00074918.2013.809847

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Bulletin of Indonesian Economic Studies

ISSN: 0007-4918 (Print) 1472-7234 (Online) Journal homepage: http://www.tandfonline.com/loi/cbie20

Mineral Governance, Conflicts and Rights: Case

Studies on the Informal Mining of Gold, Tin and

Coal in Indonesia

Nina Indriati Lestari

To cite this article: Nina Indriati Lestari (2013) Mineral Governance, Conflicts and Rights: Case Studies on the Informal Mining of Gold, Tin and Coal in Indonesia, Bulletin of Indonesian Economic Studies, 49:2, 239-240, DOI: 10.1080/00074918.2013.809847

To link to this article: http://dx.doi.org/10.1080/00074918.2013.809847

Published online: 26 Jul 2013.

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Abstracts of doctoral theses on the Indonesian economy 239

This thesis inds that ITRO is ineffective in attracting FDI inlows at the sub-regional level. At the bilateral level, it inds that direct BFTAs are effective in attracting FDI inlows into Malaysia but not into Indonesia and Thailand. By cre

-ating such unequal beneits among ASEAN member states, BFTAs may widen

the economic gap in Southeast Asia and endanger ASEAN’s objective of

eco-nomic integration. This thesis also inds that BFTAs hamper intraregional trade,

whereas, at the regional level, AFTA is effective in enhancing it but ineffective in

attracting FDI inlows.

These results show that several levels of economic cooperation exist in Southeast Asia. AFTA (regional), ITRO (sub-regional) and BFTAs (bilateral) remain

ineffec-tive, however, in attracting FDI inlows into ASEAN member states and, accord -ingly, are unable to transform ASEAN’s economic integration from intratrade to combined trade and investment.

Mineral Governance, Conlicts and Rights: Case Studies on

the Informal Mining of Gold, Tin and Coal in Indonesia

Nina Indriati Lestari_{([email protected])}

Accepted 2011, Australian National University

Mining had been occurring in Indonesia long before the present nation came into being. The successive governments of the sovereign Indonesian nation-state have felt it necessary to control mineral exploitation and to regulate mining activities – article 33(3) of Indonesia’s Constitution (1945) mandates the state to control and exploit all lands, waters and natural riches contained therein for the greatest

ben-eit of the people. Through the country’s mining law and government decrees,

these ‘controlling’ and ‘exploiting’ aspects often manifest themselves in the grant-ing of mingrant-ing permits to selective big companies and in the prioritisgrant-ing of their investments and interests. Consequently, Indonesia’s mining regulations have tended to protect the big players, often while illegalising the presence of informal miners.

Informality in the Indonesian economy extends into its mineral industries, from extraction, to processing, to transportation and marketing. Between 1997 and 2000, these activities employed nearly ten times more people, on average, than the formal mining sector. All of those involved in mining are required to have a permit from the relevant district government – until recently, they required permits from the central government – as regulated in Law 4/2009 on Mineral and Coal Mining. Most informal miners choose to operate secretly, however, fall-ing into the category of those performfall-ing ‘any minfall-ing activity without permit from government institutions according to the laws’.

The government’s stance on informal mining also involves local resource gov-ernance: Law 22/1999 on Regional Governance enables district heads to regu-late and issue mining permits to individuals or groups without consulting the central government. Consequently, there are groups of miners who operate with

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240 Abstracts of doctoral theses on the Indonesian economy

this permit yet are still regarded as illegal by the state government. This situation contradicts that of the existing large mining companies that receive permits from the state government, and blurs the legal and the illegal.

This thesis examines informal mining in three locations: gold mining in the Mount Pongkor area, near Cisarua Village, in West Java; tin mining in West Bangka;

and coal mining in South Kalimantan. It uses ield-based methodologies to track

the informal ‘mineral cycle’ – from mining to marketing – as well as thrashing out the gaps and inconsistencies in the legal structure of mineral-resource governance during and after the New Order regime. The study also throws light on the opera-tion of the informal networks and their demand-and-supply responses. Above all, it evaluates Indonesia’s informal mining economy.

The thesis inds that informal miners are unwilling to leave the illegal spec -trum, despite their being regulated; they believe that they are better off within it, and that applying for a mining permit is overly costly and bureaucratic. In contrast, the government is reluctant to acknowledge informal mining, since the sector contributes much less to the state’s income than formal mining entities. It is

more convenient for informal miners to bribe security oficers of the mining com -pany, for example, or to cooperate with local authorities, than to follow regula-tions. For informal miners, these actions are preferable to watching their resources being swallowed up by large mining companies.

Essays on Corporate Governance and Corporate Illegality: Investigations into Firm Performance and Firm Bribery

Dendi Ramdani_{([email protected])}

Accepted 2013, University of Antwerp

Comprising two pairs of studies, this thesis examines the impacts of corporate

governance on irm performance (in Indonesia, Malaysia, Thailand and South Korea) and irm bribery (in more than 50 countries, including Indonesia). The irst pair of studies aims to deine the critical contexts that determine the eficacy of corporate governance. Using irm-level data from the Asian Development Bank

Institute’s Survey of Corporate Governance Practices (2003), it asks (1) whether

conditional irm performance, measured by accounting performance (that is, by the return on assets), affects the eficacy of board independence and CEO dual -ity, and (2) how resolving agency problems can create interdependencies (that is, complementarities and substitutabilities) between corporate governance

mecha-nisms. The second pair of studies focuses on irm bribery as an example of an illegal strategy used for proit by managers and/or irms. Examining global

irm-level data from the World Business Environment Survey (2000) and the World Bank Enterprise Survey (2002–05), it asks (1) which organisational constraints

and motives drive a irm to engage in bribery and (2) how do agency problems increase or decrease the likelihood of irm bribery.

The irst pair of studies inds that conditional irm performance affects the eficacy of corporate governance mechanisms in resolving agency problems; that