Letter to EDC President Re: International Nickel Company (INCO) in Indonesia - October 23, 2002

Mr. Ian Gillespie
Export Development Canada
151 O'Connor
Ottawa Ontario
KlA 1K3

23 October, 2002

Dear Mr. Gillespie,

It is with grave concern that we write you today regarding potential EDC support for expanding projects of the International Nickel Company (INCO) in Indonesia.

As you may be aware, the history of INCO's mining activity in Indonesia is not characterized by consensual relations with affected communities nor by respect for basic environmental standards.

Since 1967, when INCO was awarded its first contract of work by the Soeharto regime, INCO has engaged in the appropriation of 1) several hundred hectares of ancestral lands of indigenous groups in South Sulawesi (including rice fields and other productive plots), and 2 ) several thousand hectares of resin and rattan forests formerly used as a basis of livelihood. While the development of nickel has been a source of economic gain for INCO and the central Indonesian government, for the Bungku, Dongi, Bugis, Toraja, and other communities of South Sulawesi, nickel development has constituted clear losses in social, economic and ecological terms.

At the present time INCO is attempting to expand both of these projects. In Indonesia this involves the displacement of Onepute Jaya, Bahumotefe, andother villages in South and Central Sulawesi. To date, members of these villages have not agreed upon relocation specifics with INCO, the key contention being INCO’s unwillingness to fully compensate villagers for the loss of fertile lands which would result from the expansion of INCO's mining activity from South to Central Sulawesi. INCO's plan for the expanded mine was approved without public review process and without the publication of environmental and social impact assessments.

Mr. Gillespie, we would like to emphaze the numerous risks involved in INCO’s expanding projects in Indonesia. These risks range from political, to social, to ecological risks - all of which translate into financial risks. If the EDC's 2001 Corporate Social Responsibility initiatives are truly aimed at positioning Canada as a world leader in responsible and ethical trade practices, then new or additional EDC financing for INCO projects in Sulawesi, Indonesia lies clearly outside of the EDC mandate.

We look forward to your confirmation of this as evidence to the claim that the EDC is committed to building confidence among the Canadian public, the media and advocacy groups (EDC Annual Report, 2001). We are certain that the above analysis of INCO projects in Indonesia is in line with Canadian values and mores around the social responsibility of corporations, including Export Development Canada.

Sincerely yours,

Pam Foster, Coordinator


Ivlegawati Soekarnoputri
President of the Republic of Indonesia
Instana Merdeka
Jl. Merdeka Utara,
Jakarta, Indonesia
Fax: 62 021 2302420

Canadian Embassy in Jakarta, Indonesia
World Trade Center 6th Floor
Jl. Jend. Sudirman Kav 29-31
Jakarta, Indonesia 12920
Tel: 62 021 525 0709
Fax: 62 021 571 2251

JATAM (Jaringan Advokasi Tambang)
Mining Advocacy Network:
Jl. Mampang Prapatan II No. 30
RT 04/07 -- Jakarta 12790
Tel. (0)21-79-1 1559
Fax. (()21-791 S 1 683