The development of Bali LNG terminal development: who is it for?

Bali, March 2023—CELIOS was one of the speakers at a discussion organized by Wahana Lingkungan Hidup Indonesia (WALHI) Bali titled “The LNG Terminal Debate: Understanding Shareholders’ Rights and Authority in Business. What Can 20% Empty Shares and Minority Shareholders Do?” at Kubu Kopi, Jl. Hayam Wuruk, Denpasar.

In addition to CELIOS, WALHI invited representatives from the Bali Environmental Advocacy Working Committee (KEKAL). Speakers included CELIOS Director Bhima Yudhistira, CELIOS Researcher Wishnu Utomo, and I Wayan Adi Sumiarta, S.H., M.Kn., Chairman of KEKAL Bali.

Bhima Yudhistira said the planned LNG Terminal project on the Sanur coast is problematic. First, Perusda’s shareholding is only 20% and consists of a loan, meaning Perusda has no authority to make strategic decisions or determine dividend distributions. “It is clear that Bali cannot secure guaranteed benefits, and Perusda cannot ensure profits because its shares are a minority stake that gives it no power to determine policy,” he explained.

The public is also confused about whether the LNG terminal project is a private or government project, which has implications for transparency, even though Perusda is involved and provided initial capital from the regional budget. Wishnu Utomo added that describing the LNG Terminal as a clean-energy project is inaccurate, because LNG is a fossil fuel and its production involves processes that pose environmental risks. “LNG is dirty energy, sourced from fossil fuels, and its operations involve methane, which is more dangerous than carbon dioxide. LNG is a false solution to the energy transition,” he concluded.

I Wayan Adi Sumiarta explained that court proceedings show Perumda Bali owns only 20% of PT DEB, while PT Padma Energi Indonesia owns 80%. Perumda’s shares are a loan from PT Padma, which is why they are referred to as “empty shares.” If the business suffers losses, Perumda’s shares risk being diluted to zero, leaving the company entirely under private control. Adi Sumiarta suspects that the 20% empty shares were exchanged for facilitation by the Bali Provincial Government, including policies supporting the LNG Terminal’s construction and the provision of land. “There is strong reason to suspect that these empty shares were exchanged for various policies to get the project approved,” he stressed.

CELIOS participated as a speaker in a discussion organized by Wahana Lingkungan Hidup Indonesia (WALHI) Bali titled “The LNG Terminal Debate: Understanding Shareholders’ Rights and Authority in Business. What Can Minority Shareholders Do About the 20% Empty Shares?” at Kubu Kopi, Jl. Hayam Wuruk, Denpasar.

In addition to CELIOS, WALHI invited representatives from the Bali Environmental Advocacy Working Committee (KEKAL). Speakers included CELIOS Director Bhima Yudhistira, CELIOS Researcher Wishnu Utomo, and I Wayan Adi Sumiarta, S.H., M.Kn., Chairman of KEKAL Bali.

Bhima Yudhistira pointed out that the planned LNG Terminal project on the Sanur coast is problematic. First, Perusda holds only a 20% stake, which is a loan, giving it no authority to make strategic decisions or determine dividend distribution. “It is clear that Bali cannot secure guaranteed benefits, and Perusda cannot ensure profits because its shares are minority shares with no decision-making power,” he said.

Public confusion also surrounds whether the LNG terminal is a private or government project, affecting transparency despite Perusda’s involvement using regional funds. Wishnu Utomo added that the LNG terminal, claimed to be a clean energy project, is not truly clean, as LNG is a fossil fuel with environmentally risky processes. “LNG is dirty energy, sourced from fossil fuels, and its operations release methane, which is more harmful than carbon dioxide. LNG is a false solution in the energy transition,” he stated.

I Wayan Adi Sumiarta explained that court records show Perumda Bali only owns 20% of PT DEB, the project developer, while 80% is held by PT Padma Energi Indonesia. Perumda’s shares are a loan from PT Padma, making them “empty shares.” If the business suffers losses, Perumda’s shares risk being diluted to zero, fully controlled by private investors. Adi Sumiarta further suspected that the 20% empty shares were bartered for government facilitation, such as policy approvals and land allocation for the LNG terminal. “There is strong suspicion that these empty shares were exchanged through various policies to approve the project,” he emphasized.