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?