Legal liability for environmental damage compensation by mining companies in Raja Ampat

Mining companies in Raja Ampat have sparked pressure from Commission IV of the Indonesian House of Representatives (DPR RI) to demand that four mining companies, whose business licenses have been revoked, pay for the damage caused by mining activities that violate environmental regulations in implementing Presidential Regulation Number 5 of 2025 on Forest Area Regulation by adhering to the principles of sustainability and environmental protection. The method used in this research focuses on the application of law in society, its impact, and the interaction between law and social behavior by using a case study approach to analyze legal issues through specific case studies. The results of this study indicate issues with supervision in the permit issuance process and company productivity, leading to violations that cause extensive environmental damage. The law enforcement of the sanctions imposed on the Company is not strict and does not meet the principle of administrative sanctions as a means of public law, which involves the imposition of burdens by the government on its citizens in response to non-compliance with obligations arising from legislation, also known as in cauda venenum, the poison in the tail.

1 Introduction

Indonesia has become one of the countries with the largest nickel reserves in the world. The geographical region of Indonesia is believed to hold 52% of the world’s nickel reserves. According to the United States Geological Survey, Indonesia’s nickel reserves reach 21 million tons, while the Geological Agency states that Indonesia’s nickel resources even reach 11.7 billion tons (Syarifuddin, 2022). The natural wealth and resources of Indonesia are a gift from God Almighty, as are the mining results. However, in terms of managing mining results, issues may arise, particularly related to mining permits that could have legal implications. The granting of mining permits is the authority of the local government, which must be carried out in accordance with administrative order. The government’s authority in this case is related to the government’s right to issue permits in the mining sector (Haris, 2015).

The application of mining law principles in Indonesia is based on several main principles aimed at regulating mining activities in a fair, sustainable, and environmentally conscious manner (Palempung et al., 2023). These principles are outlined in various regulations, especially Law Number 4 of 2009 on Mineral and Coal Mining, and its amendments in Law Number 3 of 2020 (Natsir et al., 2024).

Sustainable and Environmentally Conscious Principles: Mining activities must consider environmental preservation and sustainable development. This includes managing environmental impacts, post-mining land reclamation, and the efficient use of natural resources;

Principles of Benefit, Justice, and Balance: Mining activities must provide economic, social, and environmental benefits to the community, and maintain a balance between the interests of the state, entrepreneurs, and the community;

Principle of Favoring National Interests: The primary priority in the management of natural resources is national interests, including meeting domestic needs, increasing added value, and developing strategic industries;

Principles of Participation, Transparency, and Accountability: The community has the right to participate in decision-making related to mining activities, as well as the need for transparency and accountability in the management and oversight of mining activities;

Principle of State Control: Based on Article 33 paragraph (3) of the 1945 Constitution, the state has control over the earth, water, and natural resources contained therein, and manages these natural resources for the greatest prosperity of the people;

Principle of Good Mining Practice (GMP): Mining activities must be conducted in accordance with good mining engineering principles, including planning, the application of appropriate technology, resource conservation, and environmental impact control.

It is widely known that the interest of general mining contractors is profit-oriented (Sutedi, 2022), but also burdened with the responsibility of community development (corporate social responsibility of general mining companies), based on the provisions of the contract of work, while the government, on the other hand, is interested in the certainty of revenue/income from the government’s share (government take) from the results of mining products, both from taxes and royalties, dead rent (fixed fees)/production fees, as well as taxes from related general mining service companies, in order to meet the revenue for the state budget at the central level or the original income of the regional government as a public responsibility and to fulfill the mandate to prosper the people (Nugroho et al., 2018).

