HOW IFC’S SUPPORT FOR CAPTIVE COAL IN NICKEL INDUSTRIAL PARK IS DESTROYING OBI ISLAND

This report by Trend Asia alleges that the International Finance Corporation (IFC) is indirectly financing the environmentally and socially destructive nickel industrial park on Obi Island, Indonesia, through financial intermediaries. The document details severe ecological damage, human rights violations, and the use of captive coal power plants that undermine the IFC's climate commitments and the Paris Agreement.

• The nickel industrial park on Obi Island has caused significant environmental degradation, including the contamination of marine biota and drinking water. Sample tests of 12 types of marine biota showed all were contaminated by heavy metal waste, and drinking water sources within 200 meters of mines contained hexavalent chromium (Cr⁶⁺) at 60pbb, exceeding the Indonesian safety standard of 50pbb.
• The industrial activities on Obi Island have led to severe social impacts, including public health crises, land disputes, and forced evictions. In 2020, a village midwife clinic reported 900 cases of Acute Respiratory Infection (ARI) in a population of 4,000, with over half occurring in children aged four and under. Additionally, residents of Kawasi village face threats of forced eviction to a site considered unsuitable because it was formerly swampland.
• The IFC is accused of indirectly supporting these operations through financial intermediaries (FIs), specifically OCBC NISP, DBS Bank Ltd, and KEB Hana, which have provided loans to Trimegah Bangun Persada (TBP) and its subsidiaries. The report claims the IFC failed to ensure these clients implemented an Environmental and Social Management System (ESMS) adhering to Performance Standards.
• The industrial park relies heavily on captive coal-fired power plants to run its smelters, which contradicts the IFC's climate goals. In 2022, the park generated 3,489,944 tons of CO2e, which is six times the 2021 emissions of Timor Leste. TBP's 2022 energy usage was 91% derived from coal.
• The report identifies a critical loophole in the IFC's Green Equity Approach (GEA), noting that the commitment to reduce coal exposure does not apply to captive coal power plants used for industrial applications such as mining and smelters.
• Mining operations on Obi Island threaten high endemicity of flora and fauna, particularly birds. The Batu Putih Mountain area is an Important Bird Area (IBA) with 212 recorded bird species as of December 2018, including species that are endangered, vulnerable, or near threatened.

APA

Indri, N. (2023). HOW IFC’S SUPPORT FOR CAPTIVE COAL IN NICKEL INDUSTRIAL PARK IS DESTROYING OBI ISLAND. Trend Asia. https://trendasia.org/wp-content/uploads/2023/10/TrendAsia-9.pdf

Chicago

Indri, Novita. HOW IFC’S SUPPORT FOR CAPTIVE COAL IN NICKEL INDUSTRIAL PARK IS DESTROYING OBI ISLAND. Trend Asia, 2023. https://trendasia.org/wp-content/uploads/2023/10/TrendAsia-9.pdf.

Wikipedia

{{cite report |last1=Indri |first1=Novita |title=HOW IFC’S SUPPORT FOR CAPTIVE COAL IN NICKEL INDUSTRIAL PARK IS DESTROYING OBI ISLAND |publisher=Trend Asia |date=October 2023 |url=https://trendasia.org/wp-content/uploads/2023/10/TrendAsia-9.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{indri2023how, author = {Indri, Novita}, title = {{HOW IFC’S SUPPORT FOR CAPTIVE COAL IN NICKEL INDUSTRIAL PARK IS DESTROYING OBI ISLAND}}, institution = {Trend Asia}, year = {2023}, month = oct, url = {https://trendasia.org/wp-content/uploads/2023/10/TrendAsia-9.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }