Bank Investments in controversial Cement Industry, Central Java

Thursday, January 1, 2015

Indonesia - The planning of construction of the mine and cement factory of Semen Indonesia Factory since 2010 had triggered social conflict due to land grabbing and community groups disunity in Rembang Regency. This is due to the unfair and transparent land acquisition process. The community is divided into Pro and Counter groups for the construction of cement factories. The issuance of Environmental Permit through a not transparent and not participatory process. It contains elements of data, documents and information manipulation. The mine which is located in Watuputih Groundwater Basin is a geological protected area (type of karst landscape) that must be protected by the government based on the legislation. There are about 49 caves scattered (4 of them are caves that have active underground rivers) around  Watuputih Groundwater Basin area. In addition, there are 109 springs scattered in this area as parental springs that flow throughout the dry and rainy seasons. Thus, the mining activities and cement factory operation will cause damage to the karst cluster. The treath of  water sources loss that support the lives and livelihoods in Rembang arise.

The consideration of risks and bad impacts of mining activities and the cement factory does not make Semen Indonesia company canceled their plan. This company actually receives investment support from Bank Mandiri for the construction of mines and cement factory in Rembang. The bank provide a non-cash loan of 1.4 billion IDR for 42 month. The construction process of the company began in June 2014 or three months after the loan decision of the bank. This bank became an important link in mining activities and cement production in the Groundwater Basin Rembang area which was clearly indicated that it was not responsible for the environment.


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