2.J.V. Timmermans, CFO, member Executive Board ING Group, vice-chairman Management Board Banking
3.S.J.A van Rijswijk, CRO, member Executive Board ING Group, vice-chairman Management Board Banking
4. Jeroen van der Veer, Chairman Supervisory Board ING Group
5.Hermann-Josef Lamberti, Member and vice-chairman Supervisory Board ING Group
6.Jan Peter Balkende, Member Supervisory Board ING Group
7.E.F.C.B. Boyer de la Giroday, Member Supervisory Board ING Group
8.H. W. Breukink, Member Supervisory Board ING Group
9.Mariana Gheorghe, Member Supervisory Board ING Group
10.Margarete Haase, Member Supervisory Board ING Group
Dear Sir and Madam,
We are ResponsiBank Indonesia Coalition, a group of Indonesian civil society organizations that is concerned about the role of finance industry in supporting sustainable development and poverty reduction. As part of Fair Finance Guide International, a global network that seeks to strengthen the commitment of banks and other financial institutions to social, environmental, and human rights standards; we believe that the finance industry must go beyond the pursuits of profits as their main consideration to incoorporate the human and environmental dimensions into their investment decision making.
Since 2000, annual investments in coal-fired power plants worldwide have been surprisingly robust. In recent years, the amount of funding for coal power has exceeded that of gas and oil combined (IEA World Energy Investment report, 2016). Coal-fired power plants are being built in China, India, Southeast Asia, and parts of Africa, home to most of the global population. In Indonesia, the Cirebon Coal-fired Power Plant Project - Unit 2 is estimated to require an investment of USD 2.1 billion that involves the construction, ownership, and operation by PT. Cirebon Energi Prasarana (CEPR) of an ultra-supercritical coal-fired power plant with an installed capacity of 1,000 Mega Watt in Cirebon Regency, West Java, Indonesia.
We recognize that ING Bank N.V. is among the lender syndicate commited to financing the Cirebon Coal-fired Power Plant Project - Unit 2 despite of the bank’s new coal policy adopted in November 2015 “to end financing of coal-fired power plants and thermal coal mines worldwide”.
As one of the 10 first adopters of the Equator Principles (EP) in 2003, ING is part of “Equator Principles Financial Institution (EPFIs) commit to implementing the EP in their internal environmental and social policiesprocedures and standards for financing projects and will not provide Project Finance or Project-Related Corporate Loans to projects where the client will not, or is unable to, comply with the EP”. ING Bank N.V. should uphold their commitment to comply with EP and revoke their loan to Cirebon Coal-fired Power Plant Project - Unit 2due to following reasons:
1.The project has been subjected to ongoing criticism and protest in Indonesia. The existing power plant in the region, Cirebon Coal-fired Power Plant Project - Unit 1, has endangered livelihood of small-scale fishermen and salt farmers due to massive pollution water contamination, and destruction of biodiversity within the coastal area.
2.Environmental damage also caused potential depriviation of health condition of the community. It is concerned that expanded power plant should make the people’s quality of life even worse.
3.The opposition to the project resulted to human rights violation in terms of terror, intimidation, and social conflicts amongst the affected communities.
4.The local officials did not satisfy all legal and procedural requirements before clearing the project’s environmental impact assesment (AMDAL). AMDAL and environmental permit were issued without legally required consultations with the affected communities.
5.The project has violated domestic law as the power plant is to be built in Mundu, an area that is not designated for such purposes (Ref to Regional Regulation No. 17 of 2011 on Cirebon Regency Spatial Planning year 2011-2031).
6.Coal-fired power plants release more greenhouse gases per unit of energy than any other electricity source. It is contraproductive to Paris Agreement of 2015 on the commitment of limiting global temperature increase to 2C, and preferably 1.5C.
7.INGas a financial institution that “finances the generation of electricity, with more than 58% of our project financing plus other lending awarded to renewable energy (wind, solar, water and geothermal power) around the whole world in 2016” must rather develop Indonesia’s huge renewable energy potentials instead of further deepening country’s dependence on coal for decades to come.
We do hope that ING will wisely respond to our complaint and uphold the highest standards in fair and responsible investments. We believe that your business represents your values and contribution for sustainable development worldwide. Therefore, we strongly request ING to stop financing Cirebon Coal-fired Power Plant Project - Unit 2.We are looking forward to hear about your follow up steps and how you will address our complaint in socially responsible way. Should you need to have further dialogue, please do contact us. Thank you.
National Coordinator of ResponsiBank Indonesia Coalition