Democracy, control and natural resources

Down to Earth No. 46, August 2000

The tension between state control over resources and local communities' demands for 'sovereignty'.

The tug of war between the centre and the regional governments has dominated the debate about regional autonomy in the media, in parliament and among Indonesia's creditors. But just as important in terms of its implications for natural resources is the tension between local governments and the populations they are supposed to serve. The main imperative for the state is to generate income, however this is shared out, while for indigenous and rural communities whose future livelihoods depend on the continued existence of these resources, the main imperative is sustainable use for the benefit of current and future generations.

At present, the balance is tipped against community resource rights and sustainable resource management. The regional autonomy laws themselves - along with other resource-related laws, on forestry, mining, oil and gas and others - encourage local governments to focus on income generation through large-scale commercial resource exploitation. At the same time, the influence of the military remains strong and anti-community; corruption is prevalent at all levels of government and in many areas the development of democracy at local-level as a counter-balancing force, is weak.


Economic viability

Laws 22 and 25 imply that autonomous areas should be economically viable and that they should not spend more than they earn. Although this would appear to be designed to encourage a responsible attitude toward financial matters, there are serious implications for natural resources. The concern is that a requirement to balance the books and to fulfil some undefined requirement to be economically viable will lead to an emphasis on income generation from natural resources. There will be pressure to prioritise short-term natural resources exploitation over long-term sustainable management.

Law 22/1999 says that:

"Regions shall be formed based on considerations of economic capacity, regional potential, social-politics, the size of population, the area of the region concerned and other considerations which enable the organisation of Regional Autonomy." (Clause 5,1)

There is no explanation of "economic capacity". Furthermore, Law 22 says:

"Regions incapable of organising regional autonomy may be eliminated and/or merged with other regions."(Clause 6)

Although the criteria for deciding whether or not a region is "incapable" is to be defined by subsequent regulations, the implication is that "economic capacity" will be one. It has certainly been interpreted this way. In November 1999 a Jakarta Post article stated that regional officials were under pressure to raise revenues in order to "win autonomous status before the law comes into effect in two years time." It also said that "the criteria include the ability to manage their own affairs and a certain degree of financial independence."(JP 29/Nov/99)

In other words, the "capacity" requirement puts pressure on the regions with minimal natural resources to exploit what they do have for all they are worth, in order to establish their viability and ensure they are not stripped of their status as an autonomous area.


Income generation versus sustainable natural resource management

This puts income generation at the top of the agenda for many regions. It means that natural resources protection and the recognition of local communities' rights to manage resources are likely to be pushed down the priority list - a tendency which has been highlighted by the Jakarta-based Indonesian Centre for Environmental Law, ICEL. According to ICEL's director, Achmad Santosa,

"People prefer to talk about decentralisation of natural resources, which are more economically or profit-oriented, instead of decentralisation of environment management which is considered a 'responsibility'....."

ICEL points out that various regulations on environmental management and natural resources including the 1997 environment law and the 1999 forestry law, still vest most authority in central government. According to Santosa, there is a need to prepare strategies and guidelines on law enforcement and environmental compliance to enable municipalities, districts and provinces to carry out environmental management duties such as environmental impact control. At a seminar on decentralisation and environmental management, Santosa urged the government to look at current failures - at policy, implementation and institutional levels - in current environmental management to anticipate future problems. New "pro-job, pro-people and pro-environment policies" are needed, he said, along with strong public control through the mass media and civil society, to ensure transparency and open government. ( Jakarta Post 13/Jun/00)

There are many other issues related with environmental management within and between districts and provinces. One question which has not been touched on, for example, is how cross-boundary issues - at district or provincial level - will be handled. Where rivers systems are affected by pollution or soil erosion in one district, who is responsible for bearing the costs and bringing the polluters to justice? There will be immense pressure on national parks too, which, at the moment, remain under Jakarta's control. Where these cover a large part of one district, the local government may wonder how it can generate enough income to make their districts 'viable' without issuing logging, plantation, mining and other licences.


Fisheries: inappropriate boundaries

Provinces are responsible for the exploitation and management of natural resources in provincial waters as distinct from district/municipality waters. Provincial waters are defined as the "marine area of twelve marine miles measured from the coast line toward the open sea and or island waters." District and municipality marine areas extend only up to a third of provincial limits.

The setting of different boundaries has been criticised as nonsensical since the specific areas cannot correspond with fish stocks moving freely from one area to another, nor make sense to fisherfolk who follow the catch across wide areas. (see Kompas 27/June/00).

Poor legal protection

Much depends on how far existing national laws and future local legislation on environmental protection are enforced by regional authorities. The likelihood of much effective action in the courts is very small since the judiciary remains extremely weak in Indonesia. Despite universal agreement that the judiciary urgently needs a total overhaul, little progress has been made. Big corruption cases have not been dealt with and people responsible for human rights atrocities have not been prosecuted. One of the most politically important issues, the need to deal with the corruption and human rights crimes of former President Suharto, has been stalled as the former dictator's doctors insist he is unfit for questioning.

Environmental crimes also remain unpunished despite repeated threats of prosecution for companies starting forest fires or polluting the surrounding areas. In short, corrupt courts and a non-functional legal system present another huge obstacle to the sustainable use of natural resources and the livelihoods of local communities under decentralised government control.



Indonesian remains one of the most corrupt countries in the world, 80th out of 85 in 1998 according to Transparency International ratings. Corruption is an ever-present influence throughout the political hierarchy. It increased massively during the Habibie era when the transition from authoritarian government to a more open political climate also meant a free-for-all for anyone in power to exploit their positions before reform could sweep them out of office.

At central government level, corruption threatens to limit the extent to which authority is transferred to the regions. "Not suprisingly," claims economist Anne Booth, "the loudest critics within Indonesia of the new legislation are those central government officials, for example in the National Planning Agency (Bappenas) whose lucrative empires, carefully built up over the Suharto era, will collapse if a process of genuine decentralisation is implemented" (Jakarta Post 18/July/00).

At the same time, at local government level, the opportunities for KKN - corruption, collusion and nepotism - will increase dramatically if authority is successfully devolved from Jakarta. There will be ample opportunity for local officials to negotiate lucrative contracts, kickbacks and unofficial levies. Indonesia's judiciary, itself stained by corruption for decades, will not be trusted to take effective action against illegal practices until thoroughgoing reform has been carried out. Once again the best guard against the worst excesses will be a resilient and active local level democracy which requires its local government to be accountable to its electorate.