December 10, 2019

Seribu Lara Coal PLTU: Banks Must Be Responsible

Talking about human rights violations is synonymous with big narratives about war, oppression, and conflict. In fact, every aspect of daily life is also closely related to the fulfillment of human rights. In the business sector, human rights are not only related to the company's internal aspects related to workers' rights (decent work, social security, the right to associate, and freedom from discrimination) but also external impacts on the environment and society caused by company operations.


Examples of cases of human rights violations related to the company's business practices can be seen in the construction of a coal-fired Steam Power Plant (PLTU) in Cirebon, West Java, Indonesia by Cirebon Power. The Cirebon Unit 2 PLTU Expansion Project is a continuation of the Cirebon PLTU with a capacity of 660 MW which has been operating since 2012.


Fossil energy power generation is not only a threat to the planet because it accelerates climate change, but also to humans who are exposed to pollution and waste from burning coal. Not only reducing the quality of health, environmental degradation caused in the form of loss of biodiversity and soil-water-air pollution around the power plant in the end also threatens the livelihoods of farmers, fishermen, and salt farmers who depend on nature for their lives.


Furthermore, this project was also considered problematic because it did not go through an adequate FPIC process that involved the affected communities so that it was colored by various protests and demonstrations. This project has also been subject to lawsuits for violating the Spatial and Territorial Plan and having problems with licensing. In fact, this licensing issue also led to corruption and bribery cases involving former Cirebon Regency officials and Hyundai Engineering & Construction as the PLTU contractor.


The Fair Finance Guide Japan study in December 2019 also found that the financing of the Cirebon PLTU construction was by a syndicate of international financial institutions such as JBIC Japan, Export-Import Bank of Korea (KEXIM), The Bank of Tokyo Mitsubishi UFJ, Ltd, Mizuho, ​​Sumitomo Mitsui Banking Cooperation, ING Bank violates international norms such as the Equator Principles, IFC Performance Standards, UN Global Compact, and OECD Guidelines for Multinational Enterprises.


It is time for financial institutions to take responsibility for the environmental and social impacts that arise as a result of the investments they make. It is time for financial institutions to take part in respecting human rights. It is time for financial institutions to take advantage of the global momentum to drive the energy transition, now is the time to stop financing dirty energy #StopCoalFinancing!


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