Cirebon Coal Plant Unit 2, Indonesia: Residents Submit Opinion "JBIC Must Suspend Loan and Reexamine Examiner's Findings"

With regard to Cirebon coal-fired power plant Unit 2 (1,000 MW) in Indonesia, which was invested by Marubeni and JERA (a joint venture between TEPCO and Chubu Electric Power Company) and financed by the Japan Bank for International Cooperation (JBIC; 100% owned by the Japanese government) and three mega banks (MUFG, Mizuho, and SMBC), a group of local residents filed an objection to JBIC, pointing out violations of the “JBIC Guidelines for Confirmation of Environmental and Social Considerations" (the Guidelines).

The investigation by the JBIC Examiners for Environmental Guidelines (Examiners) was suspended due to the ongoing lawsuits by residents and NGOs in Indonesia, as well as the impact of the COVID-19 pandemic. In the Examiners’ report (dated September 5, 2022), which was finally made public on November 25, 2022, the Examiners concluded that “there was no violation of the JBIC Guidelines."

However, prior to the release of this report, the resident group that filed the objection has already submitted a written opinion (dated November 8, 2022) in response to the report, as follows. The written opinion describes in detail that “the examiner’s understanding, investigation, and verification were extremely inadequate," and requests the Examiners to re-examine the specific issues, as well as to request JBIC to once again suspend the financing.

In addition to the severe environmental and social impacts on the local community, Cirebon Unit 2 leaves a pile of problems unresolved, including the ongoing investigation of bribery by the Indonesian Corruption Eradication Commission and worsening of the climate crisis. Amid recognition of the need for the early closure of the adjacent Cirebon coal-fired power plant Unit 1 (660 MW), the Japanese public and private sectors are being urged to make a sincere effort to keep the test-running Cirebon Unit 2 from starting operation.

Below is the resident group’s written opinion (English translation) to the JBIC Examiners.

Opinion on the Report of the JBIC Examiners regarding the Cirebon Coal-fired Power Plant Project – Unit 2 in West Java, Indonesia

> Full Text of Opinion, English Translation (PDF) / Full Text of Opinion, Original in Bahasa Indonesian (PDF) / Full Text of Opinion, Japanese Translation (PDF)

November 8, 2022

To:
Ms. OKU Mami
Mr. SASE Hiroshi
The Examiners for Environmental Guidelines
Japan Bank for International Cooperation (JBIC)
(Mr. HOSHINO Kazuaki and Mr. TOYONAGA Shinsuke, the Former Examiners)

Cc: Mr. HAYASHI Nobumitsu, Governor, JBIC

Opinion on the Report of the JBIC Examiners regarding the Cirebon Coal-fired Power Plant Project – Unit 2 in West Java, Indonesia

We have read the “Examination Report on Objection to Cirebon Coal-fired Power Plant Project – Unit 2, West Java, Indonesia" (the Report), and are very disappointed and even resentful.

First of all, JBIC’s objection procedure is supposed to be a kind of remedy for residents who have been damaged by projects in which JBIC is involved. However, due to the fact that the Examiners for Environmental Guidelines (the Examiners) has so disregarded the testimonies of residents like ourselves, and has analyzed and judged, focusing on so-called “comity" to the Indonesian government, we can’t help but wonder for whom this objection procedure was created. Neither the examiners nor JBIC should forget that they are addressing the environmental, social, health, and cultural issues of the same human beings, whether in Japan or in Indonesia.

The report also states that “As a result of our investigation, we could not find that the actual damages stated by the Requesters have been incurred or that is likely to be incurred in the future. In addition, no violations of the Environmental Guidelines by JBIC were found.” However, we believe that the examiner’s understanding, investigation, and verification were extremely inadequate, as described in the opinion in the table below.

We would appreciate it if you could review our opinions compiled below, re-examine whether JBIC has properly confirmed the environmental and social considerations with respect to the specific issues raised by us in our objection letter, and reconsider the status of compliance with the Guidelines on the issues pointed out.

Finally, we reiterate our strong request to JBIC not to provide further financing for Cirebon Unit 2 in order to avoid worsening the environmental and social impacts on our community.

Opinions on individual contents of the report

*Please see the table of “Opinions on individual contents of the report" of the same opinion in PDF.
　> Full Text of Opinion, English Translation (PDF)