Improving the welfare of the local people

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)