Civil Society Organizations' Comments/Reactions to the Vale’s “Our Strategyand Commitments - Statement on PT Vale Indonesia Tbk” dated August 29,20231
Prepared by WALHI South Sulawesi, WALHI, Friends of the Earth Japan,and Pacific Asia resource Center(September 8, 2023)

First, before commenting on each of the points raised in Vale's Statement in the tablebelow, we would like to express our disappointment that, with respect to the local farmers'
and women’s desperate hope "To exclude farmland, where local communities depend onfor their livelihoods, and adequate buffer zones from the area to be mined (including theTanamalia block currently under exploration)," which is mentioned in our letter toVale/PTVI shareholders dated August 18, 2023 ("the Letter")2, we note that Vale has madeno specific comment on the issue in its statement. We believe that Vale's failure to provide
any answer or response to one of the most fundamental and critical issues for thecommunities indicates how void Vale's words about "We emphasize open dialogue withlocal communities and authorities to resolve conflicts" are. Vale/PTVI must respect suchaspirations and concerns of the communities and women.

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Vale’s Statement

CSOs’ Comments/Reactions

Para 3:Any activities related to relocation andcompensation
adheretotheInternational Finance Corporation'sPerformanceStandards
onEnvironmental and Social Sustainability
and other internationally recognized
best practice frameworks. Farmers, forinstance, who have been subject toinvoluntary displacement have been
duly compensated.

IFC's Performance Standards 5 "LandAcquisition and Involuntary Resettlement,"states as one of the objectives, "To improve,or restore, the livelihoods and standards ofliving of displaced persons" in Para. 3. In
addition, Para. 9 etc. requires thatcompensation and assistance "at full
replacement cost" is offered and that"Compensation standards will be transparent
and applied consistently to all communities
and persons affected by the displacement."
Para. 29 also states that "Transitional supportshould be provided as necessary to all
economically displaced persons, based on areasonable estimate of the time required torestore their income-earning capacity,
production levels, and standards of living."

https://vale.com/en/web/esg/last-updates?updtTitle=Statement%20on%20PT%20Vale%20Indonesia%20Tbk
https://foejapan.org/en/issue/20230818/13949/

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There are reported cases where theinvoluntary displacement measures taken by
PTVI do not comply with the stipulations of
the IFC's Performance Standards as
described above. For example, in Asuli
village, when farmers lost access to theirfarmland starting in 2017, some farmers werepaid compensation at the time and others
were not. It was also reported that in some of
the latter cases, compensation was finallypaid in 2023, but the standard ofcompensation differed from that of theformer.
In our Letter dated August 18, we have also
pointed out the following situation.
 Even when compensation was paid,
some farmers reported that it wasnever enough considering the labor,
fertilizers, and other necessary
expenses they had invested incultivating their farmland.
 In
the first place, monetarycompensation is not a sustainablemeasure, since it ends when it is usedup.
 There are also reports of cases where
the level and conditions ofcompensation are not consistent,
including cases where there is nocompensation at all, leading to thedivision of communities.
Para 4:
In compliance with Indonesian laws andregulations, PTVI reports acts of violenceand disruption of mining activities
through non-peaceful demonstrations,such as a recent occurrence near theAsuli and Lembo South area in 2023.

As far as we verified the community's report,
the community protests around Asuli in
February 2023 were peaceful, and weunderstand that there was no "acts ofviolence and disruption of mining activities
through non-peaceful demonstrations" asclaimed by PTVI. Based on the community's
report that we have verified, the community
did not destroy any property, and merely
gathered on the street to request PTVI to pay
attention to the problems, so that their water2

sources and environment could not be
polluted by PTVI’s mining activities.
The protests around Asuli occurred because
PTVI had failed to respond to thecommunity’s aspiration or demand. The
affectedcommunityhasrightsacknowledged both by domestic laws andinternational norms to conduct peacefulprotests while on the otherhand, PTVI fails toact responsibly to the problems faced by thecommunity.
Para 5:
Prior to commencing mining activities,
PTVI conducted a comprehensivehydrological analysis to minimize
potential impacts on existing water
sources and storage ponds. This analysis
revealed that the pre-existing water
storage ponds already suffered fromissues of being brown and muddy withlimited water volume, confirming thatthe poor quality of the spring water
existed prior to PTVI initiating mining
operations in the area. Additionally, theLembo
Southblockfeatured
unauthorized pepper plantations withina protected forestry area established by
local communities alongside miningactivities. Based on PTVI's hydrologicalanalysis, there is no evidence of adverse
effects on water storage ponds resulting
from mining activities.

