August 18, 2023
Mr. Shunichi Suzuki, Minister of Finance
Mr. Nobumitsu Hayashi,Governor, Japan Bank for International Cooperation (JBIC)

Re: Request for Measures to Suspend the Loan Disbursement andMandatory Prepayment Concerning the Cirebon Coal-Fired Power Plant
Project - Expansion Plan in Indonesia
Bribery allegations have been raised since 2019 with respect to the Cirebon Coal-Fired Power
Plant Project - Expansion Plan (Unit 2, 1,000 MW) (hereinafter "Unit 2 Project") in West Java,Indonesia, for which Japan Bank for International Cooperation (JBIC) has been disbursing theloans since November 14, 2017.[1] And in March of this year, the Indonesian Corruption
Eradication Commission (KPK) indicted the former Cirebon regent in relation to a series ofbribery and money laundering, including cases related to the Unit 2 Project, and the court trials
have continued.
Today, the former Cirebon regent was convicted of bribery and money laundering, including
the cases related to the Unit 2 Project. In addition, the testimony of witnesses at the court
trials and the statement of the defendant, the former Cirebon regent, mentioned that former
senior managements of Cirebon Energi Prasarana (CERP), who is the project proponent of theUnit 2 Project and the direct borrower of JBIC, were involved in bribery activities.
They are very crucial facts that bribery in connection with the Unit 2 Project was definitely
committed, and that not only Hyundai Engineering and Construction Co, (hereinafter"Hyundai"), the EPC contractor for the Unit 2 Project, but also former senior managements ofCEPR, the borrower of JBIC, were also involved in the said bribery, which have been revealed
through the court trials and the verdict. We strongly urge JBIC, as official export credit agencies(ECAs), to promptly take measures to suspend its loan disbursement to the Unit 2 Project andto enforce mandatory prepayment of loans that you have disbursed, in accordance with the"Recommendation of the Council on Bribery and Officially Supported Export Credits”(hereinafter "OECD Bribery Recommendation")[2].
In the more than 30 court trials that have taken place since March of this year, the indictment
and the testimonies of up to 237 witnesses have revealed detailed information about themassive bribery and money laundering (totaling 64 billion rupiah). The cases related to the Unit
2 Project generally include the followings (positions of the persons indicated are of that of thetime of the cases);1Two senior managements of CEPR (one of them is CEPR President Director, Heru
Dewanto, and the other is Teguh Haryono) handed over 1 billion rupiah to the Cirebonregent, requesting the Cirebon regent to ensure the smooth issuance of the construction
permits for the Unit 2 Project that CEPR had applied for, and also to provide support indealing with the demonstrations against the construction of Unit 2. (According to thestatement of the defendant, the former Cirebon regent, 300 million rupiah was provided
to the defendant, and although the amount is unknown, money was paid directly fromCEPR to "Forkopimda" (Forum Koordinasi Pimpinan Daerah: Cirebon Regent, Chief ofPolice, Chief of Prosecutor, Commander of Military in Cirebon regency).[3]);Two senior managements of CEPR (same as above) introduced a few officials of Hyundai(Deputy General Manager Herry Jung, Administration Manager Kim Tae Hwa, Unit 2Construction Site Project Manager Am Huh) to the Cirebon regent. CEPR informed theCirebon regent that Herry Jung would continue to handle the permit process in relation
to the CEPR's application. They also asked the Cirebon regent to support CEPR incompleting the application process promptly and to deal with the demonstrations. It wasalso informed that the "operational funds" of the Cirebon regent would be provided by
the above three members of Hyundai.

After Herry Jung of Hyundai told the Cirebon regent again about the problems with theconstruction permits and the residents' demonstrations, the regent ordered theDPMPTSP (the Investment and One-Stop Integrated Service) to help the CEPR accelerate
the permitting process. After helping with the permitting process, Herry Jung of Hyundai
paid 50 million rupiah directly to the DPMPTSP;The Cirebon regent requested "operational funds" to calm down the protests of local
residents. The "funds" were to be paid by Hyundai as a contract for fictitious consulting
services (10 billion rupiah);

The Cirebon regent asked the Beber district head to let her son-in-law (who was also theson-in-law of the district head of Astanajapura district, where the Unit 2 project islocated)'s company, Milades Indah Mandiri (MIM), participate in a fictitious contract
with Hyundai. However, MIM was not a consulting firm, but merely an event organizercompany;

On June 14, 2017, a fictitious project contract (totalling 10 billion rupiah) was signed
between MIM and Hyundai for consultancy work of the Unit 2 Project;Between June 2017 and October 2018, "funds" of 7.02 billion rupiah were paid to theCirebon regent in four installments by a few officials of Hyundai through MIM;

