Letter to Major Vale's Shareholders regarding the Expansion Plan of Sorowako Nickel Project, Indonesia: "Responses must be taken with respect for the community's right to refuse exploration and mining."

Development10.24.2024

FoE Japan, together with WALHI (Indonesian Forum for the Environment) South Sulawesi, WALHI and Pacific Asia Resource Center (PARC), since August 2023, has continuously urged the major shareholders of PT Vale Indonesia (PTVI) (Sumitomo Metal Mining, Norwegian Government) and the main shareholders of Vale, the parent company of PTVI (Capital Group, Previ, Mitsui, and BlackRock) to properly engage with PTVI/Vale so that PTVI/Vale take prompt and appropriate action to protect the human rights of local communities affected by the Sorowako nickel project.

In particular, since February 2024, we have emphasized that conditions are still not in place for PTVI to resume exploration activities, much less mining activities, in the Tanamaria Block, and have requested that the major shareholders engage PTVI/Vale to take appropriate action so that exploration and mining activities are not conducted in a manner that is not in line with international standards.

Meanwhile, in April 2024, Vale posted information on “PTVI Social & Environmental impacts, Indonesia” on the “ESG Controversies” page of its website. It has also recently published a summary of the investigation report on human rights situation by a consultant commissioned by Vale Base Metals (VBM) in late 2023, and PTVI’s action plan in response to the consultant’s recommendations.

However, PTVI’s approach to addressing the issues related to the Tanamaria Block, as proposed in the Action Plan, does not solve the problem, but rather exacerbates tensions on the ground and leads to more conflict and division of the community. For example, PTVI has proposed in its Action Plan to develop a resettlement plan, but this is not a solution because the pepper farmers and women neither seek compensation or relocation in the first place. The farmers and women who have been cultivating pepper in the Tanamaria Block have been earnestly desiring a review of the development/exploration, but PTVI has not offered a fragment of consideration to these demands.

In response to this situation, on October 23, 2024, FoE Japan again together with WALHI South Sulawesi, WALHI, and PARC submitted a letter to the major shareholders of PTVI/Vale, urging them to continue encouraging PTVI/Vale to take the pepper farmers and women’s demands into consideration and exclude the Tanamalia Block from PTVI’s mining concession.

For more information, please see the following letter of request. (Click here for PDF)

Re: Call for action to urge PT Vale Indonesia/Vale not to neglect but respect the views of the community in the Loeha Raya area in the Sorowako nickel project/Tanamalia block and to take action that is not premised on exploration and mining

October 23, 2024

To: Investors holding shares in Vale / PT Vale Indonesia

Since August 2023[1], we have continuously called on you, one of the major investors in PT Vale Indonesia (PTVI)/ Vale, a parent company of PT Vale Indonesia (PTVI), to properly engage PTVI/Vale so that you can prevent yourself from being complicit in the human rights abuses committed by PTVI in the Sorowako Nickel Project in East Luwu, South Sulawesi, Indonesia.

In particular, since February, 2024[2], we have emphasized that conditions are still not in place for PTVI to resume any exploration activities, much less start commercial mining activities in the Tanamalia Block. More specifically, we have pointed out that PTVI has failed to have the opportunity for appropriate, meaningful, and interactive meetings with women as well as farmers cultivating pepper in Loeha Raya, and that PTVI has violated several points of the World Bank Group’s International Finance Corporation (IFC) “Performance Standards on Environmental and Social Sustainability” (PS), with which Vale claims to comply regarding resettlement and compensation measures.

Meanwhile, in April 2024, Vale posted information on “PTVI Social & Environmental impacts, Indonesia” on the “ESG Controversies” page of its website[3]. The information seems to have been updated just recently, publishing a summary of the investigation report (July 2024)[4] by a consultant commissioned by Vale Base Metals (VBM) in late 2023, and PTVI’s action plan (undated)[5] in response to the consultant’s recommendations. It is our belief that PTVI/Vale with their claims for transparency and responsible business conduct has provided shareholders like yourselves with this information.

However, we hereby vehemently argue that PTVI’s approach to addressing the problems with regards to the Tanamalia Block, as proposed in the action plan, does not solve the problems but rather exacerbates tensions on the ground and leads to more conflict and division of the community. Community members have been earnestly desiring a review of the development/exploration, but PTVI has not offered a fragment of consideration to these demands.

