Conservation, Indigenous rights issues haunt Indonesia’s new capital

Indonesia’s plan to build its new capital city on an expiring logging concession in eastern Borneo has sparked concerns among environmental and human rights observers about the larger eco-social impacts to the rest of the island.

Clearing of mangroves and high-conservation forest areas, land conflicts with Indigenous communities, and potentially large-scale displacements are already happening, calling into question whether the US$34 billion project’s benefits will outweigh its downsides. Image: Tiomax80, CC BY-SA 3.0, via Flickr.

In 1977, when Darna was about 8 years old, her family moved from Indonesia’s central island of Java to Borneo, its largest. They were among the tens of thousands of families who participated in then-president Suharto’s transmigration program, which aimed to ease crowding in Java by offering free tracts of land in other islands, less populated and developed, across the archipelago.

Nearly 50 years later, Darna now faces the possibility of having to relocate her own family as part of another presidential initiative aimed at transforming Indonesian Borneo. In August 2019, President Joko Widodo announced that Darna’s hometown of Sepaku in North Penajam Paser district, East Kalimantan province, would become the core zone of Indonesia’s new capital city, Nusantara.

Mongabay interviewed Darna in October 2022, while she took a break from serving diners at her food stall along the main road in Sepaku. “All of this area will be demolished for road expansion for the new capital, I heard,” she said, referring to the handful of shops, houses and rice fields lining the road. “For us, we’re OK with it. It’s the government’s right, you know. If they want to move us, that’s OK.”

Echoing Suharto’s transmigration initiative, Widodo’s decision to move Indonesia’s capital from the overcrowded and rapidly sinking Jakarta is aimed in part at spurring growth beyond Java, especially in the eastern parts of the archipelago.

Government officials say building Nusantara is part of the plan to attain high-income status for Indonesia by 2045 and stimulate economic growth in the aftermath of the Covid-19 pandemic. The country’s main business lobby says the project should contribute US$180 billion to Indonesia’s GDP and create 3 million jobs.

The interests of the new capital are certainly not the interests of Indigenous communities.

Saiduani Nyuk, head of East Kalimantan chapter, Indigenous Peoples Alliance of the Archipelago

Building this new city from scratch is expected to cost the nation US$34 billion, with President Widodo saying he expects foreign investors to foot 80 per cent of the bill. The idea is that this anticipated wave of investment will spur new jobs, increase local and national income, and boost the competency of local workers, all of which should raise the level of public welfare. The president has also promised that this new economic epicentre, removed from Jakarta, will be Indonesia-centric rather than Java-focused, meaning no region will be left behind.

While those promises of grandeur for Indonesia’s future are appealing to some, many environmentalists, Indigenous and local communities, and human rights observers say that shifting the country’s political and economic locus to Borneo will bring unmitigated, devastating eco-social impacts to an island that’s a hotspot for cultural and biological diversity.

West vs east

The economic and development disparity between the western and eastern parts of Indonesia has been a chronic problem for every president since Indonesia’s independence. (Not coincidentally, six of the country’s seven presidents have been Javanese, including Widodo.

The other, Sulawesi native B.J. Habibie, only became president by default; he was vice president when long-ruling strongman Suharto succumbed to a people power movement, and refused to join the regime’s mass resignation — much to Suharto’s chagrin.) Poverty levels in the country’s east are nearly double the figures in the west. Economic development has been concentrated in Java, which in 2022 accounted for 55 per cent of Indonesia’s total GDP, leading to lack of connectivity between the economic hub and other regions.

The idea of setting up a new capital city in Indonesian Borneo, known locally as Kalimantan, isn’t a new one. The country’s founding president, Sukarno, was the first to tout the idea, and his successors have each touched on the issue. For Widodo, though, the concept dovetailed with his infrastructure-building spree, including several strategic projects slated for East Kalimantan province.

This includes the expansion and upgrade of the Trans-Kalimantan Highway, meant to promote and shape future investments, particularly in logging, mining, and palm oil. The government also expects to turn Kalimantan into a bread basket through the establishment of massive “food estates” meant to secure domestic supplies of staple crops and feed the new capital once it’s up and running.