Based on the press release from the Ministry of Energy and Mineral Resources of the Republic of Indonesia Number: 054. Pers/KM.01.03/SJI/2025 dated June 10, 2025, the government revoked four nickel mining business licenses (IUP) operating in the Raja Ampat area, Southwest Papua. This decision was made after the four companies, namely PT Anugerah Surya Pratama (ASP), PT Mulia Raymond Perkasa (MRP), PT Kawei Sejahtera Mining (KSM), and PT Nurham, were found to have violated environmental regulations in implementing Presidential Regulation Number 5 of 2025 concerning the Regulation of Forest Areas by adhering to the principles of sustainability and environmental protection. Based on the regulations regarding the issuance of permits, an impact analysis and stages should have been conducted before the mining permit was issued.

The issues that have occurred with mining companies in Raja Ampat have prompted a demand from Commission IV of the Indonesian House of Representatives (DPR RI) for four mining companies whose business licenses have been revoked to pay for the damages caused by their mining activities. This demand arises due to indications of environmental pollution and violations of regulations related to the management of small islands (Harjono, 2021).

Compensation is one of the means or methods for the protection of victims. Every compensation is due to the loss suffered by the victim as a result of unlawful acts or default. Meanwhile, the definition of loss in Black’s Law Dictionary is described as an undesirable outcome of a risk; the disappearance or diminution of value, usually in an unexpected or relatively unpredictable way (Hanafi, 1990). The translation of loss or damage is the undesirable outcome of a risk; the disappearance or reduction of value, usually the disappearance or reduction of value in a way that is expected or relatively unpredictable. Yahya Harahap argues that compensation is “real loss” or feiteijkenadeel (Harahap, 1982).

The forms of compensation sanctions that can be applied to business actors for violations committed can be classified as follows: Forms of compensation for environmental damage can be distinguished into several types, both under Indonesian national law and international practices (Dewi, 2022). Here is the explanation of the forms of compensation: (1). Material Compensation (Financial Compensation): The company is required to provide money as a form of compensation to: the state, if the damage occurs in conservation areas, protected forests, or state-owned properties. Communities directly affected (for example, loss of livelihood, damage to water sources, gardens, etc.). An example is the payment of environmental recovery funds or direct compensation to affected residents. (2) Environmental recovery (Ecological Rehabilitation) requires the perpetrator to restore the environment to its original condition or close to its original condition (Pattynama, 2025). Included in this: Reforestation or revegetation of deforested land due to mining, cleaning up waste or contaminants from soil and water, and restoring damaged flora and fauna habitats. (3) Immaterial Compensation: Although difficult to measure, environmental damage often impacts the loss of cultural and spiritual values (especially in areas like Raja Ampat), as well as the disruption of public health and comfort. This compensation can take the form of special compensation or the granting of certain rights, such as access to healthcare services or the development of social facilities (Watung, 2024). (4) Administrative Sanctions and Fines: In addition to compensation, companies can be subjected to administrative fines, revocation of business licenses, and the obligation to pay environmental funds or reclamation and post-mining guarantee funds. (5) Special Corporate Social Responsibility (CSR): Companies may be required to build environmental infrastructure (such as waste processing, clean water) and provide training or business assistance to affected communities (Azmi, 2024).

The victims of environmental damage are not only the country, society, and the surrounding environment, but the victims who deserve attention are the future and the generations of the nation who will feel the impact of that environmental damage. This can be seen from the example of the Supreme Court decision Number 88/PID-LH/2019/PT SMR, which contains a case regarding the oil spill in the waters of Balikpapan that caused environmental damage and even resulted in several deaths. In this case, it was explained that the oil spill caused damage to mangrove forests, killed marine biota, and resulted in the deaths of 5 people. The details of this case also help explain that environmental crimes can cause losses to a wider range of victims. The death of marine biota and the damage to mangrove forests indicate that victims of environmental crimes are not only humans but can also involve other components, such as animals or forests (Mutiara, 2022).

This research aims to address the issues arising within the mining business climate in Indonesia. This study focusses on the disproportionate legal liability imposed on mining business actors compared to the consequences of the impact caused by mining. This research also differs from previous studies that discussed environmental permits, environmental impacts on communities, and environmental restoration due to the effects of mining operations.