The pepper farmers and women of Loeha Raya have consistently expressed their claim to resist PTVI’s activities in the Tanamalia Block[6]. The farmers’ earnest desire is for PTVI to exclude the Tanamalia Block from its mining concession, where their pepper fields – their vital means of livelihood – are located. It is clear that any activity by PTVI that lacks respect for these claims by local communities will take place without a Social License to Operate (SLO) and fail to solve the problems. In addition, the development of a “Land Acquisition and Resettlement Framework” (LARF), as proposed in the PTVI’s action plan, cannot be a solution for the pepper farmers who neither seek compensation or relocation, even if its contents would be developed in line with international standards.

In fact, PTVI consistently has failed to achieve any appropriate, meaningful, and interactive meeting with the local community. As described in the attached letter to PTVI from the Loeha Raya Pepper Farmers Association and the Women Fighters of Loeha Raya (submitted to PTVI on October 14, 2024[7]), PTVI held a discussion on October 2, 2024 regarding the resumption of exploration activities in the Tanamarlia Block. However, the lack of transparency and the closed-door approach by PTVI have further increased the distrust of the pepper farmers toward PTVI.

In the same letter, the pepper farmers and women demand that PTVI stop all forms of activities in the Tanamalia Block and vacate the camps where exploration activities are based, reiterating that they reject exploration and mining in the Tanamalia Block. It also clearly states that the pepper farmers and women do not want to be relocated, compensated, or provided with “CSRs”.

PTVI must immediately review its response which is based on the premise of continuing exploration and implementing mining in the Tanamalia Block. What is required now is to first accurately understand the claims of the pepper farmers and women of Loeha Raya as described in their letter attached herewith, respect their right to refuse exploration, and then take actions in a manner that does not preclude the option of not developing the area.

Reiterating our previous statements, with regard to PTVI’s exploration and mining activities in the Tanamalia Block, the pepper farmers and women of Loeha Raya have continuously voiced their concerns over the loss and impacts on their livelihoods and have never expressed their consent to the exploration and mining activities. Therefore, we urge you to continue encouraging PTVI/Vale to take their demands into consideration and exclude the Tanamalia Block from PTVI’s mining concession. The modest ask of the communities is to live in peace without fear.

Furthermore, the failure of PTVI’s discussion on the ground last October 2 may lead to intensified involvement of the police, military and other authorities again. We again request that you, as one of the major shareholders of PTVI/Vale, engage with PTVI/Vale to urge it to take appropriate action so that you are not complicit in the violation of fundamental human rights, including the freedom of expression of the local community.

WALHI South Sulawesi
Wahana Lingkungan Hidup Indonesia (WALHI / FoE Indonesia)
Friends of the Earth Japan
Pacific Asia Resource Center, Japan

Attachment:

“Pernyataan Sikap Masyarakat Loeha Raya” (Oktober 8, 2024)
“Statement of Position of Loeha Raya Community” (October 8, 2024) (English translation)

Contact:
WALHI South Sulawesi (Muhammad Al Amin, Executive Director)
Add: JL. Aroepala, Kompleks Permata Hijau Lestari Blok Q1, No.8, Rappocini, Kota Makassar, Sulawesi Selatan 90221
Email: muhammad.al.amien@gmail.com / walhisulsel@gmail.com
Tel: +62-8229-3939-591

Friends of the Earth Japan (Hozue Hatae, Development Finance and Environment Team)
Add: 1-21-9 Komone, Itabashi-ku, Tokyo, Japan 173-0037
Email: hatae@foejapan.org
Tel: +81 3 6909 5983

[1] https://foejapan.org/en/issue/20230818/13949/

[2] https ://foejapan .org /en /issue /20240227/16345/

[3] https://vale.com/esg/controversies

[4] https://vale.com/documents/d/guest/ptvi-investigation-public-report-_-20240730

[5] https://vale.com/documents/d/guest/human-rights-commitment-and-action-plan

[6] https://walhisulsel.or.id/4354-konsisten-menolak-vale-masyarakat-blok-tanamalia-tegas-tolak-fasilitas-tambang-milik-pt-vale-indonesia/

[7] https://walhisulsel.or.id/4470-sending-letter-to-pt-vale-indonesia-apl-asks-to-vacate-nickel-mining-exploration-camp-in-tanamalia/