TuK INDONESIA vs. Bank Mandiri Lawsuit Hearing: Holes in Legal Standing Draw Scrutiny

Press Release

Jakarta, December 3, 2024 — The follow-up hearing on TuK INDONESIA’s lawsuit against Bank Mandiri took place on December 2, 2024, at the South Jakarta District Court, with the agenda of summoning the involved parties. All parties were present in this session, including TuK INDONESIA as the plaintiff, Bank Mandiri as the defendant, and PT Agro Nusa Abadi (ANA) and Astra Agro Lestari (AAL) as co-defendants. The defendant and co-defendants were represented by their respective legal teams.

This hearing attracted public attention due to allegations of severe violations related to financing agribusiness projects accused of causing environmental damage, human rights violations, and social conflicts in ANA and AAL’s operational areas. However, efforts to seek justice were again delayed due to Bank Mandiri’s unpreparedness in providing the required legal standing documents.

In a statement following the hearing, TuK INDONESIA expressed disappointment at the delay. “Repeated delays highlight the defendant’s weak commitment to addressing the substance of the lawsuit. As Indonesia’s largest financial institution, Bank Mandiri should demonstrate a more responsible stance,” said Linda Rosalina, Executive Director of TuK INDONESIA.

The lawsuit alleges that Bank Mandiri provided financing to PT ANA, a subsidiary of AAL, which is accused of land-grabbing indigenous communities, environmental degradation, and human rights violations in its operational areas. As regulated under Law No. 10 of 1998, which amended Law No. 7 of 1992 on Banking, Bank Mandiri is obligated to implement the principle of prudence. Article 29 of this law explicitly states that banks must adhere to prudential principles in conducting their business activities and must maintain a balance between the interests of customers, society, and the sustainability of the bank’s operations. This principle includes a thorough risk assessment of the environmental, social, and corporate governance impacts of financed projects.

Under the Banking Law and Bank Indonesia Regulation (PBI) No. 13/1/PBI/2011 concerning the Assessment of Bank Asset Quality, banks are responsible for ensuring that every financing decision does not jeopardize business sustainability, the environment, or affected communities.

“Bank Mandiri should have conducted adequate due diligence to identify social and environmental risks before granting financing. Their lack of preparation in the trial demonstrates serious negligence of this obligation,” Linda asserted.

This delay not only hampers the legal process but also impacts communities directly affected by ANA and AAL’s agribusiness activities. To date, local communities suffering from land-grabbing have not received justice, while ecosystems in these areas remain at risk from unchecked expansion.

TuK INDONESIA calls for a transparent and accountable legal process and urges Bank Mandiri to demonstrate goodwill in resolving this case. The next hearing is scheduled for December 9, 2024, with the hope that all parties will be well-prepared to advance the resolution of this case. TuK INDONESIA also encourages the public to continue monitoring the legal proceedings, given the significance of this case in upholding social and environmental justice.

Documentation Link:
Access here

Contact Information:
Annisa
Email: [email protected]
Phone: +62 878 8444 6640

This post is also available in: Indonesian