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People and natural wealth
Monday, 02 January 2012 00:00
People and natural wealth
The Jakarta Post | Mon, 01/02/2012 8:52 PM
We deplore the police’s mishandling of the anti-mining protests at the Sape port in Bima, West Nusa Tenggara, last week that caused the deaths of two demonstrators and injured more than two dozen.
But revoking the mining license of the Indonesia-Australia joint venture at the heart of the protest simply because of the incident would mean that government would succumb to a mob rule — a timid act that could leave most major mining concessions in a legal blackhole.
Even though investigations are still underway into the underlying factors behind protests and the causes of the violence, we don’t believe the Sumber Mineral Nusantara-Arc Exploration joint venture was directly or indirectly involved in that incident.
It is never popular to stand up in defense of big business, let alone for a foreign company.
But we don’t think that Arc Exploration, an Australian gold company that is publicly listed in Sydney, would risk damaging its reputation by violating the law to protect a 25,000-hectare mining concession that it acquired at substantial cost.
Moreover, we reckon the joint venture had gone through more than one year of bureaucratic and legal processes dealing with various ministries overseeing mining, forestry and the environment and other local agencies to obtain its license.
If residents were so fearful of the environmental impact of the mining operations that they staged massive protests, why then did the Bima administration award the mining license in the first place?
The mining company halted its explorations immediately after the incident - a wise corporate action to allow for a cooling-down period.
But Bima Regent Ferry Zulkarnaen cannot immediately revoke the mining license without due process to ascertain the faults, if any, of the mining contractor and any malfeasance committed during the licensing process.
It has been a common phenomenon since the ushering in of our democratic era in 1998, for the people, who for more than 32 years were completely excluded from the decision-making process regarding the exploitation of natural wealth, to become overzealous in asserting their rights.
They sometime release their vent-up frustrations in street protests, irrationally demanding that the mining contracts in their areas simply be annulled, claiming that the mines had not benefited the local community and had instead damaged the environments.
The issue, though, is that the mass protests such as those at the Sape port last week often attract a wide mixture of pressure groups, informal leaders and human rights and environment activists. Some represent genuine causes and legitimate grievances. Other, however, advance self-serving agendas and stand ready to exploit any situation.
Certainly, businesses are not always right and those that are found guilty of violating the laws should be brought to justice.
The government should be extra careful in analyzing the main reasons behind the protests. If such demonstrations are not handled properly, mobs will have a field day and businesses will be at the mercy of the law of the jungle.
Mining, together with plantations and fisheries, are the most promising resource-based ventures in the country and account for nearly 40 percent of our total exports.
However, legal and regulatory certainty is vitally important for mining investment because the industry is capital and technology intensive, highly risky, has a long payback period and operates mostly in remote areas where basic infrastructure is inadequate.
When a big mining company enters a remote area, its operations generate a sharp rise in local people’s expectations through the impact of its community-development programs. Many players, individuals or NGOs — often from outside the mining area — often jump in, trying to use mining companies as a tool for advancing personal or public interests, offering advocacy services either to secure fees or to seek popularity and political prestige.
All these aspects of development should be investigated thoroughly in analyzing the people’s concerns about the mining concession.
http://www.thejakartapost.com/news/2012/01/02/people-and-natural-wealth.html
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