Demands of local people unavoidable, says mining body

JAKARTA (JP): The increasing number of provinces making demands on mining companies is unavoidable and is a consequence of the transition into democracy, the Indonesian Mining Association (IMA) said on Thursday.

IMA executive director Paul Coutrier said mining companies should therefore act wisely in facing the demands of the local people.

"We have to accept the fact that people now have the courage to protest," Paul said in a news briefing.

He said these demands were suppressed for 30 years under the authoritarian rule of former president Soeharto.

"That the once so friendly neighbor starts to complain about the waste we produce is normal," Paul added.

Since the downfall of Soeharto in 1998, many mining companies have been wrestling with demands made by regions concerning taxes, environmental issues and land concessions.

Local discontent, however, stems mostly from social economic problems rather than environmental, he added.

He said people felt they had benefited little from the economic activities of large companies operating in their area.

He said mining companies paid all the royalties and taxes to the central government without knowing what the money would be used for.

"There was no control," he said, adding that control called for good governance which was lacking under Soeharto's rule.

But with autonomy to be implemented next year, provinces down to regencies and districts will gain a greater share from the revenue in royalties paid to the government.

Law No 25/1999 on intergovernmental fiscal balance stipulates that provinces get 80 percent of the government's revenue from mining royalties.

He urged mining companies to listen to locals' demands and avoid suppressing people's voices.

"Otherwise, how are we ever to find out what to improve?" he asked.

He said that because of the demands, mining companies had become better aware of the needs of their surrounding communities. Nevertheless, Paul warned that the transition into democracy could also be violent.

He said the government should act firmly on people who use force to press companies into succumbing to their demands.

"Democracy has rules," he said.

He cited that locals had gone too far in the case of gold mining company PT Kelian Equatorial Mining (KEM).

KEM had to suspend operations after locals blockaded the only supply road leading to its gold mine in East Kalimantan, demanding the company pay them compensation for their land.

According to Paul, since KEM had paid land compensation in 1990 and 1994, he feared the locals would continue making the same demands.

"When will this stop?" he asked.

Last week the Ministry of Mines and Energy's Director General of Mining Surna Tjahja Djajadiningrat told mining companies to be more flexible in facing vocal provincial administrations.

He said mining companies should be able to make compromises in seeking a win-win solution when faced with such local authorities. (bkm)