MINING IN INDONESIA: LOCAL, NATIONAL AND GLOBAL

FRAMEWORKS

Sunday 20-Monday 21 September 2015 9.30-4,

Coombs extension Room 1.04 Does the Indonesian mining sector show impacts of the radical economic and political shifts following the New Order in 1998?

Mining was a signature policy associated with the New Order ideology of pembangunan and was characterised by large scale foreign investment and abuse of human rights: of landowners and also workers. In this period benefits from foreign mining investment flowed to the centre. Decentralisation has led to dramatic changes in mining investment and the entry of new investors, including an explosion of small-scale ‘community’ mining, as well as new national and international investors. The last three decades has also seen important shifts in the global economy: the entry of new multinational ‘players’ (especially the so-called BRICs); and the emergence of global

NGOs with reach into both local communities and international organisations

The papers in this workshop present case studies that address the question: Have the rhetoric and practice of democratisation of the political system, the decentralisation of political authority and the 2009 Mining Law impacted positively on the alibility of communities living near valuable mineral deposits to benefit from mining?

Papers will address:

Differing scales of mining activities (small scale, mid-size investments regulated by districts; and large scale multinational mining companies); the differential impacts on affected communities; local political economies of mining; differing community responses to mining.

Contemporary regulatory regimes, associated with both decentralization, special autonomy, the new mining law and social and environmental protection.

The workshop is funded by an ARC Discovery Grant: Community Rights in an Age of Footloose Capital: Mining in Decentralized Indonesia (CI Kathryn Robinson, Anthropology CHL, ANU College of Asian and the pacific, and Partner Investigator, Maribeth Erb, Sociology, National University of Singapore).

Speakers Include: Nancy Peluso (Berkeley), Semiarto Aji (University of Indonesia), Kuntalla Lahiri-Dutt (ANU), Hendrik Siregar (JATAM Indonesia), Arianto Sangaji (York), Andrew McWilliam (ANU), Fitrilailah Mokui (ANU), Eve Warburton (ANU), Omar Pidani (ANU), Prof. Kathryn Robinson (ANU), Ryan Edwards (ANU), Romo Max Regus (Erasmus) If you are interested in attending, please register at Eventbrite: https://www.eventbrite.com.au/e/mining-in-indonesia-local-national-and-global-frameworks-tickets-18504056130 Further information: kathryn.robinson@anu.edu.au / omar.pidani@anu.edu.au The workshop will be held immediately after the 2105 Indonesia Update which is on the theme of ‘Land and development in Indonesia: searching for the people's sovereignty.’ https://crawford.anu.edu.au/events/5918/indonesia-update-2015-land-and-development-indonesia-searching-peoples-sovereignty?tb=download

WORKSHOP PROGRAM

DAY 1 Sunday, 20 September 2015 Coffee and tea available from 9.30 AM and through the day in the Coombs extension foyer

10.00 Welcoming Remarks SESSION I 10.15 Eve Warburton (ANU) Resource nationalism in Indonesia's mining industry. 10.45 Ryan Edwards (ANU) Mining and social development in Indonesia: district-level patterns and impacts

11.15 Arianto Sangaji (York University) Labour exploitation in nickel mine industry in Indonesia

11.45 Q&A

12.30-13.30 Lunch SESSION II 13.30 Maribeth Erb (NUS) Mining talk and silences: Conflict and the possibility for development in Eastern Indonesia

14.00 Max Regus (Erasmus) The Age of mining: legitimacy, crisis and resistance

14.30 Kathryn Robinson (ANU) Foreign investment in mining - an end to precarity?

15.00 Hendrik Siregar (JATAM, Indonesia) Natural Resources is Still a Target Looting of Development

15.30 Q&A

16.00 CLOSE OF SESSIONS DAY 1

18.30 CONFERENCE DINNER

DAY 2 Monday, 21 September 2015 SESSION I

10.00 Nancy Peluso (Berkeley) Agrarian transformations, territory-making, and small-scale gold mining in West Kalimantan

10.30 Kuntala Lahiri-Dutt (ANU) Minerals, materiality and mining: Hybrid geographies of informal mining in Indonesia

11.00 Semiarto Aji Purwanto (University of Indonesia) The golden way: Institutionalization of illegal activities in Indonesia Abstract

11.30 Q&A

12.00-13.00 LUNCH SESSION I

13.00 Omar Pidani Partnership for empowerment? : Critical assessment of the ‘mitra’ system for small- and medium-scale gold mining in Bombana District, SulawesiIndonesia.

