Win-win partnership schemes with regions needed

Win-win partnership schemes with regions needed

K. Basrie, The Jakarta Post, Jakarta

In the beginning, many -- including foreigners -- had had
positive hopes in the country's reformasi (reform). After four
years, many dreams have turned into nightmares with the
appearance of so many little "Soehartos".

Shielding behind the reformasi icons, local officials -- from
lower ranks to superiors -- from regional offices,
municipalities, districts and subdistricts are hungrily searching
for businessmen running businesses in their "territories" to ask
for finances for illogical reasons and the so-called autonomy.

These poor officials are in addition to those from the
military, police and local hoodlums.

Such unpopular maneuvers by local officials have played a
major role in the significant drop in foreign direct investment
in this country. And it will continue to drag this country down
into the pit of bankruptcy if no one or no regulations can
prevent this foolish behavior.

The energy sector that is obviously vital and requires massive
capital perhaps needs to be prioritized.

According to Irianto MS Syafiuddin, chairman of the
Consultative Forum of Oil and Gas Producing Regions (FKDPM),
regions that produce oil and gas in Indonesia are viewed as
having provoked or threatened the industry.

"The regions are also viewed as having scared off investors,
whereas we all know that what the regions want is only
transparent revenue sharing according to the law," said Irianto,
who is also regent of Indramayu, West Java.

According to Irianto, who is to speak at Bali's IIOGE meeting,
FKDPM is going to ask the central government for a transparent
calculation on revenue sharing for the budget year 2002 based on
the joint agreement made on Dec. 8, 2001 prior to the issuance of
the controversial Ministry of Finance Decree No. 214/KMK.06/2002.

"The regions strongly reject this decree before any
transparent calculation is made. Apart from violating the
agreement, the minister's decree has also violated Law No.
25/1999 which says the region's share is 6 percent for oil and 12
percent for gas, while actually the regions are getting only 1
percent to 2 percent.

"Therefore the regions request a clarification at the
soonest," he said in his paper prepared for the IIOGE.

The central government will be represented by top officials
from the Ministry of Energy and Mineral Resources along with
finance ministry and interior ministry.

So far, the consultative forum sees that the government
bureaucracy has resumed the former ruling style of Soeharto,
authoritarian, non-transparent and arbitrary.

"We deeply apologize for the (bad) news that has gone around,
which basically expresses our feeling of dissatisfaction for the
way the central government has treated the regions in
implementing policies that do not include the regions'
aspirations and have disregarded the regions as stake holders.

We will always support the entire oil and gas business -- both
at its upstream and downstream levels -- by providing a feeling
of security to investors," Irianto promised.

This way the regions will receive their rights in a fair and
transparent manner, the local human resources will participate to
realize continuous community development and the contractors will
feel more secure due to the peaceful, safe and comfortable
environment.

FKDPM encompasses regencies, mayors and governors of 52
regencies/cities in 14 provinces. Its goal is to enlighten the
frame of mind of several parties including the central and local
governments.

Together with academicians and researchers, it also conducts
studies on policies or regulations that are no longer relevant
and gives inputs to the government, House of Representatives and
other related institutions.

Its recent studies indicate some of the following basic areas
that have to be attended to by the central government in regard
to the aspirations of the regions in order to achieve good
governance.

They include:

* Oil and gas producing regions should share responsibility to
assure business in this sector so that investors feel certain
that the regions are also partners and not merely the objects of
exploitation without receiving any benefits.

* The central government together with the House should
prepare the Energy Law so that in the future there will be no
overlapping regulations or policies.

* The central government is requested to be more transparent
in its revenue sharing so there is a better understanding with
the regions and to avoid any problems that may lead to
disintegration.

* Participation of the regions in preparing the related
regulations and policies in order to accommodate the regions'
aspirations because the exploration and processing of oil and gas
have an environmental impact.

So?