Resources management sharing

Resources management sharing

By Ryad Areshman Chairil

MELBOURNE (JP): The declaration by Exxon Mobil to temporarily
halt its gas production facilities in Aceh was the latest blow to
the Indonesian resources industry after a couple others including
from PT Caltex, PT Newmont, PT Freeport, Indo Muro Kencana, PT
Kaltim Prima Coal and PT Kelian Equatorial Mining.

At a time when the country is experiencing its worst economic
crisis, the mining industry is blamed as the cause of most of the
social problems in Indonesia. The industry is said to have failed
to reach a proper social economic balance between the state,
developers and local communities.

Even developed countries with modern laws with regards to
resources have not been able to solve this problem by reaching a
real win-win solution. Their efforts are focused on how to
minimize problems and avoid potentially lifelong conflicts. One
crucial factor here is the involvement of local people.

Experts have said that Indonesian resources development had
had little local involvement and therefore failed to recognize
locals' claim to the land.

But this negligence has not been without reason. There has
always been a lack of clarity between state laws and the
customary rights on land status. One reason for this is the
interpretation of Article 33 of the 1945 Constitution, with which
the state has always claimed that they hold the sole right to
control all land including customary land -- for the benefit of
the people.

The phrase "to control" has been the source of years of
debate. The interpretation has gone too far, having been
manipulated by high ranking officials to protect their own
political and business interests.

"Controlling" was never used as intended -- to achieve justice
and equality. Benefits of production that were supposed to be
equally distributed were controlled by the state and allocated to
high officials and their cronies. Later, rulers themselves went
into business. The rich became richer and the poor became poorer.

Another reason for the lack of clarity over customary rights
of land is their weak position under positive law. If legislation
of land is based on this right, hak ulayat, it would contradict
the 1945 Constitution and the state ideology Pancasila. So cases
involving this right did not meet arbitration procedures under
the law.

Unfortunately, the state reinterpreted the rights of local
people as the right to compensation from losing their land --
without the people being able to effectively stand up for their
rights.

However what has not been realized here is that in the
transfer of land, from locals to developers in the form of mining
rights, the hak ulayat attached to the land is not automatically
transferred or lost. Locals still believe they have every right
to practice their beliefs on the land.

Therefore there would be two rights on one plot of land:
mining rights and customary rights. Both developers and locals
will keep claiming their respective rights.

In search of a more harmonious relationship, the state should
revise its decision-making process with regard to its resources.
Firstly, it should be realized that future decisions in this area
would be impossible without acknowledging the equal rights of
locals and nonlocals to the land.

Locals do not hate mining activities; they just need to be
respected in the form of participation in every decision. Thus it
would be good to have a public hearing prior to the development
of mining resources. Developed countries have recognized the
importance of such public hearings.

Through public hearings, developers would be challenged to not
only be commercially successful, but also socially responsible.
This mechanism opens an opportunity to create win-win solutions,
thus improving relations and cooperation between the mining firm
and community, which can lead to higher productivity, lower
production costs and a better investment.

Public hearings are positive media to explain details of a
development program and possible impact during the activities.
With this participation, the problem of tokenism is prevented --
where people are consulted or informed about the decision but
with little power to affect it. Public hearings help to encourage
all stakeholders to cooperate and share the management and
responsibility of resources development.

However, such hearings must reach a consensus. It should be
negotiated in good faith where each party is required to identify
their interests and concerns, and determine which, and to what
degree, they are prepared to compromise.

A bargain in good faith requires that the claims made should
be honest, with an open mind and a genuine desire to reach
agreement, as opposed to simply adopting a rigid, predetermined
position without any preparedness to shift.

All discussion materials for a public hearing should be
prepared, which would lead to a legitimate and accountable status
before the stakeholders if a dispute occurs.

Secondly, the state should consider creating a regulation that
can recognize the interest of customary rights relating to
resources development or other industries. A "Native Title Act"
should be formulated like those in Australia and Canada.

These are acts recognizing the rule of traditional law and
customs of the title holders, with reference to international
standards for protection of universal human rights and
fundamental freedom. But at the same time the acts are not rigid
laws because they are open for negotiation in good faith.

For example the Native Title in Australia has established a
Native Title Tribunal. The tribunal is not a court. It is an
institution to receive the application of native titles, to
identify parties to the application, to assist the applicants and
parties to reach a negotiated outcome as well as to accept and
register the claim.

Local people are encouraged to lodge their claims of land to
the tribunal to have it registered and be recognized. Failing to
do so will result in losing the land. The tribunal has the right
to reject inappropriate claims.

If both public hearings and such native title acts are
applied, they would hopefully provide more certainty for the
resources development industry, while locals would also feel
respected.

This is a challenge in the era of regional governance.

The writer is studying for his PhD at the Center for Energy
and Resources Law, the University of Melbourne in Australia.