2 Methods

The method used in this research focusses on the application of law in society, its impact, and the interaction between law and social behavior, using a case study approach to analyse legal issues through specific case studies. The data collection techniques in this study involve the use of digital technology for online surveys, social media data analysis, and the use of specialised applications for data recording. Data processing in this study involves several key steps, from data collection, data cleaning, data analysis, to data presentation. The analytical technique in this study uses a constructive analysis method by building a new legal analysis framework or model based on research findings, including formulating new legal principles or more comprehensive legal concepts. The online survey mentioned in this study involved confirming information regarding the requirements and legal basis of mining operations with mining business operators using Google Forms, followed by analysis. Then, social media data is used to adjust existing data to the legal facts occurring in the current conditions. The case sampling strategy uses official data obtained from the website of the Supreme Court of the Republic of Indonesia regarding mining cases in Indonesia. The target respondents are focused on communities affected by illegal mining activities and corporations proven to have violated regulations in managing mining operations. The specific questions in this regard are how to hold illegal mining business actors legally accountable and what recovery sanctions are available to victims against illegal mining business actors.

3 Literature review

The literature review in mining law research involves a critical examination of various legal sources and scientific literature relevant to understanding legal issues in the mining industry. This includes laws such as Law Number 2 of 2025 concerning the Fourth Amendment to Law Number 4 of 2009 concerning Mineral and Coal Mining (Minerba), Government Regulation Number 96 of 2021 concerning the Implementation of Mineral and Coal Mining Business Activities, court decisions related to mining cases, journal articles, textbooks, and research reports related to mining. The aim is to identify knowledge gaps, key issues, and different perspectives in the field of mining law. 1) Knowledge gaps in mining law issues, where natural resource management, particularly mining, often neglects citizen involvement in decision-making, and citizens who do not have much understanding of the processes and requirements in mining business activities become targets and victims of the seizure of citizens’ rights to their land. 2) The main issues in this study discuss corporate responsibility for violations in mining management, light sanctions against unlicensed mining business actors in managing mining, and authority in determining mining business areas. 3) Different perspectives in the field of mining law, where there is a change in authority in determining mining management permits, which were previously granted to local governments but are currently decided by the central government (Johnson et al., 2023). The theoretical basis of this research refers to Hans Kelsen’s opinion in his theory of legal responsibility, which states that: “a person is legally responsible for certain actions or that they bear legal responsibility, which means they are liable for sanctions in the case of wrongful acts.” Furthermore, Hans Kelsen stated that: “failure to exercise the due care required by law is called negligence; and negligence is usually considered another type of fault, although not as severe as fault committed with anticipation and intent, with or without malice, of an adverse consequence” (Manao, 2022).

4 Discussion

4.1 Nickel mining company on Gag Island and Raja Ampat

Nickel mining in Raja Ampat has targeted Gag Island since the Dutch colonial era, especially during the period from 1920 to 1958. From 1960 to 1982, a foreign capital company from the United States, PT Pacifik Nickel Indonesia, continued nickel mining activities in Raja Ampat. The negotiations between PT Antam and PT Broiling Hill Proprietary (BHP) Billiton from Australia in 1996–1998 eventually led to the establishment of PT Gag Nikel. Initially, Asia Pacific Nickel held 75 percent of PT Gag Nikel’s shares, while PT Antam was entitled to 25 percent of the shares. In 2008, PT Antam acquired Asia Pacific Nickel’s shares. PT Gag Nikel began nickel mining in 2003. Currently, Gag Island has nickel reserves amounting to 171,048,843 wmt. Nevertheless, the people of Gag Island generally seek a livelihood in the fisheries sector. The imbalance in the management of natural resources and the recovery system due to environmental damage from nickel mining activities (Ramanda et al., 2025) in the Raja Ampat region, it creates serious threats and social jealousy among the communities living near the mining area (Nainggolan, 2016).

