Papua's autonomy test: The Tangguh LNG project<\/p>\n
Ignas Kleden, Sociologist, The Center for East Indonesian Affairs,
\nJakarta<\/p>\n
Part 1 of 2<\/p>\n
The messages of Law no. 22\/1999 and Law no. 25\/1999 regarding
\npolitical decentralization (regional autonomy) and economic
\ndeconcentration (fiscal balance) has been, over the past year,
\nhanging in the air. There has been considerable criticisms of the
\ntwo laws, both in regard to their logical consistency as well as
\nto their related legal products needed to guide their
\nimplementation.<\/p>\n
There are also still many other problems, including
\nconflicting perceptions concerning what regional autonomy is
\nactually all about. What is still obviously lacking, however, are
\npolitical and economic initiatives at the national and regional
\nlevels which aim to translate the spirit of decentralization and
\ndeconcentration into political decisions and economic policy.<\/p>\n
Needless to say, the two laws have acquired more serious
\nattention from foreign foundations and foreign companies
\noperating in Indonesia. Concerns about the attitude of regional
\ngovernment towards business contracts or economic cooperation
\nwhich have been made between the central government and foreign
\ncompanies operating in the regions, cannot be overestimated.<\/p>\n
In that connection any attempt by big companies -- national or
\nmultinational -- which aims to put economic deconcentration and
\npolitical decentralization into reality should be attended to,
\nappreciated and supported. A good case in point is the
\nconstruction of LNG Tangguh Project in Berau Bay, in the Bird's
\nHead region of Papua.<\/p>\n
Processing facilities will be built on the southern shoreline,
\nbetween the two rivers, Saengga and Manggosa. The site for
\nprocessing facilities covers no less than 3,266 hectares with
\nconstruction planned to begin late next year. Construction
\npreparations have already started with LNG production expected to
\nstart in late 2005.<\/p>\n
Some 5,000 mainly local workers, will be employed in its
\nconstruction. To that extent the question of employment for the
\npeople from local communities is partly resolved.<\/p>\n
The real problem, however, will arise during the operational
\nstage (2005 - 2025), in which the whole production and
\nmaintenance staff will comprise just 500 skilled people. This is
\nthe case because the project will be a world class plant equipped
\nwith highly automated facilities. The question is: What to do
\nwith the local people especially those living in Bintuni and
\nBerau Bays which will be directly affected by the industrial
\nplant?<\/p>\n
This question seems to concern those who are responsible for
\nthe project because of some related reasons. First, we cannot
\nforget the case of mining company PT Freeport Indonesia which is
\nfaced with a number of serious social problems. The people of
\nPapua do not want to have the same problems with any other big
\ncompanies which want to operate in the province.<\/p>\n
Some intellectuals from the University of Cendrawasih,
\nJayapura, and the University of Papua, Manokwari, say that if
\nFreeport is a phenomenon of economic concentration and political
\ncentralism, LNG Tangguh Project should become a benchmark of
\neconomic deconcentration and political decentralization. This
\nopinion was made explicitly clear during a two-day workshop in
\nSentani, on Nov. 27-28.<\/p>\n
Second, the project resulted from a collaboration of nine
\npartners, comprising Pertamina, British Petroleum (Indonesia) or
\nBP (Indonesia), British Gas Plc (BG), Mitsubishi Corporation,
\nKanematsu Corporation (KG), Nippon Mitsubishi Oil (Nisseki
\nMitsubishi), Nissho Iwai, Genting Berhad Cairns Ltd, and the
\nProvincial Government of Papua. Among them Pertamina and BP
\n(Indonesia) become the Tangguh Project operators.<\/p>\n
The operators seem fairly aware of the social changes which
\nwill be driven by the project and the social costs which they
\nwill likely have to pay if locals are not integrated in the
\nresults of the project, if not in the workings of the project.<\/p>\n
This becomes all the more urgent for the people of Papua who
\nhave abundant natural resources and yet still live in relatively
\npoor conditions. Papua is one of the four provinces in Indonesia
\nwhich are ready for regional autonomy as far as natural resources
\nare concerned. The other three are Aceh, Riau, and East
\nKalimantan. However, the per capita gross regional domestic
\nproduct of Papua in 1997, for example, was no more than Rp 4.3
\nmillion.<\/p>\n
Third, the operators of LNG Tangguh want to see how political
\ndecisions on political decentralization and economic
\ndeconcentration can be translated into corporate governance. In
\nthat connection, Pertamina and BP (Indonesia) have worked out a
\ndevelopment strategy which is expected to better fit local needs.<\/p>\n
It is called the diversified growth strategy, or sometimes the
\ndistributed growth strategy. The first term refers to the
\nexpected effects in terms of sectors, whereas the latter refers
\nto the regions.<\/p>\n
Some related aims of the strategy as propounded in its
\nconception are as follows.<\/p>\n
First, it aims to prevent economic concentration, this being
\ndone by means of multiplying growth centers in terms of both
\nterritory as well as sectors. In order to reach this aim, policy
\nwill be made whereby job seekers are only allowed to apply for
\nwork at the project if they live in the same area they are
\napplying to work.<\/p>\n
People from, say Tanimbar or Ternate island, who want to look
\nfor a job are only allowed to apply in Sorong, Manokwari or Fak
\nFak, and if they succeed they will be employed in one of these
\ntowns. In the same way other dependent employment and economic
\nactivities will be carried out by people from local communities.
\nCultivation of vegetables, food stalls, small shops and the like
\nare expected to be run by locals.<\/p>\n
Needless to say, this idea can be realized if two
\nprerequisites are met. On the one hand local human resources
\nshould have sufficient technical and managerial know-how. On the
\nother, local officials should stick to this policy. In other
\nwords, the plan and policy will not work if the old practices of
\ncorruption, collusion and nepotism are able to distort all the
\nprocedures so much so that the local government officials allow
\noutsiders to work on the project in exchange for bribes.<\/p>\n
The writer attended the above mentioned workshop in Hotel
\nSentani, Jayapura, held by BP Indonesia and Pertamina in
\ncooperation with locals on Nov. 27-28.<\/p>",
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