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Jakarta Post

Mining and piling national wounds

  • Mohamad Burhanuddin

    The Jakarta Post

Jakarta   /   Mon, October 19, 2015   /  04:45 pm

There was a sad paradox when reading the news related to mining issues in a number of national mass media outlets over the past week. One national newspaper bore the headline '€œSimplified mining sector'€. For the sake of accelerating economic growth, the government will facilitate the entry of investment in the mining sector.

In another part, shocking news came from Lumajang regency, East Java. Because of his active campaigning against sand mining on the beach in his village, Salim Kancil, a farmer in Selok Awar Awar village was killed by about 40 people in the village on Sept. 26.

As portrayed in the media, Salim was allegedly killed in a very brutal way. He was dragged from his house into the village hall.

Then, dozens of people (described as thugs) allegedly sent by the village head, beat the body and head of Salim, even hacking him with sickles.

The Salim tragedy is just a small piece of the story of the suffering experienced by poor people in this country living in the areas close to mining or extractive industries.

A month earlier, dozens of farmers in Urutsewu in Central Java, were assaulted by a group of soldiers who were arbitrarily putting up fences on agricultural land, for an iron-ore mining area.

In Rembang, also in Central Java, dozens of women protesting against the operation of a cement plant in the Kendeng mountains near their village were chased, dragged, beaten and thrown into bushes by police

In Aceh and Papua, the history of mining is full of wounds and gunshots. In North Aceh, the exploitation of oil and gas in Arun sparked armed conflict for 30 years and left more than 20,000 people dead.

Boosting economic growth is often the main excuse for the government to grant mining concessions.

In the regional autonomy era, mining concessions grow like mushrooms in the rainy season. Seeking local revenues, local governments have fought for all types of potential mining industry in their regions
to be exploited, especially during the boom in commodity prices from 2005.

The approximately 3,500 permit concessions in 2004 had grown to around 6,500 in 2006, and increased to 8,000 in 2011. Of these 8,000, about 6,000 overlap.

Does mining really help improve the welfare of this country? Go to North Aceh, Papua, Martapura or to Bima.

There you will find that mining areas are surrounded by settlements of the poor, damaged roads and many young people have dropped out of school.

The mining that is run well is strongly connected to the uneven distribution of wealth.

Political economist Jeffrey Winters says that the power gap materializing in Indonesian society is one of the largest in the world.

In 2010, the average net worth of the 40 richest oligarchs in Indonesia was more than 630,000 times the gross domestic product (GDP) per capita of Indonesia (in Thailand and South Korea the gap is just 190,000 and 69,000 respectively).

Although the oligarchs account for less than two per 1 million of the population, their combined assets are equivalent to 25 percent of GDP.

Indonesia has followed the classic pattern of capitalist development: while the standard of living of the lower and middle classes is rising gradually, a small number of the very rich top layer has quickly left the other citizens in the dust.

What is the source of the wealth of the rich people in Indonesia? Mostly from the extractive industries, including palm oil, which has a socially and environmentally destructive force on a par with mining. The 10 richest people in this country mostly have businesses in mining and palm oil.

The glory days of the extractive sector contributed greatly to the stability of economic growth during the two terms of Susilo Bambang Yudhoyono'€™s administration, which was in the range of 5.3 percent to 6.4 percent.

No wonder that when world commodity prices began to sharply decline in early 2013, economic growth fell below 5 percent.

The heyday of mining (2005-2013) was also characterized by the swelling of the Gini ratio (indicator of inequality).

In 2006, the Gini ratio was recorded at 0.32 percent, while in 2013 it rose to 0.41. This means that the economic growth actually widened inequality.

In the midst of this widening gap, mining-related conflicts erupt everywhere. The Indonesian Forum for Environment (Walhi) notes that the number of conflicts that occurred in 2013 increased sharply from previous years.

Throughout 2013, there were 369 cases, with an area of conflict spanning 1,281,660 hectares and involving 139,874 families. This is quite an increase compared to the year 2012, which saw 198 cases.

Mining conflicts in Indonesia stem from the upstream sector. The law on minerals and coal gives full authority to the heads of regions to determine the mining area to be granted permits for and to choose the companies they give the permits to.

Many areas are not ready to manage permits or prevent conflicts with residents. It appears that illegal miners are managed by powerful people in their area, and friction with local populations is growing uncontrollably.

Injustice is more clearly exhibited around mining areas. Ordinary people living around mining areas have often been persecuted, pitted against each other, labeled as communists and even killed whenever they have tried to question this injustice.

In the period 2007-2013, Walhi recorded that 13 people died, 125 were injured and 234 people were arrested in mining conflicts. They were generally local people who opposed mining in their areas.

Of course we expect the Jokowi-Kalla administration will not repeat the same mistakes. History has proven that mining creates more wounds than welfare.

The author is public policy observer at the Center for Public Policy Transformation (Transformasi).

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