Improving the welfare of the local people

Mining and oil companies adopt different approaches in carrying out their community development obligations. But their priorities are generally the same -- giving more emphasis to the improvement of the health and education of local people.

Below are the community development programs adopted by several major mining and oil companies. Although they represent only some of the projects currently being implemented, they reflect the companies' strong commitment to building a strong relationship with local communities. * PT Newmont Nusa Tenggara, which operates a giant copper and gold mine in Batu Hijau, West Nusa Tenggara, has established the West Sumbawa Economic Development Foundation as part of its community development activities.

The foundation is involved in three types of activities: community health services, infrastructure improvements and community business development.

The foundation works in partnership with local governments to develop a long-term plan for the future development of Southwest Sumbawa.

The community health services program includes malaria control, HIV/STD education and family health education, while the infrastructure program includes road improvements, the construction of new health centers, renovation of public schools and the development of clean village water supplies to replace a traditional water source affected by the mine's construction.

The community business development program is designed to support new businesses that benefit the local population by providing employment and business opportunities.

Concrete block and precast concrete element production, roof truss fabrication, a sawmill, construction and landscaping are some of the businesses that have been established.

With the assistance of Mataram University's agriculture department, local vegetable and fruit growing and marketing, chicken and beef farming, fisheries and aqua culture are also receiving support.

An independent corporation known as PT Industri Batu Hijau will operate all the businesses developed through the foundation. Eventually, the company will be a majority employee-owned company.

Newmont also established the Yayasan Olat Perigi, another local foundation dedicated to community development. The purpose of this foundation is to identify and carry out projects that originate in the community. For example, it has funded the purchase of hand tractors and the installation of pumps for rice paddy irrigation.

* PT Caltex Pacific Indonesia (CPI), the country's oil producer, has a different approach in conducting its community development program.

From its early years operating in Riau in the 1950s, CPI has adopted a philosophy of growing together with the community. Its commitment to helping improve the community's living standards is implemented through several kinds of programs that continue to run to this day.

From 1955 to 1998, CPI and the state-owned oil company Pertamina spent more than US$86 million on community development programs in the province. Since 1999, CPI and Pertamina have allocated between $3.5 million and $4 million per year to the programs.

The second source of funds is the Social Foundation of Chevron and Texaco Indonesia (YSCTI), a non-profit foundation established in 1993 by CPI's shareholding companies -- Chevron and Texaco -- to help complement CPI-Pertamina's community development programs. Every year, YSCTI provides about $500,000 for the community development projects in Riau and other parts of Indonesia.

Another source of funds is the Voluntary Foundation of Caltex's Employees (YDBKC), a foundation established in 1995 to collect charity funds deducted from the salary of CPI employees, both Indonesians and expatriates, for social activity purposes.

In the early days of its operations, CPI focused its program activities on the heavy construction of roads, buildings and service facilities in remote areas.

In the early 1990s, CPI redesigned its community development programs and policies to concentrate more on communities in Riau operational areas.

Through the new policy, CPI focuses more on three critically important areas of community wellbeing: health, education and income generation.

To improve the community's health standards, CPI builds clean water facilities, health care centers and equipment, provides mass medical services and mobile health services, improves sanitation of houses, provides nutritional food for children and infants and several other health services activities.

To improve the quality of education and human resources, CPI has built educational facilities, including laboratories, complete with equipment and provides practical training for local senior high school and university students.

Among the programs funded by CPI to improve the community's income or to provide job opportunities are training and guidance to manage small-scale industries, fisheries, farming and plant seedlings.

* PT International Nickel Indonesia (PT Inco), which operates a nickel mining operation in Sorowoko, Central Sulawesi, has its own formula for conducting community development programs. To date, Inco has not only trained thousands of Indonesian employees and provided them with skilled, well-paying jobs, but it has also built schools, constructed housing, supported health and sanitation systems, assisted in agricultural development, built bridges and roads, as well as awarding scholarships to university students.

Since starting its operation in the late 1960s, the company has built two kindergartens, two elementary schools and a junior high school. The company has also assisted in building schools and teacher training facilities in nearby communities, and provides salary enhancements to teachers in remote areas as well as post secondary student scholarships as part of its educational support program.

There are 3,600 students and 250 teachers in the school system sponsored and built by PT Inco.

In health care, the company has built a 42-bed hospital and medical clinics in Sorowoko and a number of surrounding villages for the use of its employees and other citizens. The company also provides free medical examinations and treatment to all natives of Sorowoko who are in financial need. Others receive discounts of 50 to 75 percent on health care costs.

In the infrastructure sector, the company has built power facilities, roads, more than 900 subsidized houses, an airport, seaport, places of worships, parks and sporting facilities, water and sewage treatment plants, TV relay stations and community centers.

In addition to such activities, Inco also sponsors agricultural counseling for local farmers and provides training in a variety of industrial skills to qualify local residents for employment either at Inco or in other companies.

*PT Freeport Indonesia, the giant copper mining operator based in Irian Jaya province, focuses on the improvement of health and education among locals and the development of basic infrastructure such as roads and bridges in conducting its community development programs.

But unlike other companies, Freeport could have taken more concrete steps in seeking to empower the local economy.

In September last year, it agreed to establish a trust to benefit Amungme and Kamoro communities, the original tribal inhabitants of the Gresberg mine project.

Under the agreement, Freeport will pay US$500,000 per year into the Trust and will initially inject a further $2.5 million, representing funding for 1996.

The agreement is additional to earlier agreements between Freeport and the local communities, including the Freeport Fund for Irian Jaya and existing land use recognition programs through which about $20 million in annual development funding is provided to communities in the mining area. (Hendarsyah Tarmizi)