SOCIAL GOVERNANCE AND PRODUCTION TRANSFORMATION MANAGEMENT SYSTEM IN MINING INDUSTRY IN INDONESIA: TOWARD A LOCALLY ACCOMODATIVE ENERGY POLICY

Ade Saptomo

doi:10.32479/ijeep.7582

Abstract

Policies in the energy and mining sectors have been directed solely to massive exploitation by multinational energy companies, solely aimed at increasing economic activity and its contribution to GDP. This liberal energy policy has a real impact on marginalization and the absence of recognition of rights to indigenous groups and surrounding communities over ownership and the possibility of involvement in the mining production process. Although the orientation of liberalism in the energy sector policy is possible because of the huge amount of capital needed to start exploration of a mine, more serious efforts in shifting the paradigm of energy policy to accommodate the interests of local people need to be developed by looking for empirical examples that occur in the field. This paper aims to analyze the legal basis for a paradigm shift in energy policy, with the empirical study in a coal mining in West Sumatra that has been active since Dutch rule in Indonesia. This study took a field study in a coal mine in Sawahlunto, and found that ownership is possible along with the declining market value of a mine when it is run by a large company. Some legal considerations such as the recognition of community land rights, and the transformation of the production process from mechanical to manual are considered as accommodative measures of energy policy to enable people to benefit directly from the wealth of natural resources in their region. The results highlight the need to an accommodative legal policy that considers the socio-cultural aspects of the local community.Keywords: energy policy, social governance, production system, land right, coal mine.JEL Classifications: Q4, Q48DOI: https://doi.org/10.32479/ijeep.7582

Highlights

The mining and energy industry is one of the major industrial sectors and has a broad impact on important social, environmental, economic, policy and political fields (Omer, 2008; Sihombing, 2018; Nazarova et al, 2017; Teleuyev et al, 2016)
Mining before the autonomy era was managed in a mechanical way and is back manually
Before the era of regional autonomy, national corporate governance experienced a reduction in production and even stopped production, but at the same time local mining with local governance increased

Summary

INTRODUCTION

The mining and energy industry is one of the major industrial sectors and has a broad impact on important social, environmental, economic, policy and political fields (Omer, 2008; Sihombing, 2018; Nazarova et al, 2017; Teleuyev et al, 2016). Before the Law of the Republic of Indonesia Number 4 of 2009 concerning Mineral and Coal Mining was issued, coal mining had been established and regulated according to the agreement between concession holders and the community The existence of this kind of context, which is often found in mining activities, makes the direction of energy and mining policies not solely aimed at increasing the national economic value of resource use, and focuses on efforts to accommodate local interests in exploration, production and community management (de Melo, 2017), because its activities undeniably affected the local community lives and their environment (Kitula, 2006; Howitt, 1991; Garcia and Zerda, 2016). This kind of policy, needs to consider legal, political and socio-economic aspects that cover the condition of the mine after exploitation by the company

EXPLORATION OF OMBILIN COAL

LOCAL MINING AND SOCIAL

SOCIAL ACCOMMODATION

CONCLUSION