Sulawesi Communities Reject Inco, Call for Renegotiation of PT Inco's Contract of Work

Jamie Kneen

National Program Co-Lead

The One Pute Jaya and Bahumotefe community lands in Central Sulawesi, Indonesia, have been staked for PT Inco's expanded contract of work area. The One Pute Jaya and Bahumotefe citizens reject PT Inco's plans to mine on their land.

Despite the citizens' protests, PT Inco has begun exploring and ravaging their lands with test pits along with practicing unfair land compensation. In early May 2001, One Pute Jaya and Bahumotefe citizens as well as several non-governmental organizations held a demonstration in front of the Local Assembly Level I in Central Sulawesi. At this time, the One Pute Jaya Declaration was read by the One Pute Jaya Village Head. The Declaration, supported by the One Pute Jaya, Bahumotefe and Bahomoahi Village heads, rejects the planned activities and existence of PT Inco in their villages.


The One Pute Jaya people are ex-transmigrants that were moved to Bungku by the Indonesian government in 1992. The One Pute Jaya citizens are demanding that they be given land certificates immediately. Thus far, the Government has failed to do so. The communities do not want to be relocated away from the fertile land that they have cultivated for over a decade and thus are adamant in their position to oppose any expansion of the mine onto their lands.

The Bahumotefe people are indigenous Bungku people who have lived on their indigenous lands for hundreds of years. PT Inco has been exploring and ravaging their lands with test pits while practicing unfair land compensation.

PT Inco is owned 58.73% by the notorious Canadian nickel mining company Inco Ltd. In 1968, Inco Ltd. signed a contract of work with the Indonesian government for 30 years. Inco Ltd. made many agreements with the authoritative Suharto regime for its mine, mill, infrastructure, dams, army support and control of indigenous people. PT Inco's current contract or work area is 218,528.99 hectares, covering the three provinces of South, Southeast and Central Sulawesi. PT Inco's plant is located in Sorowako, North Luwu Regency, South Sulawesi. Suharto was still at the helm in 1996 when PT Inco's existing contract was extended 25 years.

Inco Ltd. has a notorious track record around the world. Inco's Canadian smelters are the leading cause of acid rain in North America. A class action is also being brought forth by Canadian citizens against PT Inco for contamination of their properties with the carcinogen nickel oxide.

An ethnic genocide raged in Guatemala while Inco attempted to set up their investment there.

Inco Ltd. is currently going ahead with plans to mine in New Caledonia despite protests from local indigenous Kanak people who demand more time for a complete environmental impact analysis.


Since PT Inco's presence in the area, those communities surrounding PT Inco's operations have been victimized in various ways. The following information is a summary of such impacts.


PT Inco has forcefully evicted communities while practicing inadequate land compensation. Also, PT Inco's existence brought waves of people to Sorowako from outside the area. Many of these immigrants [with more economic purchasing power than the local indigenous people] purchased large tracts of land from local people, furthering the problem of land alienation of locals. There are also many unsettled land rights cases like the Karonsi'e Dongi community who were forced to turn away from their indigenous lands when PT Inco took over their lands. The very survival of these indigenous communities has been threatened by PT Inco.


Air Pollution

Air pollution from PT Inco operations includes smoke, soot, particulate and gaseous sulfur and ore dust. Blankets of dust are suffocating the little vegetation that remains. Air quality has been deteriorating over the past few years and Sorowako citizens need to replace the roofs of their houses because they are decaying at a rapid rate. Sorowakan residents, particularly children suffer continual bouts of flu, colds and asthma.

Land Degradation

The land surrounding the mine is riddled with test pits and bore holes and is barren. The land is former exploitation ground by the company that has yet to be adequately reclaimed or revegetated. Furthermore, the land around the mine is also impacted by illegal logging activities that have been facilitated with the mine roads and a harbor built by PT Inco.