PT Gag Nikel is one of the 13 mining companies with open-pit mining permits in protected forest areas based on Presidential Decree Number 41 of 2004. This dispensation is an exception to the open-pit mining ban in the Forestry Law Number 41 of 1999, because the company’s contract was in effect before the law was enacted. There are 5 companies with mining permits in Raja Ampat, but to date, PT Gag Nikel is the only one reported to still be producing nickel in Raja Ampat. PT Gag Nikel conducts mining activities on Gag Island with an area of 6,030.53 hectares, PT Anugerah Surya Pratama has a non-mining area of approximately 109 hectares on Manuran Island, which has a total area of only 743 hectares, PT Kawei Sejahtera Mining has opened an area of 89.29 hectares on Kawe Island, which has a total area of 4,561 hectares and includes production forest areas, and PT Mulia Raymond Perkasa has opened two mining areas on Manyaifun Island covering 21 hectares and on Batang Pele Island covering 2,000 hectares.

The granting of mining permits to PT Gag Nikel will threaten the ecosystem in Raja Ampat and cause the impact of nickel mining, namely sedimentation that covers the coral. Moreover, all the islands in the Raja Ampat area are surrounded by coral. Coral is a habitat that must be preserved because it is very important for marine life. The issue of mining activities in the Raja Ampat region must be addressed immediately by halting all mining activities and implementing regulations related to environmental protection and mineral and coal mining (Gosal, 2024). The prohibition of mining activities is also reinforced by the Supreme Court (MA) Decision Number 57 of 2022 and MA Decision Number 35 of 2023. The Supreme Court’s decision then considered that the implementation of the mining activity ban on this small island was carried out unconditionally. The Supreme Court’s decision emphasizes the importance of protecting coastal areas from environmental exploitation activities carried out by mining companies without any conditions or factors. In the context of the management and exploitation of mineral resources, the placement of the state on par with private/foreign mining companies through the contract system is a concrete form of undermining the state’s sovereignty over its right to control mineral resources (Hasbi, 2021).

Based on Figure 1, the threat of environmental damage is becoming more widespread, and Figure 2 shows that the average core zone area is 2% of the total conservation area in the waters of Raja Ampat, which can maintain the ecosystem balance in the waters of Raja Ampat. Special attention from the government to preserve and protect the Raja Ampat region by enforcing laws and applying strict sanctions, as well as restoring environmental damage (Kelana, 2017) and empowering the local residents of the Raja Ampat area to participate in monitoring mining activities as a practical solution that can currently be implemented by the government through the relevant ministries (Subagiyo et al., 2017).

Figure 1

Figure 1. Environmental damage in Raja Ampat.

Figure 2

Figure 2. Conservation area in Raja Ampat.

4.2 Legal liability for environmental damage compensation by mining companies in Raja Ampat

A Limited Liability Company is a legal entity, both individuals and legal entities have the authority to bear rights and obligations, thus individuals and legal entities are said to have legal authority (Prananingrum, 2014). The company does not have a soul, so it must form a company management to become a full legal subject. The company management will be the company’s organ tasked with helping the company obtain rights and fulfill its obligations. The corporate organs consist of the General Meeting of Shareholders (GMS), the board of directors, and the board of commissioners. The executor of legal actions in accordance with the Limited Liability Company Law is the Board of Directors, which is the alter ego of the Limited Liability Company (Isfardiyana, 2015).

Article 1 paragraph 3 of Law Number 40 of 2007 concerning Limited Liability Companies explains, “Social and Environmental Responsibility is the Company’s commitment to participate in sustainable economic development to improve the quality of life and the environment that is beneficial, both for the Company itself, the local community, and society in general.” This civil legal responsibility arises from the unlawful acts committed by the Limited Liability Company. The accountability of the four companies can be realized through social and environmental compensation for the damage that occurred in Raja Ampat (Matheosz, 2024). The responsibility for unlawful acts is regulated by Article 1,367 of the Civil Code, which stipulates that employers and those who appoint others to represent their affairs are liable for losses caused by their servants or subordinates in performing the tasks assigned to those individuals. The provision in the above article applies the principle of respondeat superior, which means that the superior is responsible for the actions of their subordinates (Ho et al., 2024), as long as it is done within the scope of the designated work affairs and causes losses to other parties. The loss may arise due to the mistake or negligence of the subordinate. This principle is also known as the doctrine of vicarious liability, which means indirect responsibility or responsibility for the actions of others.

