A new investigation has revealed myriad problems plaguing the resettlement and compensation process for Indigenous Sasak families affected by a tourism development project on the Indonesian island of Lombok.
According to the report by local and international NGOs, the project has impoverished the communities, who have been forced to resettle far from their coastal homes without being properly consulted from the beginning.
Despite the numerous human rights violations, the project’s main funder, the Asian Infrastructure Investment Bank (AIIB), and the project’s developer, the state-owned Indonesian Tourism Development Corporation (ITDC), insist to conclude the resettlement process in September.
Activists have called on the AIIB and ITDC to not rush the process without properly consulting with affected communities and remedying the rights violations they’ve suffered and continue to suffer.
JAKARTA — Activists have called on the developers of a major tourism project on the Indonesian island of Lombok to immediately remedy the rights violations alleged by local Indigenous communities who have had to be moved from the land.
The resettlement phase of the $3 billion project in the coastal Mandalika region was supposed to have been concluded at the end of September. But activists from a group of NGOs say the lead developer, the state-owned Indonesian Tourism Development Corporation (ITDC), has left myriad complaints of human rights violations unresolved.
In the findings from their investigation, they say the resettlement process was flawed from the beginning and “far from complete.” They note that the ITDC’s resettlement plan calls for three conditions to be met before the process can be deemed complete: provision of fair resettlement; compensation for loss of property in the case of eviction; and livelihood restoration for all project-affected persons.
None of the three conditions have thus far been met, the groups say.
Wawa Wang, director of the NGO Just Finance International, one of the groups that participated in the investigation, attributed this to the hands-off approach taken by the Mandalika project’s main financial backer, the Chinese-led Asian Infrastructure Investment Bank (AIIB).
She said the lender effectively outsourced its due diligence responsibilities to the ITDC, allowing the latter to operate in near-total opacity. As a result, instead of making sure that the resettlement process is in line with the AIIB’s environmental and social safeguards, the bank appeared to be rushing to “check the boxes” to facilitate a quick exit without accountability, Wang said.
In their findings, the groups call on the AIIB and ITDC to not rush the resettlement process without properly consulting with the affected communities to really know what they want and need.
“The solution can only be found in AIIB pausing its loan disbursement and reassessing social impacts in consultation with the project-affected communities, and not by hurrying through with the rehousing under unfair terms,” Wawa told Mongabay.
The AIIB has disbursed $110 million out of the $248.4 million it has committed to the Mandalika project. The most recent loan disbursement was made in August 2022.
Consultation, not consent
The Mandalika projects sits on the southern fringe of Lombok, an island next to the better-known tourism hotspot of Bali. The government aims to turn the area into one of what it calls “Five New Balis,” with the construction of parks, resorts, hotels, and a racetrack that has already hosted the MotoGP and Superbike competitions.
The portion of the development being financed by the AIIB covers the two Indigenous Sasak hamlets of Ebunut and Ujung, in Central Lombok district. While best international practices call for developers to obtain the free, prior and informed consent (FPIC) of Indigenous and local communities affected by a project, the AIIB implements a looser standard it calls free, prior and informed consultation.
This effectively means the bank can approve a project even when individuals or groups within affected communities explicitly oppose it — which appears to have been the case in Ebunut and Ujung.
The AIIB said the ITDC had organized a “socialization forum” attended by the hamlet’s residents. The latter, however, told the NGOs that they weren’t asked for their opinions about the project or for their consent during this forum. Instead, they were only told to leave their land and houses due to the construction of the project.
They also reported that the forum was held in a cramped room filled with police officers and ITDC security personnel, as well as unidentified civilians. These enforcement officers said nothing during the meeting, but their presence created an atmosphere of intimidation and coercion, according to the residents who attended the forum.
As a result, the Sasak communities were denied their rights to determine their own resettlement according to their own needs and wishes, the NGOs said.
The investigation also uncovered large discrepancies between the ITDC and government agencies on the number of families from these hamlets eligible for relocation assistance.
The initial resettlement census conducted in 2019 by the Ministry of Public Works and Housing registered 188 households to be affected by the project, with 132 from Ebunut and 56 from Ujung.
But in its resettlement action plan submitted to the AIIB, the ITDC lists only 137 families: 84 families from Ebunut and 53 from Ujung.
A third survey, the data verification process carried out by the Central Lombok district government toward the end of 2019, determined that only 120 households — 67 from Ebunut and 53 from Ujung — would qualify for relocation assistance.
The NGOs said there were never any attempts to explain or account for these discrepancies by any of the parties involved. They also discovered at least 11 households from Ebunut were eliminated from all existing versions of the resettlement data, rendering them no longer eligible for any future resettlement or compensation, without any explanation why, said Habibi, a researcher with the Institute of Legal Studies and Aid (LSBH), another NGO involved in the investigation.
