I am reminded once again of S.P. Huntington's "Clash of Civilizations". Even though he doesn't consider Indonesia or SEAsia a 'civilization' -- more an offshoot of Chinese or Arab -- it still applies. In the 80s and 90s, many American "nationalists" were going ballistic over the Japanese investing in American companies, land and other assets. However, there was virtually ZERO reaction about the much larger investments from Canada and European countries.
You can see very similar reactions here. If it's Indian, Arab or other ASEAN investments (as long as it's not Chinese tycoons) they don't even rate a mention.
These mining companies are almost all "Western" companies and thus much more of a "threat" and "need to be curtailed" in the minds of the pribumi gov't leaders. At the end of the day, it comes down to skin color, which actually is nothing short of insanity when a backward country is trying to develop economically.
Thu, 22 Mar 2007
JP/Miners issue 'white paper' against draft mining law
Major mining companies issued a `white paper' Tuesday, calling on the government to retain the Contract of Work (CoW) system under the proposed new mining law if it wanted to avoid creating a major impediment to new investment.
The 'white paper', which was issued by a coalition of major mining companies operating in Indonesia, will be submitted to the House of Representatives' working committee charged with deliberating the mining bill.
The companies' spokesperson, Subroto, who is also a former energy and mineral resources minister in president Soeharto's administration, said it would be better for Indonesia to stick with the COW system.
He said that the COW concept introduced by the 1967 Mining Law had proven its worth in attracting many major foreign investors to the country's mining sector.
Under the mining bill currently being deliberated, a mining firm will operate under a license issued by the local authority in the area where the mine is located.
With the introduction of a licensing system, the legal status of the mining company will be rendered inferior to that of the local government, especially as regards the resolution of disputes.
Unlike under the CoW system, where disputes were settled through independent arbitration, under the new licensing system all decisions will be up to the local authorities.
The status of mining firms was rendered inferior as the local governments could revoke their licenses at any time, Subroto said.
"Any change from the previous Contract of Work system will be a major setback for country's mining sector," Subroto said, adding that Indonesia had become one of the world's biggest tin, nickel, copper and gold producers over the past several years as a result, at least partly, of the CoW system.
Irwandy Arif, representing the Association of Indonesian Mining Professionals, said that the 'white paper' proposed a combination of a licensing and CoW system as a win-win solution for overcoming the deadlock.
The Golkar Party recently proposed that the concept of a "mining activity agreement", which would basically serve in a similar way to the current Contract of Work, be included in the draft law as an option for investors.
The draft mining law, which was submitted to the House last year, is currently being finalized. The House is expected to pass the bill into law this month if the question of the controversial licensing system is resolved.
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