Indonesian Environmentalists Seek Meeting with Chinese Bank over Sumatra Dam Project

Ahmad Syamsudin
190320_ID_ChinaDam_1000.jpg An activist in an orangutan costume takes part in a protest outside the Chinese consulate in Medan, Indonesia, against the construction of a dam that environmentalists fear will damage the habitat of an endangered orangutan species, March 1, 2019.

Indonesia’s leading environmental group said Wednesday it was seeking a meeting with Bank of China representatives to discuss a Chinese-funded dam project in North Sumatra province that, activists and scientists warn, could threaten the world’s rarest orangutan species.

The Indonesian Forum for the Environment (Walhi) asked for the meeting after officials from the bank, which is financing the U.S. $1.6 billion hydropower project, announced they would evaluate it in response to concerns raised by conservationists.

The bank’s move was encouraging but direct talks were critical for reaching a common understanding of the issue, said Dana Tarigan, Walhi’s executive director for North Sumatra.

“Many of the environmental, social and biodiversity risks are fairly complex, and so we hope a meeting can help clarify and dispel common misconceptions regarding the dam’s real impacts,” Dana told BenarNews.

PT North Sumatra Hydro Energy (NSHE), an independent power producer in which China’s ZheFu Holding Group owns a majority stake, is building the 510-megawatt hydropower dam in the Batang Toru rainforest on Sumatra Island.

The plant will divide the habitat of about 800 Tapanuli orangutan and increase the risk of their extinction, environmental groups and scientists have said.

The Batang Toru Ecosystem is the only known home to the Tapanuli orangutan, which was discovered in 1939. It has been identified as a distinct species, and was recently listed as a critically endangered by the International Union for Conservation of Nature.

PT North Sumatra Hydro Energy denied that the project would threaten protected animals.

Dana said Bank of China had sent an email to Walhi last year promising to investigate the concerns raised by environmentalists, but the bank had never informed the group of the findings.

“We hope that we will get firm answers, not just normative platitudes from officials of the Bank of China,” he said.

“We appreciate the statement, but it’s meaningless if construction is going ahead,” he added.

Construction would destroy some of the most critical low-altitude habitats of the orangutans, cutting the connection between the eastern and western block of the habitat, according to Erik Meijaard. He directs the conservation program at Borneo Futures and is a professor at the Center of Excellence for Environmental Decisions at the University of Queensland in Australia.

Bank of China could not be immediately reached for comment. But a statement on its website that was posted on March 4 said officials had taken “note of the concerns expressed by some environmental organizations about the hydroelectric dam project.”

“We attach great importance to corporate social responsibility in our global operations and ensure that our business activities abide by local laws and regulations. We are committed to supporting environmental protection globally and upholding the principles of green finance,” the bank said.

“Bank of China will evaluate the project very carefully and make prudent decisions by duly considering the promotion of green finance, the fulfilment of social responsibility as well as the adherence to commercial principles,” the statement went on to say.

Project expected to be finished in 2022

Part of Beijing’s One Belt, One Road (OBOR) plan, the project in the Sumatra rainforest underscores how China’s global infrastructure drive can threaten the environment, said Bill Laurance, director of the Center for Tropical Environmental and Sustainability Science at James Cook University, which is also in Queensland.

The director general for electricity at Indonesia’s Energy and Mineral Resources Ministry, Rida Mulyana, said the project was on track to be completed by 2022, local media reported over the weekend.

The project has attracted criticism from environmentalists worldwide, as China’s aims to link Beijing with Asia, Europe and Africa by building massive highways, railways, ports and other infrastructure under OBOR.

The Alliance of Leading Environmental Researchers and Thinkers (ALERT), led by Laurance, sent a letter to Indonesian President Joko “Jokowi” Widodo last year, urging him to stop dam-related development in the orangutan habitat.

Earlier this month, a provincial administrative court in North Sumatra rejected a petition filed by Walhi demanding that the permit for the project be revoked. The court ruled that construction could proceed.

NSHE said the plant would cover an area of 122 hectares (301 acres), or only 0.07 percent of the Batang Toru ecosystem.

Only a small part of the project area is in the home range of up to seven orangutans, it said.

The project is backed by the China Export & Credit Insurance Corp., also known as Sinosure, a major Chinese state-owned enterprise, and the Bank of China. Beijing-based engineering firm Sinohydro hydropower has been awarded the contract to build the dam.

The hydropower plant is one of the priority projects under the Jokowi government’s drive to upgrade the country’s infrastructure. Jokowi is up for reelection in mid-April.

The hydropower plant is not the only China-funded project that has triggered controversy in Indonesia.

Greenpeace blamed the Celukan Bawang coal-fired power station in Bali, a U.S. $700 million project built by China Huadian Corp., for “poisoning” the island that is a top tourist destination in the country.

In August, a court threw out a lawsuit brought by Greenpeace and local people against Bali’s governor and the company, ruling that the local government’s decision to issue a permit for the project was lawful.


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