The plan for the new city will see it sprawling across 256,000 hectares (633,000 acres) of land, split into core government and urban zones. An estimated 1.9 million people are expected to move here from Jakarta starting in 2024. Widodo said in 2019 that the location was chosen based on a three-year assessment of the risk of disasters such as floods, landslides, forest fires, earthquakes, tsunamis and volcanic eruptions. The site, straddling the border between the two districts of North Penajam Paser and Kutai Kartanegara, was found to be among the least prone to disaster risk in Indonesia.

But Kalimantan is also home to 37 million hectares (91 million acres) of tropical forest, about 7 million hectares (17 million acres) of which are designated as protected areas, according to the national statistics agency. East Kalimantan alone is home to 8.26 million hectares of forest, or 65 per cent of the total coverage in Kalimantan, according to government data. The province has nearly 1.8 million hectares (4.4 million acres) of protected forest and 438,000 hectares (1.08 million acres) of conservation areas and nature preserves.

Kalimantan is already the third most populous island in Indonesia, after Java and Sumatra (both of which are significantly smaller in area), and the government estimates the current population of about 16 million will increase by nearly a third to more than 20 million by 2035.

The region is also home to Indigenous communities whose lives revolve around intact forests, as well as to endemic species such as critically endangered Bornean orangutans (Pongo pygmaeus) and endangered proboscis monkeys (Nasalis larvatus).

The industrial development that Kalimantan has seen thus far — coal mines, oil palm plantations, and logging concessions — has contributed much to the deforestation of the island’s rainforests and erosion of its coastal ecosystems. Observers and local communities have raised repeated concerns over how a colossal project like Nusantara will compound the environmental damage.

“To me, it’s the combination of everything put together into sort of one development strategy which represents the threat more than just Nusantara itself. But of course Nusantara is the city that will drive more investment into Kalimantan,” David Gaveau, founder of TheTreeMap, an initiative studying the impacts of deforestation on climate change around the world, told Mongabay in a phone interview.

The new capital city will be built as two concentric zones radiating outward from Sepaku subdistrict, a two-and-a-half-hour drive from Balikpapan, the nearest large city. At the center of Nusantara is what’s known as ring one, the core government zone, which will house the palaces of the president and vice president, and ministry offices.

Ring one falls entirely within the existing concession of logging company PT International Timber Corporation Indonesia Hutan Manunggal (IHM), whose operations here began more than 20 years ago. Much of the area that will make up ring one is currently planted with acacia trees, and the rest is protected natural forest. The outer zone, ring two, will host the central business district, tourism facilities, and research and education centers. It will cover 42,000 hectares (104,000 acres) and encompass parts of concessions held by IHM and another logging firm, PT International Timber Corporation Indonesia Kartika Utama (IKU).

In addition to the city itself, development of the area’s transportation infrastructure, especially toll roads, is among the most crucial components of the Nusantara project. The port city of Balikpapan is one of the main gateways to Nusantara, and is also the hub for Kalimantan’s mining and agriculture industries. But in what threatens to be a repeat of the Java-centric development around Jakarta, there’s little development planned outside the Nusantara-Balikpapan nexus, critics say.

The drive to Nusantara from Balikpapan crosses through hilly terrain along a stretch of Balikpapan Bay. A controversial bridge connecting Balikpapan and North Penajam Paser was developed as a shortcut, despite slicing through an island full of mangrove forests in the middle of the bay. But this bridge, completed in early 2021, remains isolated from the rest of the region.

Now, a toll road, already under construction, aims to cut the travel time between Balikpapan’s Kariangau seaport and the new capital by directly connecting the port and the newly built bridge before continuing north toward Nusantara. In the process, the road has cut through the forested buffer zone of the Sungai Wain protection forest, home to scores of sun bears (Helarctos malayanus), a vulnerable species that’s the Balikpapan mascot. Concerns surrounding this toll road development include further encroachment into the protection forest and potential loss of a key wildlife corridor between the Sungai Wain zone and Balikpapan Bay.

“One of the clear benefits from the development of the new capital, especially ever since the president started visiting here, is that the roads in Sepaku are improved,” Mapaselle, executive director of the community conservation group Pokja Pesisir, told Mongabay in an interview. He said better road infrastructure will serve more people, reducing travel costs and times. But it also comes with a downside.