Matano Lake Ecosystem Destruction

The Matano Lake ecosystem has been destroyed as a result of heavy dust and smoke coming from the PT Inco plant, the dumping of raw sewage and wastes from houses built on top of the lake, land erosion and sedimentation run-off from bore holes.

Larona River Ecosystem Destruction

PT Inco dammed the once beautiful Larona River in order to power its nickel smelter complex at Sorowako. The Larona dam flooded rice fields, coconut plantations and a mosque belonging to villagers who lived around Lake Towuti. The Larona Dam also prevented the migration of native eels, a major food source for villagers. The second dam built on Larona caused a drastic increase in water level of the Larona River and caused nearby villages to be flooded.

Destruction of an Ecologically Significant Area

The tropical forest area in South Sulawesi is particularly significant because it is situated on the Wallacea line. Marsupial cuscuses, macaque monkeys, hornbills and cockatoos are just a few of the animals that can be seen in the trees of Sulawesi. The area is further significant as an area rich in endemic flora and fauna species. PT Inco is taking away the habitats and polluting the environments of these species and therefore threatening the existence of these species.


PT Inco has broken promises of free health care, education, electricity, clean water services and priority in employment. Access to clean water remains a prime goal for the Sorowako citizens while those employed by PT Inco, is relatively small and they tend to occupy low status positions.


The community's health has deteriorated as a result of dust and smoke from the PT Inco plant. The residents, particularly the children suffer continual bouts of flu, colds and asthma. The company-run health center has dismissed their health problems. Independent health studies including blood and other tests are urgently needed to determine the cause of the sicknesses.


Academic studies have shown that the workload of women in villages has become heavier with the existence of PT Inco. PT Inco has taken over lands and local natural resources once used to sustain the community's livelihood and thus the women of community are forced to work harder.

The roles of women have also changed to company wives or mining-town prostitutes. These practices all encouraged and promoted by mining companies like Inco. Another sad role for local women in Indonesian mining towns is the 'contract wife'. The contract wife's marriage normally lasts for as long as the worker is contracted to work in the area. More incidents of rape and other forms of violence against women and an increasing incidence of teenage pregnancy have been reported.


PT Inco has left boreholes where cashew plantations once thrived while other agricultural crops have been destroyed. PT Inco has also rapidly and vastly destroyed forest resources and lucrative local trade items like damar [a tree resin] and rattan.


PT Inco activities threaten to destroy the traditional (adat) system that the indigenous Bungku of Bahumotefe lived by.

The company has also managed to cover up the community's protests against the removal of ancestral graves in Sorowako.

Sorowako has become a mining town and the cultural landscape has changed with incidents of alcoholism, prostitution, rape and other forms of violence against women and an increasing incidence of teenage pregnancy.


The Indonesian government has gained little in the way of royalties from the exploitation of nickel by PT Inco on its lands. PT Inco has failed to fulfill their obligations in their contract of work and memorandum of understanding. Currently, members of the local Assembly in Central Sulawesi are demanding that the Governor of Central Sulawesi take firm action against PT Inco and demand payment of taxes or else stop the operations of the company. The Governor of Central Sulawesi has sent letters of invitation to PT Inco to meet with provincial representatives but thus far PT Inco has ignored their letters of invitation. At this time, the local Assembly has asked PT Inco to attend a hearing before them. It is time for the Indonesian Government to stand firm against this company and act in the best interests of the Indonesian people, communities and the environment.

We ask the international community to support the Sulawesi communities who are struggling against the intrusion of PT Inco on their lands that have up to date violated the rights of individuals, the community and destroyed their environment.

Please inform JATAM about any action taken and/or feedback/response received.

Mining Advocacy Network
Jl. Mampang Prapatan II No. 30
RT 015 / RW 04 — Jakarta 12790
Tel. +62-(0)21-794 1559
Fax. +62-(0)21-791 81683
Email: [email protected]

Yayasan Tanah Merdeka
Free Earth Foundation
Jl. Tanjung Manimbaya IIIB,
Palu, Central Sulawesi
Tel/Fax (062-451) 425892