University in Oak Brook, IL. He has 25 years of copy editing and management experience at Thomson West, a subsidiary of Thomson Reuters.
