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Mineral Governance, Conflicts, and Rights: … Governance, Conflicts, and Rights: Case Studies on...
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Mineral Governance, Conflicts,
and Rights: Case Studies on
Informal Mining of Gold, Tin, and
Coal in Indonesia
Nina I. Lestari Subiman
Department of Management
Faculty of Economics University of Indonesia
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Outlines
• Introduction
• Governance Issues
• From Informal to Illegal
• Case Studies
• Conclusions
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Introduction
• ANU thesis
• Fieldwork phase 2006 – 2007
• Mineral Commodity: gold, tin, and coal:
– Aspinall, 2001
– LIPI, 2003–2005
• In-depth interview and literature study
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Governance Issues
• State’s Control Right (HMN)
– Article 33 point 3 of 1945 Constitution of Republic
of Indonesia:
Land and water and the natural riches contained
therein shall be controlled by the State and shall
be made use of for the benefits of the people
• Mining Law 11/1967 vs Agrarian Law 5/1960
• Illegalising informal mining
• Decentralisation issues
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From Informal to Illegal
• People’s mining (Mining Law 11/1967): …the mining activity conducted by the locals in small-scale or
in collective with simple tools for their own income.
…can only be carried out by the local people holding a Mining Authorisation for people’s mining.
• Illegal Mining (Ministry of Energy and Mineral Resources): Mining business conducted by personal, group of
people, or company/foundation which has legal entity which in their operation do not have permit from government institutions according to the law.
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The Statistics
• 90% of artisanal and small-scale mining in Indonesia are illegal (Aspinall, 2001).
• There are approximately 77,000 illegal mines in Indonesia with around 465,000 of estimated employment (UN, 1996; ILO, 1999; Avila, 2000 in Hilson, 2002).
• Indonesia’s Central Bureau of Statistics (BPS) records average informal sector employment in mining during 1997-2002 as 324,000 (Heriawan, 2004); or about ten times the average number of formal mining employment in the same period, which is 34,000 (PricewaterhouseCooper, 2004).
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Research Locations
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Pongkor
• Located in West Java; 80km southwest Jakarta.
• The largest gold deposit in Java with reserves 98t of gold and 1026t of silver.
• The mining company, PT Aneka Tambang Tbk (Antam) operates under Exploitation Mining Authorization KPDU 893 and covers area of 6047 ha.
• Three villages share access to Pongkor: Bantarkaret, Cisarua, and Malasari.
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Pongkor’s
Informal Gold Mining Diagram
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Related Issues
• Pongkor’s informal mining is a recent
phenomenon
• Gurandil Glorious Era
• Migrant workers lead to conflicts
• Security Forces
• Environmental Degradation
• Aftermath
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The Local’s Voice
• Pongkor is Ours
• Unfair Aid Distribution
• Environmental Problems due to the
company’s mining operation
• High Hopes on Employment
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West Bangka
• A district located in Bangka-Belitung Province with Mentok as its capital
• 2820.61km2 or 17.17% of the total provincial area
• Five sub-districts under West Bangka: Mentok, Tempilang, Simpang Teritip, Jebus, & Kelapa
• Mentok was once an important port during the colonial era and was the centre of British, then Dutch tin mining companies
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Bangka’s
Informal Tin Mining Diagram
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Related Issues
• Bangka’s informal mining has a long history
• Pepper and Ruber Price Drop
• Private Smelters
• Environmental Degradation
• Over Supply → Tin Price Drop
• Timah’s Financial Loss
• Smelter Closure (Dark October)
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TI’s Voice
• The government has been repressive in
the past
• Timah pays lower and slower
• Local government never provides
assistance in exploration; only deals
with collecting fee and giving permits
• No clear regulation
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South Kalimantan
• The smallest province in Kalimantan
(37,530.52 km2).
• Has 11 districts and two municipalities
with Banjarmasin as its capital
• The second largest coal producing region
in Indonesia after East Kalimantan,
churning out 36.12 per cent of the nation’s
coal output and contributing to IDR 250.96
billion in 2003.
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South Kalimantan Informal Coal Mining
Diagram
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Source: PT Arutmin Indonesia
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Related Issues
• 1973 oil crisis → Keppres No.49/1981
• Involvement of KUDs
• Insatiable demands → Proliferation of PETI
• PETI in the decentralisation era
• A resistance movement against big mining companies
• Mining partnerships
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Conclusions
• Being informal is desirable
– formal and informal mining run in parallel
operations
– Awareness of Illegality
– Cost-Benefit Analysis in Crime
• This resource is ours, not ours
• A thick grey line
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Thank You