Mapaselle said he expected more extensive road expansion over the coming years, both within the new capital and across Kalimantan to ease access into Nusantara from the rest of the island. That, he said, could spell environmental troubles for the remaining forests in the region.

“In Kalimantan, toll roads and highways mean that mobilisation will not merely be for public transportation, but specifically for [industrial] logistics,” Mapaselle said.

He said he expected the new highways would mainly connect industrial sites across Kalimantan to the closest seaports to facilitate the distribution of the resources out of the island. Large-scale road projects across Kalimantan, notably the Trans-Kalimantan Highway, have been linked to further fragmentation of prime forests and increased tensions between indigenous communities and the people moving into newly developed areas. Road projects across rural Indonesia are also often riddled with corruption.

A green city?

One of the key marketing points for Nusantara is its development as a “sustainable, forest city,” where 75 per cent of the area will be allocated for green, open spaces, and where renewable energy will be the main source of power, including the use of electric vehicles.

The green agenda is supposedly incorporated in the city’s net-zero carbon emissions design, and the government also plans to reforest degraded areas, rehabilitate ex-mining pits, and convert oil palm plantations into nature reserves or food estates. Community parks and ecological corridors are also part of the strategy to minimise the environmental footprint of the capital city’s development. Other principles that the government has adopted in the design include affordable and resilient living, accessibility, and economic opportunities for all.

But many observers have warned of the extensive footprint of environmental degradation brought on by the development of the city’s core and supporting infrastructure — not just in the interior of East Kalimantan, but across the island and beyond.

The carbon footprint of building an entire city from the ground up is one factor. East Kalimantan is the coal-mining heartland of Indonesia, making the fossil fuel the most likely energy source powering this construction boom and risking Indonesia’s emissions reduction goals.

Once the city is up and running, the government has proposed alternative energy sources including wind and solar energy, as well as hydropower generated from mega dams located on the Kayan River in the north. The hydropower from Kayan could replace coal outright, but the development of the facility and its associated transmission lines has also displaced Indigenous Dayak people living along the river.

Even the plan for electric cars has raised some concerns among environmentalists.

“I mean, if Nusantara will have electric cars, you better go and find nickel somewhere. And it may not be in Kalimantan, but it will be in Sulawesi and in Halmahera,” Gaveau said, pointing to nickel mining activities in Indonesia’s eastern islands that have cleared forest and coastal habitats.

Two nickel smelters are under development in East Kalimantan; one of them, owned by Jakarta-based PT Mitra Murni Perkasa (MMP), is being built in Balikpapan Bay. When Mongabay visited the bay and passed by the smelter’s site, rows of mangrove were abruptly broken by an open expanse of burnt-sienna soil and a boat jetty jutting out into the bay. Some faint traces of mangrove trees still surrounded the location, traces of its former state, before the smelter project began. Local media have reported the mangrove clearing was done without having secured approval for its environmental impact assessment.

Mongabay asked Gaveau to look into the status of the mangroves in Balikpapan Bay, including at the smelter’s site. He found they were designated as “other-purpose” forests, or APL, meaning they have little to no official protection. “We can see that this little area is already destroyed. And they’re going to be destroying more. It’s impossible that they develop without destroying a little bit of mangrove,” he said.

Besides the smelter, local groups and communities have also raised concerns about pressure on the Balikpapan Bay ecosystem from the planned upgrade and expansion of seaports to facilitate the development of Nusantara.

Balikpapan Bay hosts a rich diversity of marine and terrestrial life, including proboscis monkeys, Irrawaddy dolphins (Orcaella brevirostris), and some 17,000 hectares (42,000 acres) of native mangroves. The bay is also the main source of income for at least 12,000 fishing households in both Balikpapan city and neighbouring North Penajam Paser district. Some parts of the bay, including the island of Pulau Balang, have been designated by the fisheries ministry as a marine conservation zone.

Mapaselle of Pokja Pesisir said that one of logging company IHM’s private seaports, which is surrounded by thick mangrove forests, has been appointed to support the construction logistics for the new capital.

