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.