Indonesian Farmers Seek to Stop Cement Plant

Dozens of women who have taken turns staging a heated protest – their feet encased in cement “shoes” – at the State Palace in Jakarta against the construction of a central Java cement factory have been catapulted to national attention after one of the women died of a heart attack. The plans for the factory are proceeding even though both President Joko Widodo and the Supreme Court have nixed it and the country suffers from serious overcapacity.

The women, farmers from a Central Java province 540 km from Jakarta, have fought in the courts for years before deciding that they should take their campaign to the capital, sitting quietly but stubbornly in front of the palace.

Central Java Governor Ganjar Pranowo— a member of President Joko Widodo’s Indonesian Democratic Party of Struggle – has ruled to permit the state-owned cement maker PT Semen Indonesia to build a factory in their area even though Indonesia’s Supreme Court recently ruled in favor of the farmers against the project.

The death of Patmi, 48, one of the activists after an eight-day protest in front of the place has pushed activists and NGOs to increase their resistance against the project. Various elements of students and environmental activists have since joined the protest. They have vowed to continue their protest until Jokowi, as the president is universally known, instructs Pranowo to revoke the government’s environmental permit for Semen Indonesia.

"The death of Bu Patmi is the moment for all of us to step up the struggle to preserve the environment in Central Java,” said Jakarta Legal Aid Institute (LBH Jakarta) director Alghiffari Aqsa in a public statement.

Agrarian Reform Consortium (KPA) Secretary General Dewi Kartika said activists would continue to demand action against Pranowo, who was said to have violated the President’s instruction last August ordering Semen Indonesia to cease its activities until an environmental assessment for mining activities in the Kendeng Mountain area was completed.

Gunarti, who had participated in rallies since March 13, finally met briefly with Jokowi with her brother, Gunarso and several other members of the Indigenous People’s Alliance of the Archipelago last month. She said the president’s response to her complaint was a shock.

“The President told me that it was not him who had the authority to issue a license [for the construction of the cement factory] but the governor,” Gunarti was quoted by The Jakarta Post. “He also told me not to report everything to him and instead asked me whether or not I had met with the governor,” she added.

Gunarti said she had expected to use the rare opportunity to tell the president, whose image as “the man of the small people” won him the presidency in 2012, of her disappointment with Pranowo’s decision to reissue the license for the Rembang area factory.

“We have met our governor many times, but nothing has changed. That’s why we have been holding a rally in Jakarta for days. We hoped that the President, who holds the highest authority in this country, could make a positive difference,” Gunarti said, breaking into tears.

According to the Indonesia Cement Association (ASI), domestic consumption in 2016 stood at 62 million tonnes, below the national target of 65 million tonnes. Indonesia is currently the largest cement market in the Asia-Pacific region, followed by Vietnam (55.7 million tonnes), South Korea (49.6 million), Japan (43 million), and Thailand (29 million). Also in terms of annual installed cement production capacity, Indonesia is the largest in this region with a capacity of around 100 million tonnes.

However, a simple calculation shows that the cement industry is plagued by major oversupply, with annual production capacity 62 percent below the 100 million tonne mark. Therefore, ASI has requested the central government to support existing cement producers by temporarily disallowing permits for construction of new cement plants across Indonesia.

ASI Chairman Santoso said overcapacity of 20 percent would still be manageable. However, if it touches 40 percent as is the case today, it would create a major problem for existing cement players, possibly leading to a price war that would result in declining earnings for existing players. Thus the economic justification for a new Semen Indonesia plant in the farmers’ area is nonexistent.

According to data from the Indonesian Industry Ministry, investment in Indonesia's cement industry stood at around US $1.1 billion in 2016 on investment by both local and foreign players.

Since taking office three years ago, Jokowi has been known for his affinity for building infrastructure projects in the vast archipelago nation. Despite a lack of funding, Jokowi has gone ahead with his plans and invite more foreign funding, mostly from the Chinese government as well as via a tax amnesty program, leading environmental critics and observers to repeatedly warn that Jokowi’s appetite for construction might clash with farmers and local land owners.