Experts and activists say the government has made no official plans to mitigate these identified threats to the bay’s marine ecosystem, even as construction takes place upstream. Some say this is likely because official maps put Balikpapan Bay 40 kilometres (25 miles) outside the designated Nusantara development zone.

“When the spatial planning for the new capital is not integrated with the marine conservation zone, it can become chaotic,” Mapaselle said, adding that if further clearing and conversion of the bay’s marine ecosystem were to happen, then, for instance, the designated marine conservation zone would lose its conservation function.

Conservation efforts for Kalimantan’s forests, such as the Heart of Borneo (HoB) initiative, may also be at high risk due to expansive development of infrastructure facilities to support the construction and operation of Nusantara. The HoB program, led jointly by the Indonesian, Malaysian and Brunei governments with support from conservation NGOs, seeks to protect the forested area and its rich biodiversity at the centre of the island of Borneo that the three countries share.

“The HoB is a life-supporting geographic landscape that has high conservation value attributes for the ecosystem and society within and surrounding the new capital city site,” Aditya Bayunanda, CEO of WWF Indonesia that oversees the initiative, told Mongabay.

Aditya said the new capital development must guarantee and prioritise the sustainability of the HoB ecosystem, which is a source of water, clean air, food and living harmony for the local communities.

Forced displacement is another big concern that the development of Nusantara poses. Government officials have promised fair compensation for legal landowners in the main area of the new capital, and allocated a new site for relocation. While those like Darna are welcoming of the planned relocation, many living outside the official Nusantara zone say they worry they won’t be able to withstand the impacts.

“The damage from the development of the new capital is felt the most by those outside the main city,” Darman, 54-year-old fisherman from Gersik subdistrict, told Mongabay. Gersik is just outside the borders of Nusantara, but Darman said some parts of the subdistrict will be turned into an airport for military and special guests, and also new housing for people like Darna who will be relocated here to make way for the new city.

Darman said he’s worried those plans will mean the displacement of his family and others, potentially forcing him to quit working as a fisherman and learn a whole new set of skills to make a living. The alternative, he said, is to stay put and endure a wide and growing social disparity.

“We’re not anti-development, we’re actually happy for it because that means there’s advancement,” Darman said. “What we want to see happen is equity being upheld.”

Defenders of Indigenous peoples’ rights point out that the displacement brought by Nusantara’s development could end up creating more problems than benefits. They draw a parallel to Suharto’s transmigration program, which has been blamed for worsening deforestation across the country, increasing the country’s debt, and ultimately doing little to reduce overpopulation in Java or boost development outside it. Transmigration also contributed to social conflicts between newcomers and the Indigenous communities whose lands were taken over without prior consent or compensation.

“The interests of the new capital are certainly not the interests of Indigenous communities,” Saiduani Nyuk, the head of East Kalimantan chapter of the Indigenous Peoples Alliance of the Archipelago (AMAN), told Mongabay over the phone. He added the project advances mainly the interests of the country’s oligarchs — the same people who had previously robbed Kalimantan’s Indigenous communities of their lands, he said.

Saiduani said the downsides of developing Nusantara could extend to Indigenous communities across Kalimantan as the new capital would require supporting facilities being developed outside East Kalimantan, such as the hydropower dam in North Kalimantan province, a food estate project in Central Kalimantan, and the Trans-Kalimantan highway expansion in West Kalimantan.

“I think the whole of Kalimantan will end up having to support the establishment of the new capital,” he said.

With nearly 2 million people estimated to relocate to the new capital, observers say they worry that instead of creating equal employment opportunities and economic redistribution, the project might spark new social conflicts and subsequently widen inequality.

Pokja Pesisir’s Mapaselle noted the case of Jakarta and how the Betawi people, the original inhabitants of the area, were forced out by the metropolitan’s rapid expansion over the past few decades. He said this is a cautionary tale of how urban planning can negatively impact Indigenous communities. AMAN’s Saiduani said the majority of the people set to move to Nusantara will most likely be from the upper-middle class, competing for economic opportunities with lower-middle populations and migrant workers from across the country.

“Only people with money will be able to live there,” said Darman, the fisherman. “If the new capital city truly happens, the negative impacts will first fall upon coastal communities who are fishers.”

This story was published with permission from

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