14.00 Fitrilailah Mokui Digging for “rezeki”: Health risk and ignorance in Bombana’s gold mining

14.30 Andrew McWilliam Downstream legacies and multiplier effects: Social and environmental impact assessments of ASM in Bombana, Southeast Sulawesi.

15.00 Q&A

15.30 Final discussiion

16.00 End of Conference

List of Abstracts

Erb, Maribeth (NUS)

Mining Talk and Silences: Conflict and the possibility for development in Eastern Indonesia

Abstract

Conflicts over mining are an almost universal feature of the social landscape where there has been an attempt to introduce mining in poorer communities as a pathway to development. Various issues to do with support or rejection of mining become matters which fuel potential strife among supporters and protestors. This was pointed out by Bebbington et al, in an interesting paper where they suggest that conflict often results in positive outcomes. This paper will examine the various "interpretive repertoires" (Gilbert and Mulkay 1984) associated with discourses of the pros and cons of mining in Nusa Tenggara Timur province in Eastern Indonesia. Apart from "talk" about mining, this paper will examine that which is "silenced", that which is feared and whispered about in regards to conflicts over mining, that is the potential for religious conflicts to emerge because of differing opinions about mining. This paper will examine the unspoken and whispered anxieties which imagine the possibility of fault lines that could destroy a community. These types of conflicts and anxieties will be examined against the context of Bebbington et al's suggestion about the often positive outcomes of conflict in mining communities.

Edwards, Ryan (ANU)

Mining and social development in Indonesia: district-level patterns and impacts

Abstract

In this seminar I will present some new district-level evidence on the links between mining and health and education in Indonesia. Using a large cross-section of Indonesian districts in 2009 and controlling for average household expenditures, district per capita GDP, and common province-specific factors, I find that people in districts which are more economically dependent on mining (i.e., a greater share of their district GDP is made up of mining and quarrying income) are less likely to have births delivered by skilled health workers, less likely to have their children enrolled in secondary school, and have children attaining much lower test scores. I also find that households in mining-dependent districts tend to invest less of their income in health and education both in nominal terms and as a share of their income, but there is no statistically detectable relationship between district social expenditures and mining dependence. The second part of this seminar will be an overview of ongoing work using “synthetic control analysis” to study the impacts of district-level mining shocks, and some preliminary results. Synthetic control analysis is systematic way to choose case study comparison units, allowing precise quantitative inferences in small samples (often a single observation) so researchers can put “qualitative flesh on quantitative bones”. To the best of my

knowledge, this is the first application of this approach to porous sub-national data from a developing country.

Lahiri-Dutt, Kuntala (ANU)

Minerals, materiality and mining: Hybrid geographies of informal mining in Indonesia Abstract

If we consider natural resources also as socially constructed, then geologies do not become minerals in and by themselves, but are co-constituted by actors who ascribe multiple meanings and values to them. Such a manner of thinking might help to understand and explain the diverse array of mineral extractive practices that are collectively known as ‘Artisanal and Small-scale Mining’ or ‘ASM’, and that I have described as constituting a part of the, and extension of mining into, the informal sector. It allows us also to think of minerals and mining as hybrid in nature, leading us to engage more fully with what Appadurai and Breckenridge (2009) outline as ‘wet theory’, in this instance of a theory of minerals and mining that is able to accommodate messiness and contextual variations. Following this, I will draw on my recent work (The Coal Nation 2014; ‘Beyond the land-water binary’ 2014), to show how Indonesia’s informal mining can be explained through the lens of hybridity.

