China Invests $17b in Indonesian Power Project

Jakarta Globe, Tito Summa Siahaan, May 29, 2013

China Power will harness the power of North Kalimantan’s Tayan River for
Indonesia’s largest power project. (JG Photo/Yudhi Sukma Wijaya)

Chinese companies China Power Investment Corporation and Anhui Conch Cement announced more than $17 billion of investments in Indonesia, underscoring the attractiveness and allure of the Southeast Asian nation to foreign investors.

China Power, a Chinese state-owned enterprise, has been granted permission by the Indonesian government to build what could be the archipelago’s largest-ever power plant project.

Xia Zhong, a vice president of China Power, met with Indonesia’s Energy and Mineral Resources Minister Jero Wacik late on Monday to discuss the company’s plan to develop 7,000 megawatts from hydropower plants on Kalimantan island.

The project will harness the power of the Tayan River in the newly created North Kalimantan province.

Jero told reporters in Jakarta on Monday that the Chinese firm will invest a total of $17 billion for hydroelectric plants in North Kalimantan.

“Construction will take seven years to be completed and will be divided into five phases,” he added.

China Power has concluded the preliminary study of the project and will proceed with its feasibility and environmental assessment impact study, Jero said.

“We expect to see the groundbreaking next year,” the minister added. “Construction for the first phase will be completed in one-and-a-half years. By 2015, the power plant will generate 700 megawatts of electricity,” said Jero.

The minister said that the government will not provide additional incentives.

The government has set the price level for renewable energy like hydropower considerably high to entice more investors. In comparison, the price for coal-fired power plants is around 4 to 9 cents per kilowatt-hour.

“They did not request for incentives. They think that the 24 cents per kilowatt-hour power purchase price for hydropower plant is good.”

In Indonesia, independent power producers must sell their electricity to state utility firm Perusahaan Listrik Negara, based on the government’s approved pricing.

China Power is also looking into the possibility of building a smelter for bauxite, according to Jero. “But they have yet to make any estimations,” he added.

Electricity generation is China Power’s core business and in total has power plants with a capacity to generate 80,074 MW of electricity.

Currently, the firm is building a 6,000 MW hydropower plant in Myanmar, from which the electricity will be channeled to mainland China.

China Power also has coal and aluminum assets.

Anhui announced its plan to build a cement plant in South Sulawesi at total investment of 2 billion yuan ($327 million), Bloomberg News reported on Tuesday.

Anhui’s main business in the manufacturing and selling clinkers and cement products. It distributes cement and clinkers under the brand named Conch.

ILO Prepares Building Safety Guidelines for Indonesian Garment Factories

Jakarta Globe, Erwida Maulia, May 28, 2013

Workers set up a tent as they demand for better pay in front of a garment factory
in Tangerang, Banten, in this April 10, 2013 file photo. (JG Photo/Fajrin Raharjo)

The Indonesian office of the International Labor Organization on Tuesday said it was preparing new infrastructure safety assessment guidelines for Indonesian garment factories in the wake of a building collapse in Bangladesh that killed over 1,100 people.

The ILO said it was drafting the new infrastructure assessment criteria under its Better Work Indonesia program, and would use it to appeal to Indonesian garment makers to ensure the safety of their factories.

“In a country that is prone to earthquakes and other natural disasters, it is imperative that employers ensure their buildings are structurally sound by regularly making sure that their buildings are in line with government regulations,” BWI program manager Simon Field said in a press statement on Tuesday.

BWI senior enterprise adviser Muhammad Anis Nugroho said that Indonesia already has comprehensive regulations on building safety, but admitted that implementation was always an issue.

“A public works minister regulation on this [building safety], for example, is quite detailed — there should be regular inspections, and so on,” Anis said. “But it uses phrases only experts on the matter can comprehend.”

The new ILO guidelines, Anis said, are expected to help factories comply with the existing regulations by translating the technical terms into “practicable” guidelines.

He said that it was still unclear how well the government has followed its own regulations.

However, he added, companies should want to improve the safety of their work environments following the collapse of the eight-story building that housed five garment factories in Bangladesh, dubbed the world’s worst garment industry disaster.

“We will involve the government in the creation of the guidelines,” Anis said. “In the end, we want this to help the government carry out inspections.”

Indonesia earned $12.5 billion from textile exports last year. The figure is expected to increase to $13.5 billion this year, with the United States and Europe remaining the country’s main markets.

In comparison, Bangladesh, the world’s second largest apparel exporter after China, records $20 billion annually from textile exports.

Jakarta Passes Sweeping Waste Management Regulation

Jakarta Globe, Lenny Tristia Tambun, May 21, 2013

Scavengers collect recyclable plastics at Bantargebang garbage dump
in Bekasi, West Java on March 29. (EPA Photo/Mast Irham)

A new regulation in Jakarta imposes fines of up to Rp 50 million ($5,120) on illegal dumping, while also implementing stricter mandates on eco-friendly bags, biodegradable packaging, littering and waste management.

Unu Nurdin, the head of the Jakarta Cleanliness Office, said the new rule, approved by the Jakarta Legislative Council on Tuesday, mandates that rubbish be put in designated locations and companies manage their waste, especially that which can lead to pollution and environmental degradation.

“If residents and companies do not meet their obligations, as arranged in the regulations, they will face sanctions. The sanctions range from administrative ones to fines of between Rp 500,000 to Rp 50 million,” Unu said after a plenary meeting of the City Council.

Article 126 of the regulation prohibits dumping waste into waterways and water reservoirs, streets, parks and public areas. It also says that waste must be disposed in integrated waste dumps (TPST) and final dump sites (TPA) between 6 a.m to 9 p.m.

“It is also prohibited to dispose waste at the TPST or TPA without a permit, burn waste that pollutes the environment, throw waste from a vehicle, use parts of streets as temporary waste dumps, manage waste that leads to pollution or environmental degradation,” Unu said.

Neighborhood units known as Rukun Warga were also given the authority to slap administrative sanctions on those households which fail to separate their waste into organic and inorganic.

Those responsible over the management of residential, commercial, industrial and other special areas, who are found negligent in providing facilities for waste management will also incur administrative sanctions and fines of between Rp 10 million to Rp 50 million.

Operators of public and social facilities which fail to provide facility for waste separation will incur administrative sanctions and fines of between Rp 1 million to Rp 5 million.

Manufacturers which fail to display matters related to reducing waster or waste handling on their packaging, or use packaging that cannot naturally decompose, may face administrative sanctions as well as fines of Rp 25 million to Rp 50 million.

Shopping center operators who do not use environmentally-friendly shopping bags will also face administrative sanctions as well as fine of between Rp 5 million and Rp 25 million.

“The governor can issue administrative sanctions, including fines, on individuals who intentionally dump waste outside of the allowed time, of up to Rp 100,000,” Uno said.

Litterers, including dumping waste into water ways and reservoirs, on the streets, in parks or in public areas, face a fine of Rp 500,000

Those caught littering from vehicles will also face the same fine. Salvagers working on piles or mounds of waste can also face a fine of a similar amount if they spread the waste.

“These fines will be sent to the regional treasury in line with the regulations and laws. We want the public to be waste conscious, so that we can also reduce floods in Jakarta,” he said.