This statement shows how PTVI has
neglected the opinions and testimonies ofresidents and how it has failed to engage indialogue with the affected residents withsympathy. Their testimony that a water
source turned brown and muddy when it
rains since PTVI's mining activities should not
be dismissed based solely on the results ofhydrological analysis, but rather thetestimonies of these residents should betaken seriously in assessing risks and impacts.

Para 5:
Despite the limited extent of our mining
operations in the Lembo South Blockand the absence of any negative impact
on the local communities' water storage
ponds, PTVI has taken proactive steps inconstructing multiple water tankfacilities to cater to the needs ofneighboring communities, especially theAsuli village.

It is difficult to say that “PTVI is also
dedicated to enhancing the well-being of thecommunities where it operates" as measures
have not been completed after 6 months
from the residents' complaints regarding theimpact on the water sources used daily by thecommunities, including women and children.

In addition, according to the community,
their complaint related to the water source
started only after the PTVI's mining activities.
Thus, the community doesn't think that thepepper farming caused such problems about
the water source.

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Para 6:PTVI is dedicated to addressing concerns
related to hexavalent chromium (Cr6+)
within our operations. The 2022 PTVI
Sustainability Report highlights our
meticulous monitoring and sampling
efforts, consistently demonstrating that
Cr6+ levels in effluents remain well
below permissible limits.

The possible water contamination byhexavalent chromium we pointed out in ourLetter dated August 18 differs from the water
quality monitoring locations presented in the2022 PTVI Sustainability Report.

Para 7:
Notably, since July 2023, the community
has taken charge of a self-managed
water system initiated and furnished byPTVI. Through active participation, thecommunity maintains operation andupkeep of this system, ensuring thesustained availability of clean water.

While there may be some communities thathave been highlighted about "the sustained
availability of clean water" in Vale’sstatement, it should be recalled that there
are communities in PTVI mining-affectedareas who are not in such situations and still
have problems with access to clean water.

Para 8:PTVI refrains from making comments on
the discretionary actions of the Police
and regulatory bodies……

In Principle 2 of the UN Global Compact, towhich Vale is committed ("Businesses shouldmake sure that they are not complicit inhuman rights abuse."), the followings arelisted as possible Complicity to Human Rights
Abuses.
 Beneficial complicity — when acompany benefits from human rights
abuses even if it did not positivelyassist or cause them
 Silent complicity — when thecompany is silent or inactive in theface of systematic or continuous
human rights abuse.

In addition, such reports and results on water
quality and environment surrounding themining and smelter’s operation must be
made public in an accessible andunderstandable way to the affected
communities.

In this case, PTVI's refraining fromcommenting, or omission (failure to act) tocomment on the human rights abuses
committed by the military and heavily armed
police officers could be a possible complicity
in the human rights abuses. As indicated in
the UN Global Compact, Vale/PTVI should"privately and publicly condemn systematicand continuous human rights abuses" by4military and police officers occurring in thefield.
It should be noted that the presence ofseveral armed police officers and theinvolvement of the military in PTVI’s
exploration activity (ex. farmers directly
witnessed the military coming out of PTVI'scontractor's company car) have caused very
deep fear to the community, especially towomen and children. According to womenaround the Tanamalia block, the involvementof the military and armed police officers is
indirect intimidation to them.
Para 8:
Our approach to conflict resolution
prioritizes open dialogue involving thecommunity, village, sub-district, district
governments, and other stakeholders.

Pepper farmers, who are demanding thesuspension of exploration in the Tanamalia
block, have been calling on PTVI to solve theproblem directly through protest actions 3
and have called for discussions directly withPTVI through local press conferences. 4
However, PTVI was not willing to engage indialogue with farmers soon. Rather thanengage in dialogue with farmers, PTVI
continued to enable the military and heavily
armed police officers to respond to thecommunity in an oppressive manner. 5
PTVI asked the Towuti sub-district head toconduct a socialization (not a consultation) at
the Towuti sub-district head's office on
September 7, 2023. Unfortunately, based on
views from the community around theTanamalia block, the way how to hold thesocialization is not appropriate and notmeaningful as below;
1. Only invited some selected persons,such as 5 villages’ heads, but not all3

