by FOEI, TNI, IGJ, Focus (updated by bilaterals.org)
The Indonesian region of East Kalimantan is said to contain the second largest and the world’s seventh-largest undeveloped coal resource. Coal is the most polluting of all fossil fuels, releasing more methane and carbon dioxide than any other form of energy production. Despite the fossil fuel industry’s continued push for coal as a preferred energy source, coal consumption has dropped rapidly since 2012, backed by economic imperatives and environmental evidence.
British mining corporation Churchill Mining holds 75% of the stakes in the East Kalimantan coal mining project. The construction of the mine was expected to begin in 2010. But local authorities revoked the company’s mining licences for a variety of reasons including alleged forgery of the licences.
Churchill Mining and its Australian subsidiary Planet Mining claimed that Indonesia had unlawfully revoked mining licenses and began international investment arbitration cases against the Government of Indonesia in 2012. Both claims rely on UK-Indonesia and Australia-Indonesia bilateral investment treaties. The companies are demanding 1.3 billion USD in compensation, yet they had only invested 40 million USD in exploration and exploitation.
The billions in compensation demanded by Churchill Mining is almost equivalent to Indonesia’s budget allocation of subsidies for food in 2015. It is also more money than the value of the government’s subsidies for seed for farmers, subsidies for small and medium enterprises and subsidies for public transportation combined.
In June 2015, the Indonesian Government withdrew the forgery claim against Churchill, blaming instead Churchill’s former local partner.
In December 2016, the tribunal confirmed that the documents presented by the company were forged. The costs of the arbitration are estimated to have reached over US$10 million.
In April 2017, Churchill called for the annulment of the decision but the proceedings were dismissed by the tribunal in March 2019.
Last update: April 2021