Call for new mining law to be delayed

Down to Earth No 67  November 2005

Indonesian civil society organisations are calling on parliament to delay deliberations on the Mineral and Coal Mining Bill and to focus instead on passing a new umbrella law on natural resource management.

The mining bill, is designed to replace the 1967 mining law, which was passed during the early years of former President Suharto's rule and opened the door to foreign investors in the sector. The current contracts of work, signed by companies like Rio Tinto, Freeport, Newmont and Inco, are based on this 1967 law.

A coalition of five NGOs issued a detailed position paper in August arguing the case for prioritising a new natural resources law over the mining law. The paper points to 30 years of severe environmental impacts of mining and conflicts between companies and communities. The lack of coordination arising from the sectoral approach to natural resources, say the NGOs, has led to overlapping authority, unsustainable policies, conflicts of interest, destruction of natural resources, poverty and injustice.

The paper reminds parliamentarians that a decree issued by the nation's highest legislative body (TAP MPR IX/2001), issued four years ago on Agrarian Reform and Natural Resources Management, was aimed at addressing the problems arising from the sectoral approach. The decree instructed the president and parliament to withdraw, reform or replace all laws and implementing regulations which conflicted with the decree. Following this, a decision was made to draft a new law on natural resource management (RUU PSDA). (For more background see DTE 59, DTE 57 and DTE 52 ).

The NGOs point to several crucial issues addressed in the draft natural resources law that affect the mining sector and a future mining law. These include adopting a decentralised 'bioregional', rather than sectoral, approach to natural resources management and applying policies which support sustainable development rather than just promoting economic growth. The bioregional approach means taking the linkages between land, coastal, marine and small island ecosystems into account, along with local communities and their cultures in a given area. Whereas the sectoral laws focus on production of commodities, RUU PSDA puts emphasis on the protection of natural resource assets, so that they can be used sustainably.

The draft natural resources law also has implications for the mining and other natural resource sectors, because it tries to settle the fundamental problem of rights over natural resources. It divides rights into three types: ownership, benefit and management. Significantly, ownership rights may derive from state or customary (adat) law and these may be individual or collective (collective rights being immutable). This, argue the NGOs, puts communities in a more important position in natural resource management. The draft law also specifically recognises the right of indigenous peoples over natural resources and provides for the principle of free, prior and informed consent (FPIC) - meaning that mining companies would need to forge agreements with communities who may be affected by their operations in advance of any mining activity.

RUU PSDA does not provide for the reorganisation of government departments or sectoral authorities, but attempts to provide an umbrella for sectoral integration by building on principles of sustainable natural resource management, developing standards for policy-making and establishing a coordination mechanism.

Under the draft law, a new ministerial post is set up to coordinate natural resource management at national level and area management boards are set up, comprising government representatives, plus experts, community representatives, NGOs and company representatives in a given bioregion. Amongst other tasks, each board is responsible for developing sustainable natural resources management strategy and coordinating an inventory of resources in the region. These, plus sub-regional management boards, come up with recommendations and strategies for natural resource management which must become the reference point to be followed by all sectoral agencies in their policy-making.

As of October 2005, the NGO efforts appeared to have had a positive impact. Reports said that environment minister Rachmat Witoelar told MPs in September that RUU PSDA would be submitted within 3 months (end of November/early December). The PSDA bill is now in the National Legislation Programme's priority list for 2006 and has the backing of some MPs who said they would agree to postponing deliberations on the mining bill.

(Source Tunda Pembahasan RUU Pertambangan Mineral dan Batubara dan MARI MENDORONG RUU PSDA, position paper signed by ICEL, WGPSR, HuMa, Pokja PA-PSDA and JATAM, August 2005.)