Auction of Indonesia’s Widi Reserve Delayed by Environmental Concerns

Indonesia's Widi Reserve
Widi Reserve (Sotheby's Concierge Auctions)

Published Dec 9, 2022 6:23 PM by The Maritime Executive

Indonesian authorities and senior fisheries officials are uniting to stop the efforts of a private developer to auction development rights to the Widi Archipelago. The auction, which was scheduled to start this week and run until December 14 run by Sotheby's Concierge Auctions, offers to sell shares of the Bali-based developer PT Leadership Islands Indonesia (PT LII). 

The auction, however, has drawn immense criticism from environmental campaigners and Indonesian fishing communities. The concern is that private developers will cut off local communities and threaten the archipelago’s fragile marine ecosystems. This week, several Indonesian authorities joined in the call to halt the auction. The Sotheby’s site now shows that the auction is scheduled to start on January 24, 2023.

At issue is the rights of the developer who currently says they hold licenses from the government for the Widi Archipelago, which consists of more than 100 tropical islands covering over 10,000 hectares with a coastline running a total of about 150 kilometers (93 miles). The site has been described as one of the most intact coral atoll ecosystems left on earth. 

The archipelago lies within a marine protected area in the Pacific Coral Triangle of eastern Indonesia. The marine reserve, which the islands are part of spans an area of 300,000 hectares, with 6,000 hectares of coral reef, 85 hectares of mangrove, and almost 3,000 hectares of seagrass beds.

Since 2015, PT LII has held the rights to develop tourism facilities and luxury residential properties in the Widi Islands. The development license is valid for 35 years with a possible extension of another 20 years.

Speaking to a local TV news channel, Indonesia’s deputy minister, Alue Dohong said that the government had annulled the auction of shares of PT LII. Victor Gustaaf Manoppo, director-general of Marine Spatial planning at the ministry of fisheries has also clarified that PT LII lacks the necessary approvals to develop the protected waters surrounding Widi islands.

“Based on our information, PT LII does not currently have a marine activities approval for the utilization of the Widi islands’ waters. According to our legal regulations, the Widi islands cannot be owned by foreigners and cannot be traded,” said Victor Manoppo.

Despite the backlash, Indonesia’s home affairs minister, Tito Karnavian, has defended PT LII saying the Widi islands auction is a move to attract foreign investors.

“The developer had seven years to start working on the construction, but an apparent lack of funds seems to have prompted it to hold the auction. So, foreign investment should be allowed as long as the developer is legally based in Indonesia,” said Karnavian.