Exploitation of natural resources out of control

Exploitation of natural resources out of control

The Jakarta Post, Jakarta

The International Crisis Group (ICG) reported on Friday that
the exploitation of Indonesia's natural resources was out of
control, damaging the environment and societies in ways that
increased the risk of conflict.

ICG said the country suffered damage from illegal operators,
corruption and greed in the mining, logging and fisheries
industries, although the industries had also brought economic
benefits to the country.

"ICG urges Indonesia and the international community to take
much tougher action against unsustainable and illegal practices
to secure viability of its industries in the future, and also to
reduce the risk of violence," the group said in its new report.

ICG said the timber trade in Kalimantan and the massive
illegal cros-border traffic to Malaysia was an important example
of illegal and unsustainable resource exploitation.

Those practices were also an important contributing factor in
the fighting between indigenous Dayaks and Madurese immigrants in
Kalimantan early this year, in which 500 Madurese were massacred
and thousands more were forced to flee, ICG added.

According to ICG, the illegal resource industry was protected
and sometimes even organized by corrupt elements in the civil
service, security forces and legislature.

"This is not just a question of protecting the environment,
it's also a problem of governance and crime. Foreign donors and
lenders have put heavy pressure on Indonesia to deal with illegal
logging, but the government is still a along way from turning the
tide," ICG senior analyst Diarmid O' Sullivan said.

ICG said it had put forward a series of recommendations to the
government, army, police, trading partners and financial backers
to end illegal resource exploitation and reach more sustainable
levels.

A resource strategy should start with improved law enforcement
against the key organizers of illegal extraction and the corrupt
officials who assist them, a reduction of the capacity of wood-
processing companies and a review of debt structures to ensure
they do not encourage the use of illegal timber, ICG said.

"A crackdown on illegal cross-border trade in timber is
essential if Indonesia is to sustain its forestry industry," ICG
said.

According to ICG, donors and lenders to the country should
provide technical assistance and consider offering debt write-
offs in return for tangible outcomes.

But if vested interests continued to block reform, lenders
should consider linking future loans to curbing illegal
extraction and refuse to provide capital to companies that did
not use legal and sustainable raw materials, ICG added.