Good news from Bengkulu

Good news from Bengkulu

Amid the imbroglio of protest rallies and claims, legitimate
or otherwise, encountered of late by many plantation and mining
companies in various provinces, a district court in Bengkulu has
set a shining example of how things should not, after all, be as
murky as many fear despite the turbulent transition to the
devolving of stronger autonomy to regional administrations.

The district court in North Bengkulu regency on Aug. 19
sentenced a local political leader and a legal consultant to
seven years in jail for inciting local people to destroy and burn
property owned by PT Agro Muko in an effort to force their demand
for a bigger land compensation payout.

It is indeed quite a comfort to note, in view of the widely
felt pessimism about law enforcement in the country now, that
court judges in Bengkulu, Indonesia's youngest province located
on the southwestern coast of Sumatra, showed the courage and
professed a high sense of conscience in establishing justice in
favor of a foreign plantation company against a member of the
local legislature.

That is quite an achievement for the police and prosecutors in
a district so far from Jakarta. It was obviously a tough job for
them to collect all the evidence in order to build a solid case
to prove that local councillor Mahidin Atu and his lawyer friend
Zulkifli Ismail were indeed responsible for inciting the
estimated 500 villagers in mid-January to destroy and burn PT
Agro Muko's property, worth about Rp 900 million (US$109,000), in
its home base in North Bengkulu. But a solid case would have been
meaningless without the competent and courageous panel of judges
who risked public condemnation by judging in favor of a British,
German and Belgian joint venture against a political leader who
claimed to strive for the local farmers' interests.

The success should shame political leaders -- including
President Abdurrahman Wahid himself -- the police and military in
Jakarta who have often blamed riots, mob atrocities and various
other forms of violence in many areas on what they call
provocateurs, but who never succeed to bring any of them to
court.

Presiding judge Solahuddin stated in his considerations for
the verdict that the actions of both defendants in using violence
and blackmail for championing public interests were criminal
acts. The judge further demonstrated his deep insight of the role
of law certainty for investment and the impact of investment on
the economy when he pointed out that such actions scared away
investors who, he said, were needed to develop the local economy.
He rightly stated that PT Agro Muko, which has developed 22,000
hectares of oil palm plantations in North Bengkulu since 1987,
greatly benefited the local economy.

It is, we think, the death of such awareness and knowledge
that has often prompted local administrations to simply sit back
and condone or even support protest rallies by locals against
companies, however arbitrary and illegitimate their claims. Many
plantation companies in Sumatra have also complained about how
some local councillors or politicians often use public grievances
regarding land acquisition concluded many years ago to pressure
or even blackmail businesspeople for money.

Even though the bulk of income and value-added tax receipts
will continue to go directly to the central government's coffers
in Jakarta even after the enforcement of the laws on political
and fiscal autonomy in January, local administrations should
realize the crucial importance of maintaining a conducive
business climate. And law certainty is a vital element of a
business-friendly atmosphere.

Business enterprises generate jobs which in turn create
purchasing power for locals to buy goods and services from which
local administrations also collect various local taxes and
levies. Further down the line, rapid business development spurs
on the property market, thereby generating bigger revenue from
property tax, which, according to the tax laws, wholly go to
local administrations. First and foremost, it will be law
certainty, not natural resources, that determines whether an area
is viable for investment or not. For natural richness has no
market value without law and order.