Security for investors<\/p>\n
Minister of Defense Juwono Sudarsono's call to mining
\ncompanies to cooperate with the military and police to protect
\ntheir businesses from rioters and looters is so far the strongest
\nstance ever taken by the government to defend the business sector
\nfrom disorder and lawlessness. But Tuesday's move, which simply
\nreflects the government's desperation of its inability to
\nmaintain security and order in many parts of the country, could
\ndangerously be taken by businesspeople as a license to hire
\nsecurity forces for their own interests.<\/p>\n
Juwono acknowledged that the military and police are so
\noverstretched and inadequately funded that they simply cannot
\nmaintain security throughout the sprawling archipelago. Even
\nthough he referred only to mining companies as he was speaking at
\na mining and energy conference, security problems have been
\nadversely affecting most other resource-based enterprises,
\nincluding plantations, which are located in remote areas. In
\nfact, gun-wielding guards patrolling plantations and mining areas
\nhave been familiar scenes in Irian Jaya, Kalimantan, Sulawesi,
\nMaluku and Sumatra since mid-1998, soon after the fall of former
\npresident Soeharto.<\/p>\n
While Indonesia takes its first step toward devolving more
\npower to local administrations and most people are still mired in
\neconomic suffering caused by the financial crisis of 1997, mining
\nand plantation companies are among those which mostly bear the
\nbrunt of resentment from locals who despise big investment
\nventures in their areas as outside exploitation of their wealth.<\/p>\n
Many mining and plantation companies have been facing a rash
\nof arbitrary claims for special payments, additional land
\ncompensation, back taxes or more generous community development
\nfunds from locals and sometimes administrations. In part, these
\nclaims were prompted by the centralized business-licensing
\npolicies of the New Order authoritarian government which were
\nbased largely on greed, arrogance and cronyism and which
\ncompletely disregarded the interests of locals. But many claims
\nwere simply cooked up by those intending to benefit from the
\nseemingly slackening spirit of law enforcement and lack of firm
\naction on the part of the demoralized military and police.<\/p>\n
Recent harassments of Kaltim Prima Coal in East Kalimantan,
\nNewmont gold company in North Sulawesi, Caltex in Riau, Indo Muro
\nKencana gold mining company in Central Kalimantan and widespread
\nraiding of oil palm and rubber plantations in Sumatra are only a
\nfew examples of the virtual breakdown of law and order. Ethnic
\nand sectarian violence in several provinces also severely
\ndisrupts production operations.<\/p>\n
This chaotic condition should obviously be brought to order,
\notherwise not only will new potential investment, sorely needed
\nto fuel the economic recovery, continue to shun the country, but
\nthe billions of dollars of investment already sunk in local
\nresource development could be damaged and eventually abandoned to
\nwaste.<\/p>\n
But while firm military and police action or the deployment of
\nprivate security guards could be helpful to protect enterprises
\nfrom security disturbances, the \"license\" for private companies
\nto hire security forces is highly prone to abuse either by the
\nmilitary or police, which badly need an additional source of
\nincome, or by greedy businesspeople trying to quash legitimate
\nclaims from locals or trade unions. More clear-cut rules are
\ntherefore needed to safeguard what Juwono stated as cooperation
\nbetween businesses and the military or police. All taxpayers,
\nnot only corporations, should equally be entitled to protection
\nby the military and police.<\/p>\n
Businesses' calls for military or police measures to cope with
\nviolence should be considered mostly as a contingency action to
\nextinguish the fire. It is more important though for companies
\nand the government to do their part in a joint fire-prevention
\nprogram.<\/p>\n
This means that companies should always profess good corporate
\ngovernance to keep employees comfortable and to make local
\ncommunity and administration hospitable to their operations. It
\nis an approach to prosperity, not security, that is the most
\neffective protection for businesses in the long term. On the
\nother hand, the government should work harder to improve the
\ncredibility of its law enforcement system to encourage people,
\nincluding trade unions, to settle their claims or disputes
\nthrough the proper legal channels.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/security-for-investors-1447893297",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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