Indonesia: Law enforcement is vital for 'just' mining

Law enforcement is vital for 'just' mining

The Jakarta Post

7 January 2012

Jakarta - The Mining Advocacy Network (Jatam) warned on Friday that the development of the mining industry and other extractive business, might remain uncertain if the government failed to strictly enforce legal regulations and take environmental concerns into consideration.

"Mining will always damage the environment. However, we can reduce its impact with strict monitoring on how companies run their operations and interact with people around their mining operation. And we can only achieve this if the government is honest, transparent and just," Jatam coordinator Andrie S. Wijaya, said.

He said that giving licenses for mining companies to operate without thorough audits will only create additional conflict in the future.

"To simply open new site for mining exploration will not boost production or investment in the industry," Andrie told The Jakarta Post.

Earlier this week, the Indonesian Geologists Association (IAGI) said that government should encourage companies to open new areas for oil exploration, especially in the eastern part of the country, due to the significant drop in oil production last year.

"Indonesia will not be able to boost its oil production this year because companies have only been exploring oil from existing sources. We have found very few new sources for oil exploration since the year 2000. Therefore, opening new sources for exploration is a must," chairman of IAGI Rovicky Dwi Putohari said.

IAGI noted that Indonesia's oil production was down to 903,441 barrels per day in 2011 from 944,898 barrels per day in 2010.

IAGI said that the government should encourage exploration in the eastern parts of the country because most of the region's rich oil resources, as well as other mining resources, were yet to be explored.

"The government must promote eastern parts of Indonesia for mining investment. However, the government must also support investors by developing the infrastructure to attract investors to come. The topography of eastern parts of the country is challenging but that won't be a problem as long as decent infrastructure is available," Rovicky said.

IAGI suggested, however, that the government should only allow companies with good mining practices to explore the new frontier.

"Only big companies can live up to standards of good mining practice. They also empower local residents, for example by hiring them, as well as by generating community empowerment programs through corporate social responsibility (CSR) programs," Rovicky said.

Singgih Widagdo, IAGI's chief of natural resources division, said that many small mining operators had yet to conduct good mining practices.

He attributed the riot in Bima, West Nusa Tenggara to mining company PT Sumber Mineral Nusantara's failure to follow good mining practices.

"The central government should take responsibility, although the mining permit was issued by the local administration. Article 217 of Law No. 32 on Regional Government obliges the central government to educate and supervise regional governments in performing their function," he said.

Andrie, however, disagreed with IAGI's suggestion to encourage big mining companies to open more operations.

He said mining giants like PT Freeport Indonesia and PT Newmont Nusa Tenggara were as problematic as small mining companies.

"The government must first audit all operational permits of existing mining companies. We learned that there are currently 9,662 permits issued, of which only 3,778 are categorized as clean and clear. This means that local governments have issued another 5,884 licences through dubious processes," he said.