Poverty prevails despite gold deposits

Poverty prevails despite gold deposits

Jongker Rumteh and Muninggar Sri Saraswati, Minahasa

There is not much difference between Buyat Pantai village in
Minahasa, North Sulawesi and other poor villages in coastal areas
across the country.

People in this village live in wooden huts, most of which have
no bathrooms, clean water or electricity and most -- if not all
-- residents make a living from fishing, using traditional boats
and equipment. A fisherman earns between Rp 500,000 (US$55) and
Rp 1 million per month, around the same as the minimum wage for
workers in the province.

One fisherman explained that his family had gotten used to
eating just one meal a day, if he failed to catch enough fish.

Skin diseases are common among the people, who have long lived
without adequate sanitation.

Recently, some of the residents complained about swellings in
certain parts of their bodies. They said they could not afford to
get medication until people from outside the area offered free
medication.

What makes this particularly unheralded village a bit
different is its high-profile neighbor; PT Newmont Minahasa Raya
(NMR), a subsidiary of the giant Newmont Mining Corporation
headquartered in Colorado, the United States.

Occupying some 500,000 hectares of production forests, the
firm has exploited some two million troy ounces, or 62.6 tons, of
gold since its operation began in 1996. Its operational license
expires this year.

Apart from the mines, there are offices and lodges on site
that accommodate some 100 employees. The number of employees has
gradually declined from the initial 700 as its closure draws
near.

The offices and housing areas are of the same standard as most
wealthy developed countries, with an uninterrupted supply of
electricity and clean water as well as a fully stocked medical
center. A well-equipped ambulance is on-call to take sick
employees to hospitals in the provincial capital of Manado, which
is around 120 kilometers away.

Handled by a well-known caterer, the canteen inside the mining
site provides restaurant meals, with Western food like steak or
pasta.

Because it is a close neighbor to the impoverished village,
the company spends some US$330,000 a year for community
development, PT NMR external relations manager David Sompie said.

The company, he said, had built reservoirs and held training
seminars to introduce new skills to the local people. They have
also offered small-scale loans for them either for fishing or
other purposes.

The company has also constructed infrastructure like roads,
public toilets and bathing areas as well as garbage disposal
sites. It still plans to help the village get electricity, David
said.

"But, improving the condition of the people is not as easy as
turning up your hand," he said.

David added that the company has contributed direct and
indirect benefits to Indonesia to the tune of $561 million since
1994.

Several residents living nearby Buyat Bay, however, told The
Jakarta Post that the presence of the company brings little
benefit to them.

"Indeed, the road is better now than before, but the fish are
vanishing. It's probably because they dispose of their waste in
the bay," claimed Chris, a fisherman.

North Sulawesi administration officials refused to reveal the
budget allocations for development in the area around Buyat Bay.

H.D. Waworuntu, the secretary of South Minahasa regency, where
the bay is located, said his administration had developed the
area.

"I don't remember the budgeted amount but we have allocated
it. I think the area only has a transportation shortage," he told
The Jakarta Post.

Theoretically, 60 percent of the state revenue from companies
in the natural resource exploitation business must go to the
regency where the sites are situated, 20 percent to the
provincial administration and another 20 to the central
government.

Economist Drajad Wibowo suggested that the government adjust
its policies involving natural resource businesses like mining or
plantations.

The country already had a heap of legislation related to
business, many of which were overlapping or contradictory, he
said.

Drajad said the laws and regulations, however, did not
necessarily address the issue of having environmentally friendly
companies as they had to invest a lot to start their business,
such as building infrastructure to get to the sites.

"Therefore, no money is left to restore the environment or
help with development of poor villages," he said.

He urged the government to be transparent in allocating the
revenue that was pouring in from such companies.

"Otherwise, the classic story of poor villages next to rich
mining companies will continue," Drajad of the Institute for
Development of Economics and Finance (Indef) said.