McWilliam, Andrew (ANU) Downstream Legacies and Multiplier Effects: Social and Environmental Impact Assessments of ASM in Bombana, Southeast Sulawesi. Abstract The gold boom (and bust?) in Bombana, Southeast Sulawesi (2008-2015) offers an exemplary demonstration of the mixed blessings and governance challenges of ASM in Indonesia. This paper reflects on some of the initial results of applied research undertaken in relation to the social and environmental impacts of artisanal gold mining in the district. The research forms part of a DFAT funded GPFD project entitled: Artisanal and small scale mining for development (eastern Indonesia) [2014-2017]. It brings together researchers from ANU and Charles Darwin University (CDU) in partnership with staff and students from regional universities in eastern Indonesia (Unhalu and Undana) and local government (esp. BLHD). The project is designed to strengthen social and environmental impact monitoring and contribute to improvements in the governance of mining practices across the region.

Mokui, Fitrilailah (ANU)

Digging for “Rezeki”: Health Risk and Ignorance in Bombana’s Gold Mining Abstract

Since the gold rush in Bombana District, Southeast Sulawesi, Indonesia in 2008, miners continue to participate in some unregulated activities across mining sites for various reasons. Although they have been informed about the negative impacts of mining, they have their own view of the health risks of ASGM activities based on

their own experiences. My central questions are: Why do people, in particular women and children, in Bombana become involved in risky activities related to ASGM? How do they perceive the health risks of their activities? What factors shape their risk perceptions? I will be investigating how various structures, social relations; gender relations, norms, culture and values shape the perceptions of such risks? The paper will focus on issues of health risk of gold mining in Bombana’s artisanal small scale mining, I focus on local indigenous Moronene communities, especially women and children; and try to understand how various agencies (lay people, media, government, and experts) construct perceptions of health related risk based on culture, social, gender and politics. I will also investigate further issues of mercury use and environmental health related risks incouding water contamination. The duty of care of the Bombana local government will also be considered in relation communicating and managing the well-researched health risks of gold mining.

Peluso, Nancy (Berkeley)

Agrarian transformations, territory-making, and small-scale gold mining in West Kalimantan

Abstract

Through two global gold rushes, small scale gold mining has been a critical component of agrarian transformation in western Kalimantan. In the 18th century, gold was intimately linked to the emergent formation of the region as a site of global capitalism, landscape transformation, and agrarian commodity production. In the first half of this paper, I argue that gold, more than the trade in forest products and swidden agriculture, drove the first major agrarian transition in western Kalimantan. This pattern of transition has been turned on its head in the recent past: since the 1990s the agrarian transition reconstituting spatial, land, and labor relations in West Kalimantan has been one of the drivers of extensive small scale gold mining in the province. Both cases help make the case for a broader conceptualization of “the agrarian” that includes mining within its purview. In this paper, I compare the emergence, rise and decline of small-scale gold mining in West Kalimantan, examining each period of gold mining’s ascendency as a component of the region’s agrarian history. In both periods, though separated by more some 200 years of colonial, post colonial, and neoliberal state interventions, locally controlled, complex property and access mechanisms, as well as specific forms of governance have generated and maintained the spaces of the mines and mining sites as territories. I will explore the ways in which both old and new practice, work, and claiming articulate with the development and enforcement of local territorial controls that govern illegal mines in today’s unlikely resource frontiers.

Pidani, Omar (ANU)

Partnership for Empowerment? : Critical Assessment of “Mitra” System for Small and Medium Scale Gold Mining in Bombana District, Indonesia.

Abstract

The “Mitra” (literally means partner) system is a mechanism that allows residents of villages, located adjacent to or overlapping with mining concessions, to work

within gold mining concessions under an agreed production-sharing arrangements. Although the Indonesian Mineral Resources and Coal Law

No.4/2009 and its implementing regulations do not fully recognize these arrangements, formal and informal mining operators in Bombana have adopt this

system which they argue, is necessary to empower (memberdayakan) local people.

