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Groups call on World Bank's MIGA to deny support for destructive mine plan in Indonesia

Bank Information Center * EARTHWORKS * WALHI Indonesia

Jakarta and Washington, D.C., 12 July — Groups from around the world today called on the World Bank's Multilateral Investment Guarantee Agency (MIGA) to deny support for a controversial nickel mine planned for the island of Halmahera in Indonesia. The groups revealed the results of an independent expert's review of the Weda Bay Nickel mining project documents to debunk the project's claims of little negative impact. The review by Dr. Robert Moran, an independent water quality, geochemical and hydrogeological scientist, pointed to significant inadequacies and deficiencies in company documents and highlighted dangerous impacts including extensive water pollution risks. A separate report also noted that the project would destroy the forest habitat of endangered species in an area that was once proposed as a National Park.

Dr. Moran found that MIGA management is endorsing the project with optimistic promises and “predictions” that are based on inadequate and misleading testing and baseline data. He noted that the project is extremely risky given torrential rains and seismic events, and that waste could contaminate drinking water. The mine's plan to dump its liquid processing waste into shallow ocean waters also raised major concerns. That dumping would nearly certainly “cause significant negative impacts to the marine life and collective ecosystem in Weda Bay over the 30 to 50 year life of the operation,” maintained Dr. Moran.

MIGA requires its client, the PT Weda Bay Nickel owned by Mitsubishi Corporation (Japan), Eramet (France) and PT Antam (Indonesia) to abide by the World Bank Performance Standards for projects that it provides financial guarantees for. In the review, the independent expert illustrated how the project assessments and plans violate Performance Standards on environmental and social assessment, pollution, biodiversity, and others. “This is a key test of the World Bank's policies; if it supports such a project, it will show that the Bank's policies and action on mineral extraction remain truly flawed,” said Scott Cardiff of EARTHWORKS.

The report reinforces the earlier assertion by Indonesian mining watch groups JATAM, WALHI, KAU and KIARA that the extractive project would destroy a massive amount of Protection Forest that is the land of the Forest Tobelo Indigenous People and would threaten the livelihoods of local communities.

The MIGA Board of Directors is scheduled to deliberate on the mining companies' $207 million guarantee application for support tomorrow, July 13, 2010.

Berry Nahdian Furqon, Director of WALHI/Friends of the Earth-Indonesia reiterated Indonesian groups' call to MIGA Directors to not approve the project. He asserted that “the Board should not green light the guarantee application given that the major social, environmental and political risks are not fully reflected in the environmental impact assessment, that plans to mitigate such risks do not exist, and that safeguards requirements are violated.”

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