The revocation of permits for the four companies suspected of causing environmental damage through their business activities in Raja Ampat does not provide a recovery impact for the damage caused. In addition to the revocation of permits, the four companies can be subjected to compensation sanctions against the state, environment, and communities affected by the environmental damage, as regulated in Article 85 and Article 87 of Law Number 32 of 2009 concerning Environmental Protection and Management. Article 85 paragraph 1 explains, “Resolution of environmental disputes outside the court is conducted to reach an agreement regarding: a. the form and amount of compensation, etc.” Article 87 explains, “Every business and/or activity responsible for unlawful acts in the form of pollution and/or environmental destruction that causes loss to others or the environment is obliged to pay compensation and/or take certain actions.”

Based on their nature, administrative sanctions need to be differentiated into sanctions that are corrective/restorative (her-stelsancties), sanctions that are punitive (bestraffende sancties), and sanctions that are regressive (regressieve sancties). Regarding the environmental damage issues occurring in Raja Ampat, the three types of administrative sanctions must be applied to the actions of the four companies, namely PT Anugerah Surya Pratama (ASP), PT Mulia Raymond Perkasa (MRP), PT Kawei Sejahtera Mining (KSM), and PT Nurham, not just the revocation of permits which is a regressive measure. Restorative sanctions (her-stelsancties) should be imposed by setting fines for the damage, and punitive sanctions (bestraffende sancties) should be applied by imposing fines for the damage caused to the companies as a deterrent effect in achieving sustainable development for companies relying on agrarian resources (Table 1).

Table 1

Table 1. Explains environmental damage caused by mining activities carried out by companies in Raja Ampat without valid permits.

Based on the data and analysis presented, there are weaknesses in law enforcement regarding violations related to coastal area management, caused by the formulation factors in the laws governing coastal area management. The weakness lies in the ambiguity of the norms formulated regarding violators in corporations or legal entities, so these norms often target individual violators who do not understand the regulations (Ramadhan et al., 2025).

The application of sanctions also becomes an issue in legal norms against companies that commit legal violations. Problems often arise from the inconsistency in the application of sanctions between individuals and corporations, where corporations tend to receive special treatment by having their licenses revoked rather than being subjected to compensation or fines, which are part of administrative sanctions (Amalia, 2025). The deterrent effect is more emphasized on individual perpetrators, whereas the consequences of such violations have a much broader impact when corporations commit legal violations in their operations and production (Hadi and Permata, 2020).

The article on compensation to the company for violations in the context of civil law in Indonesia is also regulated in Article 1,365 of the Indonesian Civil Code regarding Unlawful Acts (PMH). This article states that any unlawful act causing harm to another person obliges the perpetrator to compensate for the loss. The compensation article in the context of Law Number 2 of 2025 concerning the Fourth Amendment to Law Number 4 of 2009 concerning Mineral and Coal Mining (Minerba) is also regulated based on Article 145 paragraph (1) of the Mineral and Coal Law, which stipulates the obligation to compensate the community directly affected by mining activities (Muskibah et al., 2021). Based on the above, in addition to the revocation of permits, the four companies that have violated their operations in the Raja Ampat area may be subject to compensation sanctions (Figures 3, 4).

Figure 3

Figure 3. The poverty rate in mining areas.

Figure 4

Figure 4. Data profile of poverty BPS RI year 2013/2024.