In taking the case of PT. Panca Logam Makmur (PLM), the largest gold mining business permit (Izin Usaha Pertambangan / IUP) in the district, this paper aims

to examine the “Mitra” system and the extent to which it achieves its stated objectives of empowerment. The evidence derives from 450 direct interviews, 60 group discussions and participant observations conducted during ethnographic field work in the village of Wumbubangka and other parts of the district over the period of August 2014 to July 2015.

The paper begins by providing historical background of gold mining in the district that led to the adoption of the Mitra system. It then offers a critical assessment of the mining regulatory regime and the nominal status of the Mitra system with particular emphasis on the use of the Mitra system by PLM.

I argue that the notion of the Mitra System as a local empowerment practice is

largely rhetorical. The arrangement is really a quasi-legal system that permits mining elites to escape regulatory uncertainties that resulted from the new mining law and overlapping land claims fuelled by random mining concessions allocated by the district government. Yet, it is also a strategic approach that the district network of power within the company and local landlord adopted to reap benefits

and avoid risks over the uneven distribution of gold deposits. The Mitra system has widened the gap between landlords and the landless in the area, and thus may instead contribute to increasing poverty, as access to land for livelihoods is decreasing.

Purwanto, Semiarto Aji (University of Indonesia)

The golden way: Institutionalization of illegal activities in Indonesia

Abstract

The paper will describe how the practice of artisanal small scale gold mining in Kalimantan, Indonesia -that mostly considered as illegal- continue to persist. They do not have any permits issued by the government agencies; yet their activities are openly conducted in the wide areas of gold field. The indigenous Dayak of Central and East Kalimantan, of whom the cases are obtained, is well known as people with a long tradition in traditional gold explorations. They take the gold deposit out from the rivarian with traditional tools and technique, and process it while doing swidden agriculture. The practice was enduring until the outsiders came and interested in exploiting the gold for commerce. In line with

the national policies, as written in the constitution, all the mining deposit is controlled by the state and that the explorations can be operated by a state or private own companies. During the Suharto’s Orde Baru, state control over natural resources was very substantial. There is no room for the communities to easily extract the resources even if it in their locality. Nowadays, after the reformasi, a lot of communities are taking part in exercising the natural resources including gold mining, mostly without any adequate plan, management and permits. Many of them labelled as PETI or penambangan emas tanpa ijin (gold mining conducted with no permits). Through the observations of artisanal small scale gold minings in Kereng Pangi and Sepang (Central Kalimantan) and Kelian (East Kalimantan), I would like to show that this can be performed because of the institutionalization of illegal practice in gold mining. As Giddens has explained, institutionalization is related to recurrent behaviour before it is then accepted as a norm. While permits from the Mining Agencies are absent, the miners maintain good relations and collaboration with other state agencies such as police, head of district and subdistrict, and other formal agencies as well as community leaders. There is a strong indication that this institutionalization today forms the basis of much resource exploitation we see today.

Regus, Max (Erasmus)

The Age of Mining: legitimacy, crisis and resistance

Abstract

This paper intends to answer the main question; how can the mining industry be

explained from the perspective of sociology of development? For answering this

question, this paper focuses on the problems of the mining industry in Manggarai, Flores Island, Eastern Indonesia. In short, the mining problems are associated with decentralization discourse. Moreover, mining industry, in this region, is attracting the attention of many parties in the last decade. Furthermore, what is the most academic attention is the emergence of protest from local actors against the presence of the mining industry.

This paper focuses on three important aspects related to the mining industry in the last decades. First, the legitimacy of the mining industries as a form of multi-facet process including social, cultural, legal and political; second, the crisis of the mining, in connection with its legitimacy, is related to ‘operation’ and the destructive impact of its activities; third, resistance/protest from local realm mainly relate to the position and the key role of religious actors (church) in producing resistance.

