ENVIRONMENTAL IMPACT ASSESSMENT EIA
Mining Permit IUPK Article 78 one of the requirements is to conduct the EIA.
The State Ministry of Environment KLH is the government agency
that serves
to implement
and supervise
the implementation of government policy in the environmental
field, in the environmental impact control, and supervise the mining operations of the Company by local government agency.
KLH is directly under the President and in coordination with other Agencies or Departments of the Government including the
Ministry of Energy and Mineral Resources ESDM in the case of mining.
In the Company’s organization, the party who is responsible for
the environmental
management is
the Environment
Superintendent who is part of the Department of Technical Services and Engineering, and assisted by the Head of Mining
Engineering. In addition, the Company has a special officer to perform daily monitoring of the environment, rehabilitation
and mine
vegetations. The
Company oversees
the mining
activities quarterly
and biannual
surveillance by
the Government authorities. The Company has obtained the approval
of the EIA. The employees of environment division monitor the Companys
daily operations activities and report reclamation of the areas which are formerly mined to be filled and replanted by
using the services of local companies, so the Company also
contributed to the progress and prosperity of the local community’s business. After reclaimed, the temporary utilized
land or forest area will be handed back to the Ministry of Forestry. After reclamation the land which is not included in
the Forest Area Temporary Utilization Permit will be planted with commercial crops, fish farms and the development of
recreational areas. BIB, which is a company under control of the Company through
the Companys investments in RCI, has had the approval of the EIA on the implementation of coal mining activities pursuant
to Decision of the Regent of Tanah Bumbu No. 29 Year 2005 dated February 25, 2005 regarding Approval of Environmental
Impact Analysis
Andal, Environmental
Management Plan
RKL and Environmental Monitoring Plan RPL of PT Borneo Indobara. On coal mining activities in the Satui, Sei Loban
and Kusan Hulu Districts of Tanah Bumbu Regency, South
Kalimantan Province, “SK 292005” which is in effect from
the date of commencement of SK 292005, among others, regulates that BIB might perform the coal mining activities
and shall comply with the implicit provisions in approved documents of Andal, RKL and RPL. SK 292005 is valid for five
years from the date of enactment. On May 6, 2010, Regent of Tanah Bumbu issued Decision No. 261
Year 2010 on the Environmental Feasibility of Coal Mine Activities of PT Borneo Indobara in Satui District, Angsana
District, Sungai
Loban District,
Kuranji District
and Kusan Hulu District, Tanah Bumbu Regency, South Kalimantan
Province “SK2612010”. SK2612010, among others set, that
Andal, RKL and RPL of BIB could be approved and might perform the coal mining activities.
In connection with the coal stockpile special port activities located in the Angsana village, Tanah Bumbu District, South
Kalimantan, BIB
has obtained
UKL and
UPL which
have been approved by the Regent of Tanah Bumbu as evident from the
Decision of Tanah Bumbu Regent No. 169 of 2006 “SK1692006”.
Furthurmore, on July 20 2010, Tanah Bumbu Regent issued Letter of Decision of Regent No. 379 Year 2010 on environmental
feasibility of the construction and operational activities of special coal terminal of BIB in Bunati village, Angsana
District, Tanah Bumbu Regency, South Kalimantan Province “SK 3792010”. The intended SK sets, among others, that Andal,
RKL and RPL of BIB could be approved and might perform special terminal activities.
On September
7, 2011,
the Local
Environmental Impact
Management Agency “Bapedalda” of Tanah Bumbu District issued
Letter No. 66075BAPEDALDA2011 which in essentially revoked SK
2612010 “SK
660752011”and Letter
No. 66076BAPEDALDA2011,
which revoked
SK 3792010
“SK 660762011”.
On 8 September 2011 the Environmental Agency of South
Kalimantan Province “BLHD” issued a Letter No. 660497-A
APDLBLHD regarding Clarification on EIA of the Mine of PT
Borneo Indobara “BLHD Letter” to BIB, and also copied to
Bapedalda, which among other things clarifies that: 1 BIB has had the EIA document pursuant to SK292005 which
was valid for 5 years, 2 based on the EIA review in SK 292005 Year 2005, BIB has a
production capacity of 5 million tonyear with a planned production activities until the 26
th
year, according to the existing reserves deposit which amounting to 114.5
million tons and the scope of the study of the whole PKP2B area which covers 24,100 Ha,
3 in accordance
with Article
25 and Article
26 of
Government Regulation No. 27 Year 1999 concerning the EIA, the decision on environmental feasibility EIA is
basically valid for the life of the business andor activities, as long as the proponent does not move the
location, change
the design
andor process
andor capacity andor raw materials andor auxiliary materials,
4 related to item 3 above, and based on the results of verification that has been performed and information
submitted by BIB, the current mining activities of BIB are still in the capacity of existing EIA year 2005,
5 related to the enforceability SK292005 which is for 5 years and by considering the point 3 above, it is
advisable to BIB to request the Bapedalda to publish amendment to SK292005.
Subsequently, on
September 30,
2011, the
Ministry of
Environmental of the Republic of Indonesia also has issued a Letter No. B-8894Dep.ILH092011 dated September 30, 2011
concerning Clarification of Withdrawal of Letter of Decision of Environmental Feasibility of PT Borneo Indobara addressed
to the respective Head of BPLHD of South Kalimantan Province, Head of Bapedalda of Tanah Bumbu Regency and Director of BIB
“Letter of KLH No. 88942011”. The Letter of KLH No.