“It has become clear that the ITDC manufactured much of the data without directly consulting with project-affected persons, while the AIIB looked the other way,” he said.
Home promises broken
Even when households were deemed eligible for relocation support, they were often shortchanged — both in terms of the new dwellings they received and the monetary compensation they were promised.
The relocation site is the village of Silaq Ngolang, on the slope of a mountain far from the coast — a massive loss of livelihood for the Sasak, a community of fishers and farmers.
The government built 120 houses, short of the 150 that the original resettlement action plan called for. It had also promised the residents, in the forum, two-story homes, but delivered single-story units. Monthly utility bills would be waived, the government said, and each household would receive legal title to the land and home. To date, however, none of the relocated families has received the title deeds, and they say they’ve been told they will have to pay their own bills.
The NGOs’ investigation also raises the question of why only 61 of the resettlement homes are occupied, even as families have remained stuck in temporary shelters for years waiting to be allowed to move in.
“Crucially, the AIIB and ITDC have provided no explanation for why the other 59 housing units remain empty,” Habibi said.
At least 15 displaced households remain stranded in the temporary shelter to this day, where they face yet another forced eviction. At least six families were denied residence even in the temporary shelter, despite bringing their own materials to build a temporary home, Habibi said.
“In overcoming their state of homelessness, they resolved to building temporary housing from scratch using billboards and leftover scrap materials from their demolished houses,” he said.
‘Grossly insufficient’ compensation
Then there’s the question of the compensation the families were promised — and the fraction they received.
The NGOs calculated that prior to the project, each household could expect to earn between 2.5 million and 7 million rupiah ($160-$450) per month. By that measure, the government’s promise of one year’s livelihood compensation should have amounted to between 30 million and 84 million rupiah ($1,920 and $5,380).
Yet the government’s final offer to each household was a one-time payment of just 10 million rupiah ($640). Of this, they would receive just 5 million rupiah ($320), with the rest considered a down payment on their new home.
“Such an arrangement would have already put PAHs [project-affected households] in a severely disadvantaged position, with no ability to negotiate more equitable or appropriate compensation amounts for the loss of their homes,” Wang said.
But even 5 million was too much to expect; 79 of the affected households who received the compensation told the NGOs that they received only 3 million rupiah ($192) in cash. They said the ITDC informed them the other 2 million rupiah ($128) was for “administration fees.”
“Needless to say, the payment of 3 million rupiah that some PAHs received was grossly insufficient given the significant costs from their loss of property and livelihoods, as well as the other burdens of internal displacement,” Wang said. “All the community members we spoke to said they were told they had to accept this compensation at its face value, or else they would get nothing.”
The government also made guarantees of at least one job per household. To date, just 15 affected community members have new jobs in the Mandalika Special Economic Zone as hotel employees, security guards and gardeners.
Most are still without a steady job or income, with several turning to odd jobs in construction, for which they earn a fraction of what they previously made fishing or raising livestock, Habibi said.
The affected communities haven’t received any meaningful training either, as promised by the government, he added, and as a result they’re struggling to make ends meet.
Calls for greater transparency
Given the litany of outstanding issues to resolve before the Mandalika resettlement can be considered anywhere near complete, the AIIB must pause the flow of money and the ITDC must halt the evictions, Wang said. Fair resettlement, compensation and livelihood restoration terms have to be agreed upon in a consultative manner with all project-affected peoples before the project can proceed, she said.
She called for greater transparency in the ITDC’s resettlement and compensation data as well as proof from the developer that it has handed over title deeds as promised.
The NGOs also called for adequate compensation and restoration of life for affected residents based on the value of lost livelihoods, with no skimming for arbitrary “fees.”
Repeated reports of human rights violations in the Mandalika project have prompted U.N. rights experts to raise their concerns with the Indonesian government and other stakeholders, including the AIIB, three times — a record for a megaproject funded by a multilateral development bank.
Among the alleged violations highlighted by the U.N. experts is “a high degree of homelessness” due to involuntary resettlement of Indigenous Sasak residents in the project area.
In its response to the U.N. rights experts’ repeated concerns, the AIIB said it takes allegations of human rights violations related to the bank’s operations seriously.
“In this regard, AIIB always remains open to constructive dialogue and continuous improvement of its operational practices,” the bank said.
Banner image: A young family of four was evicted twice in 2021 and 2022 for the construction of the Mandalika project. They continue to live in a temporary shelter they built themselves, even though AIIB’s client, the ITDC, promised them a home and a future. A former fisherman, the father now works as a security guard for the project and has not been paid for 6 months. Image courtesy of Just Finance International.
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