This paper is also based on research that is still in progress by using qualitative case study. In addition, key concepts such as society, state and capital (market) to be part of an analytical framework of this paper. This paper, then, will provide a theoretical reflection on a discourse of development; and offers policy implications particularly for the actors of development at the local level.

Key Words: Mining, Decentralization, Legitimation, Crisis, Protest, Religion/Church

Robinson, Kathryn (ANU)

Foreign investment in mining - an end to precarity?

Abstract

Foreign investment in mining has been regarded as a pathway to economic

certainty for some local populations in Indonesia, an assumption challenged by a nationalist mining law passed in 2009. This paper reflects on the history of the nickel mine on Sorowako, South Sulawesi and its impact on community well-being. How has the resilience of the indigenous population been tested and what have they been able to achieve from this development?

Sangaji, Arianto (York)

Enclosure, Mineral extraction and Peasant struggle

Abstract

This paper offers a discussion of the ongoing process of state-led enclosure in relation to the progressive expansion of mining industry after the introduction of the new Mining Law, the Mineral and Coal Mining No.4 of 2009. I seek to draw attention to the hallmark of mineral extraction that requires a highly secure access to land and the mineral deposits below. However, the land is often tied to a complex property rights including common and customary claims. In this respect, the state plays a decisive role to employ ‘capitalist property’ policies on the allocation of land and resource, excluding subsistence - and small-landholder peasants who largely depend on the land for their livelihood. This then leads to the peasant struggle against the enclosure. The paper examines empirically the nickel mines in the provinces of South Sulawesi and Central Sulawesi.

Siregar, Hendrik (JATAM Indonesia)

Natural Resources is Still a Target Looting of Development

Abstract

The Jokowi government has a target of 100% electrification. The target is 35,000

MW with about 60 percent supplied from the coal. Coal production will be encouraged to meet the needs of the plant. Demolition of forests, land grab and environmental problems will follow along with mining operations.

There has been no significant change in the mining policies developed by SBY, particularly on the downstream policy. From the pre-2009 Contracts of Work

(Law No.11/1967), there are approximately 3,000 mine’ permits growing rapidly to 10,926 until 2014, after the enactment of Law No.4/2009 (the Act substitute

No.11/1967). In 2014 the anti-corruption commission KPK undertook investigated mining permits in 12 provinces. They found that 41% (or 4,480) of the 10,926 permits investigated did not have a tax identification number, even though this is a legal requirement for every company.

This points to the relationship between entrepreneurs and state officials, making development the camouflage looting natural resources.

Warburton, Eve (ANU)

Resource nationalism in Indonesia's mining industry

Abstract

This paper examines how politics has shaped the rise of resource nationalism in

Indonesia's mining sector. The term resource nationalism refers broadly to efforts by state and non-state actors to exert greater government control over natural resource sectors. The phenomenon is usually associated with commodity booms, as high prices trigger states' efforts to increase value from their resource sectors. But while the minerals boom is over, we are yet to see a retreat from nationalist rhetoric or policy making in Indonesia. In this paper, I undertake a detailed examination of nationalist interventions in Indonesia’s mining sector. More specifically, I look at three cases associated with the 2009 Mining Law that are consistently cited as evidence of rising resource nationalism: the government’s decision to renegotiate foreign mining contracts, its introduction of new

divestment requirements for foreign mining companies, and a raw mineral export ban it introduced in January 2014. These interventions eschew simple classification as the work of myopic lawmakers or rent seeking politico-business elites, as is often suggested in industry and scholarly analysis. In this study, I focus on the actors promoting change, and identify their different motivating logics. I argue there are three dimensions to resource nationalism: a broad developmentalist dimension, where state actors increase government intervention in resource markets to achieve a set of broad economic and industrial goals; a political dimension, wherein political elites engage with and leverage mass

preferences for nationalist policies; and a narrow rent seeking dimension, which captures how proponents pursue interventionist policies in order to create

opportunity for private economic gain. Each dimension captures a different motivating logic in favour of nationalist change.