We know that the coal industry causes climate change. We know that it harms our health through deadly air pollution. And we know that across the world, coal is struggling to compete with cheaper and cheaper clean energy.
The Japanese Government knows this, and yet it continues to be one of the biggest public financiers of coal power in the world, second only to China.
But there is another, less-discussed issue surrounding Japan’s coal plant plans – the increasing corruption risk.
The scandals are coming thick and fast. The ongoing Riau-1 power plant scandal, where several high-profile Indonesian politicians have been convicted of accepting bribes to award a coal plant contract to a company, is broadening. The President-Director of PLN, the Indonesian state-owned power company, has now been named as a suspect in the case. This is a major development, given that PLN are in charge of planning the new fleet of coal-fired power stations that Japan is a big investor in.
Meanwhile, Hyundai Engineering & Construction have admitted to making payments to an Indonesian politician in relation to a coal-fired power plant project in Cirebon, Indonesia that have been characterised as bribes by The Korea Times. This is particularly concerning to Japan, because Marubeni Corporation own the biggest share of the coal plant, and JBIC, NEXI and three of the biggest Japanese commercial banks are all involved in financially supporting the project.
This follows revelations in recent years that Marubeni and French power company Alstom conspired to bribe an Indonesian MP to secure a coal plant expansion contract.
On top of all this, Global Witness have highlighted different, previously unrevealed risks.
Our investigation reveals how Sandiaga Uno, who was a high-profile Vice-Presidential candidate in last month’s Indonesian Presidential election that happened on April 17th, had a hand in payments of at least US$43 million from a major Indonesian coal company to an obscure offshore firm, and that he may have secretly benefited from these payments in some way.
Uno was a Vice Presidential candidate for the April 17th election, but there is a lot of speculation he could be the frontrunner in the next Indonesian Presidential election. This raises issues of grave public concern about the former coal business dealings of an extremely powerful politician in one of the world’s largest countries.
We also released a second story focusing on unanswered questions about a former business deal of General Luhut Pandjaitan, a serving senior minister in the Indonesian Government. This outlines the sale of Pandjaitan’s coal company Toba Bara Sejahtra, for an undisclosed amount, to an unknown buyer. Pandjaitan is a close advisor to Joko Widodo, Indonesia’s President.
These stories (now published on our website) have attracted considerable attention in Indonesia. They are only the first two stories in a series that we are publishing.
All these findings should ring alarm bells for the Japanese Government, which, despite Shinzo Abe’s vocal support for the Paris climate agreement and claims to be a ‘climate leader,’ is still supporting coal plants to the tune of billions at home and abroad. There is no climate change leadership that involves continuing to fund coal plants anywhere in the world.
These are just the beginning of Global Witness’ investigations into the Indonesian coal sector. We will be releasing further reports in the coming months.
Prime Minister Abe must be aware that continuing to invest in coal power across the world is not only bad for climate change – but he is also exposing Japan’s reputation to the risk of becoming involved in coal projects tainted by corruption.
We call on PM Abe and the Japanese Government to immediately end its financial support for coal power overseas.
Adam McGibbon is a senior campaigner with the international anti-corruption organisation Global Witness.