An analysis by the Coalition for Monitoring Infrastructure Development (KPPII): Asli Mandalika, Just Finance International, Institute for Legal Studies and Aid in NTB (LSBH), Legal Aid Institute in Mataram (LBH-Mataram), National Alliance for the Agrarian Reform Movement (AGRA), BothENDS and Satya Bumi.
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JFI-Arbitrary Resettlement and Compensation Schemes of the AIIB-Funded Mandalika Project September 2023
September 2023
Nearly five years have passed since the Beijing-led Asian Infrastructure Investment Bank (AIIB) approved a $248.4 million loan for the financing of Indonesia’s Mandalika Urban Development and Tourism Project. The project represented a major investment for the young bank, established in 2016 to fast-track regional infrastructure projects in Asia. In practice, however, the AIIB’s involvement in Mandalika has enabled and perpetuated the wide-scale, forced eviction of indigenous populations from their land, while severing them from their main sources of livelihood.
The AIIB has made lofty promises to uphold high transparency standards and “best environmental and social practices,’’ while claiming that it has “worked with communities…to minimize and mitigate, if not avoid, adverse project impacts.” In the ITDC’s Resettlement Action Plan (RAP), three important conditions were established and guaranteed under the AIIB’s safeguards for all project-affected peoples: (1) provision of fair resettlement, (2) compensation for loss of property in the case of eviction, and (3) livelihood restoration for all project-affected persons.
Yet, instead of upholding these standards, our investigations find that the bank has repeatedly failed to meet its own, most basic social and environmental safeguards.
More than four years and counting, project-affected communities in Mandalika have endured – and continue to face – internal displacement, loss of livelihoods, and the daily humiliations of project-induced poverty. In the midst of this messy and unfinished resettlement and compensation process, the AIIB has devised an exit strategy which is the opposite of the time-bound remedies and open resolutions that are needed.
According to the AIIB’s latest Project Implementation Monitoring Report, the bank and its client, ITDC, aim to complete resettlement in September this year, with the ITDC expected to “prepare a RAP implementation completion report and provide all supporting documents.”
Accepted protocol among international financial institutions is to produce regular, ongoing and public resettlement and social impact monitoring reports in order to ensure transparency and accountability. The AIIB’s consent in allowing its client to present a single data dump at the self-described terminus of the resettlement process represents an alarming deviation from this practice, preventing access to crucial information on land acquisition, resettlement and compensation by project-affected peoples and the public.
Testimonies by project-affected communities also confirm how the discriminating and non-transparent resettlement eligibility, as well as inconsistent sets of resettlement data reflect the AIIB’s failures in meeting the most basic measures of accountability. The bank wholesale delegated its due diligence responsibilities to the ITDC, while allowing its client to operate in near-total opacity. In addition to all this, the systematic exclusion of any meaningful involvement by the project-affected communities have resulted in a complete breakdown of a fair and orderly resettlement process. As a result, the inadequate and arbitrary housing compensation pushed many households into poverty, while the relocation and rehoming process stalled.
Recommendations
Our findings indicate consistent and systematic violations of the RAP’s three commitments to provide resettlement, compensation for property loss during and livelihood restoration. While there have been isolated instances of PAHs receiving some form of resettlement and rehoming, they remain exceptions rather than the norm.
Rather than benefit the local communities, the AIIB and ITDC’s failure to meet these conditions has led to increased suffering among the hundreds of families who have been evicted. They have not only lost their land, homes, and sources of income but also endured years of uncertainty. Consequently, many of them have accumulated significant debts owed to neighbors and non-conventional banks, often totaling millions or tens of millions, in order to cover daily expenses, school fees for their children, and even materials for the construction of new homes they must build themselves. This situation paints a clear picture of how the promises made by AIIB and ITDC for a better life for those affected by the Mandalika Project have fallen significantly short of the bank’s touted commitment to ‘best environmental and social practices.
For the project-affected peoples of Mandalika, the AIIB and ITDC’s sweet promises of a better life have brought nothing but greater hardship.
Therefore, the AIIB and ITDC must immediately remedy the rights violations suffered by PAHs due to the Mandalika Project in the following ways:
- Immediately disclose the land audit and reassessment of ITDC’s resettlement data along with documentation detailing the cash and bank payments for compensation .
- Immediately disclose copies or proof of certificates for land and housing for the 61 PAHs currently residing in the permanent resettlement site ‘Silaq’.
- Immediately relocate and rehouse the PAHs stranded in the temporary shelter area ‘Hijrah.’
- Immediately set up Technical Assistance to facilitate:
a) the independent reassessment of the loss of livelihoods and properties and deliver corrective restoration measures based on the independent reassessment,
b) the independent assessment of the adequacy and functionality of the permanent resettlement site,
c) technical support to its Client in undertaking a land audit in a consultative manner that includes those with land rights and user rights to land. - Provide adequate housing for residents while empowering them with the right to determine a location that is not cut off from access to their livelihoods.
- Provide adequate compensation for house evictions equivalent to the cost of building the required semi-permanent house which is based on the price of building materials in the Mandalika area.
- Provide restoration of life for affected residents based on the number of people, not just heads of families, based on the value of lost livelihoods.
- Stop eviction until fair resettlement, compensation and livelihood restoration terms have been agreed upon in a consultative manner with all project-affected peoples.