88942011, explaining, among others, that: 1 Bapedalda has been right to revoke SK 2612010 and SK
3792010 due to i SK 2612010 cannot be regarded as an extension of letter of feasibility and ii the content
of the SK 2612010 does not refer to the SK 292005, 2 BIB mining activities have had the EIA pursuant to SK
292005, 3 by considering that BIB does not make a change or an
increase in capacity and operation activities and refers to Article 24, 25, 26 and 27 of Government Regulation No.
27 Year 1999, then one of the dictum in SK 292005 which states that the letter of feasibility is valid for 5
five years from the date of enactment needs to be
amended due to basically i an EIA is still relevant and valid as long as it is not expired, no change of
location, design, process, capacity or raw materials or auxiliary materials andor a fundamental change in the
environment and ii the clause does not have a legal basis and would create legal uncertainty for investment,
4 related to special ports, BIB has had UKL and UPL documents pursuant to Regent Decision No. 169 Year 2006
on Approval on Environmental Management Efforts UKL and Environmental Monitoring Efforts UPL of BIB on the
activities of Special Port and Coal stockpile at the Angsana Village, Satui District, Tanah Bumbu Regency
“SK1692006”. In connection with the plan of change,
BIB has submitted the EIA and has obtained approval pursuant to SK 3792010.
Furthermore, in its conclusion the KLH Letter No. 88942011 explaining, among other things:
1 revocation of respective SK 2612010 and SK 3792010 is appropriate because they were issued without a proper EIA
assessment process; 2 considering activities of BIB has been running and in
order to provide legal certainty, the Regent of Tanah Bumbu is requested to make an addendum to the SK 292005
which revoked the forth dictum of the same Decision Letter which contains the clause that SK Approval is
valid for 5 five years from its enactment, thus the EIA of BIB mining pursuant to SK 292005 remains legally
valid; 3 UKL and UPL owned by BIB have included the special port
activities in the Bunati village. However, because BIB has planned a change, then the preparation of the EIA is
required, while SK 3792010 which includes the change has been revoked, so it is required a follow-up actions.
Pursuant to Letter of KLH No. 88942011, the follow-up is by performing field verification to identify scope of
activities which are currently running and the scope of UKL-UPL activities. In the case of capacity of the
special port activities which are still in accordance with the scope of UKL and UPL, BIB could still refer to
SK 1692006 and in the event of changes in width or capacity of the special port, then the changes could be
proposed to be subject to compulsory environmental audit. If specified by the Compulsory Environmental Audit, the
special port activities of BIB could be continued as long as BIB has a valid license for the operation of special
port in question. On October 5, 2011, the Directorate General of Mineral and
Coal issued a Letter No. 225137.03DBT2011 addressed to BIB
and copy forwarded to the Regent of Tanah Bumbu “Letter of DG Mining No.2251”, which was basically in line with what is
referred to in the Letter of KLH No.88942011, and further explained that in principle Andal, RKL and RPL as have been
approved by
SK 292005
are still
relevant and
could accommodate the production operation activities of BIB coal
mining. Subsequently,
on October
17, 2011,
Bapedalda issued
a Notification
Letter No.660.4762APDLBAPEDALDA2011
“Bapedalda Letter 6602011” which contents refer to letter
of KLH
No. 88942011
and among
others, explained
the following:
1 The EIA of BIB as contained in SK 292005, valid for 5 years, whereas in Act No. 32 Year 2009 regarding the
Environmental Protection and Management and Articles 24, 25, 26 and 27 of Government Regulation no. 27 Year 1999
regarding EIA, unless there is a change in design andor process andor capacity andor raw materials andor
auxiliary materials andor activities are not conducted in period of 3 years from the issuance of decision, then
there is no limitation on EIA validity, and based on the evaluation, there is no changes in the mining activities
of BIB coal; 2 Taking into account the Letter of KLH No. 88942011, in
order to do an addendum to SK 292005 which revokes the fourth Dictum of SK 292005 which contains the clause
that SK 292005 is valid for five years from enactment;
3 Given point number 1 and 2 of the Bapedalda Letter, currently SK 292005 is in the process of revocation of
the forth
dictum as
stated in
the SK292005
which contains a clause that SK 292005 is valid for five years from the date of enactment;
4 The EIA of Special Port of BIB is currently in the evaluation
process in
order to
the Compulsory
Environmental Audit in accordance with the provisions of Act No. 32 Year 2009 regarding Environmental Protection
and Management
with guidelines
in accordance
with Decision of the Environmental Minister No. 30 year 2001
and in performing its activities, BIB refers to the UKL- UPL in accordance with SK 1692006 regarding approval on
UKL and UPL of BIB on the special port activities and coal stockpile in Angsana Village, Satui District, Tanah
Bumbu Regency, South Kalimantan province. The Company confirms that as of the publication date of this
Prospectus, BIB did not perform business activities beyond the provisions or capacity as provided in Andal owned by it
pursuant to SK292005. In this regard and with reference to Letter of KLH No. 88942011, Letter of the Director General
of Mineral and Coal Mining No.2251 and Letter of Local Environmental impact Management Agency Bapedalda 6602011,
SK292005 remains in effect so that BIB can perform its business. Furthermore, related to UKL and UPL special port of
BIB, until the date of this Prospectus, the Company believes that there are no things that can result in Decision 1692006
be revoked or material things that can lead to expansion than the UKL and UPL port BIB specifically intended to be
unenforceable.