Indonesian and Swiss NGOs filed a complaint to the Swiss NCP against PT. Holcim Indonesia, part of Holcim Ltd Group from Switzerland, a global holding company producing cement, aggregates, ready-made concrete and asphalt, and supporting services. The complainants allege that Holcim Indonesia breached a number of OECD Guidelines provisions by putting 826 households (about 3,000 persons) in Ringinrejo at risk of being evicted from lands they cultivated for the past 19 years by giving this land to the Ministry of Forestry as compensation land for the forest areas that Holcim used for mining and cement factories in Tuban, East Java.
According to the complainants, Holcim failed to conduct human rights due diligence and engage with relevant stakeholders in order to provide meaningful opportunities for the views of the local communities to be taken into account before designating the land as a compensation land. Furthermore, complainants consider that the stakeholder consultation process taken by Holcim did not include the directly affected people of Ringinrejo, but rather new migrant farmers from outside the region who do not live on the compensation land. Although the villagers have not yet been evicted from their lands, they remain in an uncertain limbo as to the future of their livelihood.
The complainants request that the Swiss NCP facilitate a dialogue with the company aimed at agreeing on alternative compensation land that does not interfere with the rights of Ringinrejo villagers.
Relevant OECD Guidelines
- Chapter I
- Chapter I Paragraph 2
- Chapter II
- Chapter II Paragraph A14
- Chapter II Paragraph A2
- Chapter IV
- Chapter IV Paragraph 1
- Chapter IV Paragraph 2
- Chapter IV Paragraph 3
- Chapter IV Paragraph 5
- Chapter IV Paragraph 6
After an initial assessment, the NCP concluded that the issues raised merit further consideration. The NCP therefore accepted the specific instance in June 2015 and brought the parties together for mediation with the help of an external mediator. The parties agreed to a mediation meeting held in Berne in November 2015 that the intention of the mediation process would be to seek a mutual satisfying solution to settle the dispute, which allows livelihood for the farmers; allows Holcim to continue its business activities; and is in compliance with Indonesia laws and respects human rights.
During the mediation meeting the parties could not reach agreement over the amount of land required for people’s livelihoods. Despite disagreement over the amount of land required, the company said they were willing to provide 72.4 ha of farmland out of their 854 ha concession to the local authorities from the Ministry of Forestry for the use of the 826 households in the area. Complainants still said more land was required per family. Thus, both parties agreed to enter into a dialogue with the Ministry of Environment and Forestry in Indonesia with mediation by an independent mediator hired by the Swiss NCP and submitted a formal request for this meeting with the aim of reducing the amount of land that would be used for reforestation, while giving more land to local communities. After submitting a letter to the Ministry of Environment and Forestry, the Ministry responded in May 2016 saying that legal suit filed by representatives of the farmers asking for more compensation land was rejected by the state administrative court and over the next year the Ministry did not accept to conduct a joint meeting between the parties. Furthermore, the 72 ha of land offered by the company also decreased as the local government said they required part of the land for the construction of a provincial road.
In the Berne mediation meeting, the two parties had also agreed to discuss further three other options, including a) the offer of the submitting party to distribute around 700 m2 per household, b) the offer of the submitting party to include farmers in their community development programs (running for 3 years) allowing generating alternative income, and c) Integration of farmers in the process of reforestation as well being able to cultivate in reforested areas. During meetings over the next 18 months, Holcim made a commitment to distribute around 700 m2 per household to the farmers and both parties discussed the option of b.
However, after a representative of the Swiss Embassy held bilateral exchanges between the parties in February and April 2017 in Jakarta, the Swiss NCP decided to conclude the complaint in June 2017, as there was a change in the framework conditions and the absence of substantial progress made over the agreed options and that the Swiss NCP felt it was not in a position to contribute further to the resolution of the issues. The Swiss NCP thus recommended that parties to continue with their dialogue efforts and try to find mutual satisfactory solutions to the options a, b, and c and that the LafargeHolcim Group in Switzerland should also closely follow the situation in Indonesia regarding the issues raised in the complaint. Finally, the Swiss NCP asked both parties to report on the progress made six months after the closure of the complaint.