https://walhisulsel.or.id/4026-pernyataan-sikap-mayarakat-petani-dan-perempuan-loeha-raya-menolak-aktivitaseksplorasi-dan-perluasan-tambang-pt-vale-indonesia-di-blok-tanamalia-kecamatan-towuti-kabupaten-luwu-timur/
4 https://www.journaltelegraf.com/2023/07/menjaga-akar-warisan-dan-identitas.html
5https://www.journaltelegraf.com/2023/06/tuntutan-petani-dan-perempuan-merica.html ;https://www.indeksmedia.id/2023/07/26/petani-dan-perempuan-ketakutan-walhi-sulsel-desak-pt-vale-indonesiahentikan-militerisasi-di-blok-tanamalia-luwu-timur/ ; https://www.youtube.com/watch?v=sD9R7poZO50

5the community members to attend
the socialization meeting;
2. Invited muspika (the police and themilitary) to the socialization meeting;
3. Invited farmers and workers to attend
the socialization meeting at the sametime and place (According to pepper
farmers, this is very risky in creating
conflicts between contract workersand farmers);
4. Did not invite women, while thenegative impacts of exploration andmining activities in the future has
been/will be experienced by womenas well.
Thus, the farmers and women around theTanamalia block refused to attend thesocialization on September 7, and asked PTVI
to hold another meeting separately for them.
Para 9:During a protest in 2023, PTVI found thatthe protest escalated into vandalism. To
avoid potential further escalations or ahostile situation developing, PTVI
reported the situation to the authorities,
deferring the enforcement to them, asper applicable law. While PTVI cannot
comment on police discretion, PTVI'scommitment to dialogue is unwaveringwhilst upholding our obligation to reportincidents and prioritize peacefulresolution, fostering a safe and inclusiveenvironment.

As far as we know, the community protests
around Asuli in February 2023 and around
Tanamalia block since July 2023 werepeaceful, and we understand that there wasno "protest escalated into vandalism" asclaimed by PTVI. The community did not
destroy any others’ or public property, too.
The community protests occurred around
Tanamalia block because PTVI didn’t respondto the community's demand to stop its
exploration, to hold meaningful public
consultations, to ensure Free, Prior, andInformed Consent (FPIC), and to respect thecommunity's attitude.
Whenfarmers
andwomen
weredemonstrating around Tanamalia block, they
were confronted by heavily armed police
officers (Brimob). We would like to ask
whether this kind of act satisfies Vale's
human rights standard for handling protests
from affected communities.

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PTVI must make sure not only “deferring theenforcement to the authorities, as perapplicable law”, but also as per international
human rights standards.
In addition, as described in the above,
Vale/PTVI should "privately and publicly
condemn systematic and continuous humanrights abuses" by military and police officers
occurring in the field, in accordance with theUN Global Compact.
Further, if PTVI's commitment to dialogue isunwavering, PTVI should have engaged in an
earlier and more appropriate form ofdialogue with the farmers who aredemanding to exclude their farmland fromthe area to be mined in Tanamalia block.
Para 10:Engagement through open dialogue is acornerstone of PTVI's approach, and we
actively prioritize interactions with thelocal community, village leadership, subdistrict and district governments, as wellas other relevant stakeholders. It is
crucial to note that PTVI's influence does
not extend to military actions. We
respect military jurisdiction and arecommitted to safeguarding andupholding human rights within ouroperations. Inquiries or concerns
pertaining to military conduct should bedirected to the appropriate governing
bodies in Indonesia.

PTVI should have had an earlier and more
appropriate form of open dialogue with thefarmers and women, who are demanding toexclude their farmland from the area to bemined in the Tanamalia block, without theinvolvement of military and police.
In addition, as described in the above,
Vale/PTVI should "privately and publiclycondemn systematic and continuous humanrights abuses" by military and police officers
occurring in the field, in accordance with theUN Global Compact.

Contact for further inquiries on this paper:
WALHI South Sulawesi (Muhammad Al Amin, Executive Director)
Add: JL. Aroepala, Kompleks Permata Hijau Lestari Blok Q1, No.8, Rappocini, Kota Makassar,
Sulawesi Selatan 90221
Email: muhammad.al.amien@gmail.com / walhisulsel@gmail.com
Tel: +62-8229-3939-591
Friends of the Earth Japan (Hozue Hatae, Development Finance and Environment Team)7

Add: 1-21-9 Komone, Itabashi-ku, Tokyo, Japan 173-0037
Email: hatae@foejapan.org
Tel: +81 3 6909 5983

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