Aerial photo of the Balikpapan-Samarinda toll road construction in Kutai Kartanegara, East Kalimanan – the site of Indonesia's new capital – in August. (Antara Photo/Akbar Nugroho Gumay)

Study Reveals New Capital City Megaproject to Profit Indonesia's Oligarchs

BY :NUR YASMIN

DECEMBER 18, 2019

Jakarta. A study has revealed the names of numerous national and local politicians who would reap profits from the capital city relocation megaproject, including the brother of defense minister Prabowo Subianto, Hashim Djojohadikusumo, and the coordinating minister of maritime affairs and investment, Luhut Binsar Panjaitan.

The study, "Who Is the New Capital City For?," was conducted by a coalition of civil organizations Mining Advocacy Network (Jatam), the Indonesian Forum for Environment (Walhi), Trend Asia and Forest Watch Indonesia, and took three months to complete.

It studied oligarchic connections in the megaproject and its environmental and societal impacts.

The report revealed names of people who have assets and concessions in the extractive industries such as coal, palm oil and lumber as well as energy plants in the area in East Kalimantan where the new capital is going to be built.

It also suggested the project could be used as a smokescreen to brush off corporations' dirt for the environmental damages they have made there.

Within the 180,000-hectare area for the new so-called smart city, there are 162 mining, forestry, palm oil, coal and property concessions.

Around 158 of them are coal mines that have left at least 94 deadly-deep holes in the area.

"The corporations and the oligarchs have a chance to ensure their investments are safe with this project. Meanwhile, they ignore the fact the indigenous Paser Balik tribe had their land taken away by ITCI Hutan Manunggal in the 1960s," Jatam coordinator Merah Johansyah said at the report's launch in Jakarta on Tuesday.

The names mentioned in the report include lumber businessman Sukanto Tanoto, the owner of ITCI Hutan Manuggal; Hashim Djojohadikusumo, Prabowo's younger brother; Rheza Herwindo, the son of corruption convict and ex-House speaker Setya Novanto; Thomas Aquinas Djiwandono, the treasurer of the Gerindra Party and Prabowo's nephew; lawyer and ex-Justice Minister Yusril Ihza Mahendra; and the ubiquitous Luhut.

President Joko "Jokowi" Widodo announced the location of the new capital city, at Penajam Paser Utara in East Kalimantan, on April 29, only 12 days after he won the presidential election.

"The government never asked for approval from the people of East Kalimantan. The decision [to move the capital there] was taken 12 days after the presidential election without consulting the public. That was a crime as far as public participation in politics is concerned," Merah said.

He also said he regretted the fact that up until now the government has not been transparent about the Rp 466 trillion ($33 billion) megaproject.

Government Can Take It Back

Ex-Justice Minister Yusril had denied the allegations in the report to BBC Indonesia on Tuesday, saying the government could revoke his company's mining license anytime and have all the rights to use the land.

"If the government wants to use the land, that's their right. They can just revoke the mining license and be done with it. We can't sue the government. If we did, I know we would lose at the administrative court," Yusril said.

He said he had never heard about a "barter plan" for the mining license, but said that if it did exist the substitute should be worth at least as much as the deposit.

"If the mining deposit at a company is worth a million tons, and it's bartered with the same amount of deposit in other districts, where's the profit?" Yusril said.

Sukanto Tanoto's lumber company APRIL Group also said to BBC Indonesia that they would return their land to the government.

"We will follow orders from the government," the group's spokesman Agung Laksamana said on Tuesday.

Gerindra deputy chairman Edhy Prabowo confirmed on Aug. 27 that Prabowo and his brother Hashim own a land concession in East Kalimantan and are willing to return it to the government.

Edhy also denied the land had given Prabowo, who lost the presidential election to Jokowi, bargaining power to negotiate political settlements after the election. 

As reported by Tirto in August, the head of Bappenas at the time, Sofyan Djalil, had also denied that Luhut would profit from the megaproject.

Luhut confirmed on Feb. 26 that he held a mining license over a 6,000-hectare area in East Kalimantan, but said that the land is owned entirely by the government.

'We Want It Canceled'

Merah said the reasons that the government had given to justify the project have been weak – including fairer economic distribution and the claim that East Kalimantan is less prone to natural disasters.

"Children have died falling into holes at the mining sites. East Kalimantan has also experienced earthquakes, though not huge ones. The reasons are not logical," Merah said.

Merah suggested the Jokowi administration should cancel the project altogether.

The head of advocacy at Walhi, Zenzi Suhadi, said that if Jakarta is considered unfit as a capital city because it is prone to disasters, moving it to another region is not the solution.

"If that's the case, then the government must save the entire island of Java. It's not like the government's homework in Jakarta is gone with this project. The environment in East Kalimantan also needs to recover. It already faces many ecological burdens, including threats of tsunami, earthquakes and forest fires," Zenzi said.

Meanwhile, Jokowi visited East Kalimantan on Tuesday to decide on the location for the state palace and inaugurate the Balikpapan-Samarinda toll road.

The president played down concerns raised by the report. 

"Always thinking negatively can be a problem. We have to sell the project [of moving the capital] to other parties outside the government. The state budget cannot cover for everything," Jokowi told reporters on Wednesday. 

The president said it was the government's intention from the start for private companies to chip in to the Rp 466 trillion project. 

"This is a large-scale project with a huge budget. Let's not put all of the burden on the state budget," Jokowi said. 

 

 

 

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