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Foreign firms face rising anger across Indonesia

Source
Straits Times - November 16, 2000

Marianne Kearney, Jakarta – Grassroots anger with international conglomerates' business practices – making millions from people's land while the people themselves remain poor – is causing disruption to companies across Indonesia and millions of dollars worth of losses.

Many of these people's grievances appear to be valid, but the central government, concerned by more serious conflicts such as those in Aceh and Irian Jaya, shows little sign that it is willing to intervene.

During the past two months the oil fields of Riau have been plagued by a host of burnings, road blockades and other protests. In Lampung, South Sumatra, hundreds of villagers clashed last month with troops and later occupied parliament in a bid to gain compensation from a palm oil company. In Lombok, the offices of mining company PT Newmont were hit by a grenade blast. And, earlier this year, locals protested they had been poorly compensated for their land.

These demonstrators, like a growing army of poor farmers or out-of-work villagers, are taking the opportunity to demand compensation for the 32 years in which they were helpless.

One typical evicted victim of the "New Order's" land grab is Ijin, a Sakei villager living on the outskirts of Duri in Riau. Some 15 years ago he had the run of the whole forest. But he now survives by selling log off-cuts to dealers.

In the same forests where he once used to hunt and fish freely, he must now pay pulp and paper company Arara Abadi 10 million rupiah (S$2,000) for every tonne of logs he removes.

Ijin says Arara Abadi paid nearby villagers only 25 rupiah per hectare for their land. He himself had little choice but to accept the sale of his family land as the local military command accompanied the company negotiators.

Dr Trabani Rap, a doctor and indigenous Sakei from Riau, accuses Caltex and other large companies such as Arara Abadi of taking land from at least 150 locals for a pittance during the Suharto era. He argues that companies should start to repay communities for unfair deals.

Many of the villagers do not want to wait for the companies to reconsider their past policies. They have begun to fight back the only way they know how – through demonstrations.

Angry displaced villagers last month took over Lampung's parliament when police detained villagers protesting over a palm oil company's inadequate compensation for their land. In North Sulawesi, multinational mining company Newmont has also been plagued by disputes with both local villagers and government.

Blockades by local landowners who are unhappy with compensation payments from Newmont have forced the mines' closure four times this year. Mr Edward Pressman, Newmont's public relations manager, says the complaints arose because 12 landowners just wanted more money, while the other 400 landowners were content with their compensation.

Sulawesi is not the only place where Newmont has had difficulties with local groups. A Lombok-based NGO called Gagas Nusa Tenggara ran a large advertisement in the Lombok Post asking for locals' complaints. Gagas accuses Newmont of unfair hiring practices as well as environmental destruction.

Gagas, on behalf of some local fishermen, has complained that Newmont has been polluting their fishing grounds, causing fish numbers to drop and fish and marine life to die.

It sounds like a reasonable complaint, except that the fishermen's grounds are several kilometres away from the site of the tailing dumpings. Also, it is unlikely that mercury tailings, which are dumped in underwater trenches, would be carried that far.

The fishing in these waters is usually aided by either cyanide or small explosive bombs. This usually kills or maims fish in a 500 m radius, as well as kills off all the coral in a 1-km radius.

Mr Pressman said the complaint possibly had more to do with a particular village's anger over Newmont's decision to relocate its port than with environmental damage. He said many of the catches of fish were low because of over-fishing, not because of mercury pollution.

Environmental pollution charges were being levelled at the company in an attempt to gain something, he said. "Clearly, people who want more from the company create an image of a terrible company – one that pollutes and reduces fish catches," he said.

In some cases, it might be to the legislators' political or economic advantage to support these conflicts, said one industry observer. For example, the local government in East Kalimantan wants to buy shares in the major coal company there, while in Riau local oil mining companies with apparently close connections to local parliamentarians would like to starting drilling one oil block.

Riau Governor Saleh Djasit has just announced that the government would like to take over the Pekanbaru coast's plain oil block, currently managed by PT Caltex Pacific Indonesia.

The governor has demanded that the central government award Riau's government a 70-per-cent stake in the fields, which is far higher than the standard production sharing agreement which allows private companies a 15-per-cent stake.

Caltex would like to continue operating these fields as they produce a lucrative 60,000 barrels per day. However, it is not sure to whom and how the next year's contract will be awarded. And, if the legislation on which region controls natural resources is not passed soon, then mining sites could see further turmoil as districts compete for control of the lucrative resources.

"We have some concerns – what happens if there are inter-district sparks over control of resources? Will there be conflicts? And will the security apparatus just sit on the sidelines?" asked Mr Ted Callahan, from KPMG Consulting.

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