In July 2017, the Cirebon regent and others traveled to South Korea, with Hyundai
covering the expenses.
2For the bribery case related to the Unit 2 Project, the former Cirebon regent and a former senior
official of Hyundai had already been identified as suspects by the KPK in 2019, and two former
senior managements of CEPR had also been banned from traveling outside Indonesia.
Taking seriously the today’s conviction of the former Cirebon regent in the bribery case related
to the Unit 2 Project, and the fact that several testimonies have revealed that former seniormanagements of CEPR, a borrower of JBIC, were involved in the bribery, JBIC must takeappropriate measures including suspension and cancellation of the unutilized portion of loans,and mandatory prepayment.
With regard to the Unit 2 project, many issues have been pointed out, including the impact on
local residents, such as loss of means of livelihood and environmental pollution; illegal
processes, such as violation of the Cirebon Regency Spatial Plan and the improper issuance ofenvironmental permits; human rights violations, such as harassment and intimidation against
residents who express opposition and concerns; and retrogression against climate change
measures. Thus, there have been repeated calls for the project to be halted. To begin with, thenecessity to implement the Unit 2 project in the Java-Bali power grid, which is expected to havea reserve margin of 40-60% (from 2021 to 2030) [4], has also been questioned.
In such circumstances, in November 2022, a memorandum of understanding (MOU) was signed
between the project owners (excluding JERA, which has a stake in CEPR), the Indonesian
government, and the Asian Development Bank (ADB) for the early retirement of the adjacent
Cirebon Coal-Fired Power Plant Unit 1.[5] This development implies that the project owners,
the Indonesian government, and the Japanese government, as the largest donor to the ADB,
recognize the need to address the imminent climate crisis. The dangerous heat wave andtorrential rains, which you are experiencing right now in Japan and other parts of the world,should make you realize this even more strongly. The reasons for justifying the continuation or
the start of commercial operation of the Unit 2 Project, which has been unfairly pushed throughin a manner that also involves bribery, are now further disappearing.
Therefore, we request that JBIC promptly withdraw its support for the Unit 2 Project, so thatthe local communities, who have already suffered serious impacts on their means of livelihoodand health due to the construction and operation of the Unit 1 Project and the construction ofthe Unit 2 Project, will not suffer further damage.

Sincerely,Rapel (Rakyat Penyelamat Lingkungan)
WALHI West Java
Wahana Lingkungan Hidup Indonesia (WALHI)
Friends of the Earth Japan
Japan Center for a Sustainable Environment and Society (JACSES)
Kiko Network3Mekong WatchCc:
Mr. Yasutoshi Nishimura, Minister of Economy, Trade and Industry
Mr. Atsuo Kuroda, Chairman and CEO, Nippon Export and Investment Insurance (NEXI)
Mr. Yoon Hee-sung, Chairman & President, The Export-Import Bank of Korea (KEXIM)
Mr. Steven van Rijswijk, CEO, ING Bank N.V.
Mr. Hironori Kamezawa, President & Group CEO, Mitsubishi UFJ Financial Group, Inc.
Mr. Jun Ohta, Director President and Group CEO, Sumitomo Mitsui Financial Group, Inc.
Mr. Masahiro Kihara, President & Group CEO, Mizuho Financial Group, Inc.
Mr. Masatsugu Asakawa, President, Asian Development Bank

Contact:
WALHI West Java
Address: Jl. Pecah Kopi No.14, Sukaluyu, Kec. Cibeunying Kaler, Kota Bandung, Jawa Barat40123, Indonesia
TEL: +62 22 20458503
Email: walhijabar@gmail.com

Footnotes:[1] https://www.jbic.go.jp/en/information/press/press-2017/1114-58532.html[2]

https://one.oecd.org/document/TAD/ECG(2019)2/En/pdf

TheOECD

Bribery

Recommendation

recommends as “Post-final commitment” that "Take appropriate action, consistent with their national laws andwithout causing prejudice to the rights of any parties not responsible for bribery, such as enhanced due diligence,
denial of payment, indemnification, or refund of sums provided, if, in relation to the transaction, one of the parties
involved is convicted of violation of laws against bribery, subjected to equivalent measures, or found as part of apublicly-available arbitral award to have engaged in bribery.”[3]

https://www.detik.com/jabar/hukum-dan-kriminal/d-6811373/aliran-dana-pengamanan-demo-pltu-2-

cirebon-yang-dibongkar-sunjaya[4]

https://ieefa.org/wp-content/uploads/2022/03/Indonesia-Wants-to-Go-Greener-but-PLN-Is-Stuck-With-

Excess-Capacity_November-2021_JAPANESE_F.pdf[5]

https://www.adb.org/news/adb-indonesia-partners-sign-landmark-mou-early-retirement-plan-first-coal-

power-plant-etm

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