4.3 Exploitation of natural resources affects the increase in poverty rates among residents living in mining areas

Land Resources are a production factor that cannot be separated from economic activities. Due to the limited area of land, the value of a piece of land per unit area (Ha) increases. Especially land located in residential areas, bustling places, and business centers/markets causes land prices to soar. According to Raleigh Barlowe, landowners tend to use their property for purposes that yield the highest income. In relation to this, they will use their land according to the concept of highest and best use (Malik, 2017). The presence of mining activities managed by the Company will automatically cause the community to lose its primary source for improving their quality of life (Mardani, 2018). The mass granting of permits by the government for mining operations without considering the social conditions and the function of the area means that the state is deliberately torturing its own people (Astuti and Putranti, 2018).

Land use conducted illegally or outside the standard provisions set by the Law not only causes damage to mining objects but also results in the loss of income for communities living near mining areas (Fatichah et al., 2023). The exploitation of natural resources often benefits mining companies and certain parties, while local communities affected by environmental damage often do not receive commensurate benefit (Komnas, 2021). This has become one of the factors causing economic inequality and the increase in poverty rates.

Based on the data above, it shows that the poverty rate in mining areas is often high even though these areas are rich in natural resources (Zaini, 2017). This is caused by various factors, including environmental damage, lack of alternative livelihoods, and the unequal distribution of economic benefits from the mining industry. Some mining regions have even shown an increase in poverty rates in recent years (Rusyidi and Fedryansah, 2018).

Based on data analysis and sanctions for legal violations committed by mining business actors as regulated in Law Number 2 of 2025 concerning the Fourth Amendment to Law Number 4 of 2009 Jo Law Number 3 of 2020 concerning amendments to Law Number 4 of 2009 concerning Mineral and Coal Mining. The main sanctions include imprisonment and fines for illegal mining activities, while other sanctions that may be imposed include administrative sanctions, asset confiscation, and even the obligation to provide reclamation guarantee funds.

4.4 The process of enforcing illegal mining laws in Malaysia

Dalam penegakan hukum pertambangan illegal yang terdapat di negara Malaysia memiliki perbedaan yang sangat fundamental. Malaysia melakukan penegakan hukum atas pertambangan illegal dengan melibatkan beberapa badan negara yang bergabung dalam melakukan penegakan hukum yaitu badan khusus bidang penegakan hukum pertambangan, serta kepolisian. Perbedaan tersebut terdapat pada Lembaga khusus yang dibentuk untuk menegakkan pelanggaran hukum atas sumber daya alam di Indonesia penegakan hukum atas sumber daya alam hanya diberikan kepada kepolisian dan kejaksaan tanpa adanya badan khusus diluar aparat penegak hukum yang dirumuskan dalam sistem peradilan pidana di Indonesia.

Mining operations in Malaysia must undergo an environmental impact assessment (EIA) process, regulated by the Environmental Quality Act 1974 (EQA), before obtaining a permit to operate. Indonesia has also established a number of requirements and conditions in this regard, but they are not specifically regulated in a separate law, making it difficult to effectively and strictly monitor law enforcement for violations in mining operations related to environmental impact.

5 Conclusion

The government’s special attention to maintaining and protecting the Raja Ampat region by enforcing the law and applying strict sanctions, implementing environmental damage recovery, and empowering the local residents of the Raja Ampat area to participate in monitoring mining activities is a realistic solution that the state can currently implement through legal policies. Regarding the environmental damage issues occurring in Raja Ampat, the three characteristics of administrative sanctions must be applied to the actions of the fourth company.

Data availability statement

The datasets presented in this study can be found in online repositories. The names of the repository/repositories and accession number(s) can be found in the article/supplementary material.

Author contributions

YS: Writing – original draft, Formal analysis, Writing – review & editing. RS: Writing – review & editing, Methodology, Conceptualization. SZ: Validation, Data curation, Writing – review & editing.

Funding

The author(s) declared that financial support was not received for this work and/or its publication.

Conflict of interest

The author(s) declared that this work was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.

Correction note

This article has been corrected with minor changes. These changes do not impact the scientific content of the article.

Generative AI statement

The author(s) declared that Generative AI was not used in the creation of this manuscript.

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