Tackling Corruption in Natural Resources Extraction in Indonesia

Indonesia is blessed with very rich natural resources: gold, copper, nickel, coal, bauxite, oil and gas, geothermal, rain forest, various fish species and many others. Yet they fail to generate wealth for the welfare of the people and has become a ‘curse’ to the nation as they leave irreversible damages to the environment and displace people and communities, while channelling the revenues to only a small number of people. 

A recent study by the Indonesian Corruption Erradication Commission (better known as KPK) discovered that during 2011-2016 there were more than 5,000 natural resources ‘illegal licences’ operating throughout Indonesia with different degrees of illegality. Some of the findings are:

90% of licence holders do not report on their mining activities;

90% licence holders do not pay their obligatory reclamation and post-mine rehabilitation deposits;

1,850 license holders do not have a tax file number; 

Some of these licence holders are operating within more than 6 million hectares of conservation and protected forests; 

Current un-collected Non-Tax Revenue has reached IDR 23 Trillion (+USD 2 billion).

In the effort to address the situation, KPK launched the National Movement on Natural Resources and engaged all relevant ministries, provincial and district governments to improve natural resources governance in Indonesia. Also as a result of continuing efforts, KPK recently prosecuted high ranking officials (minister, governors, heads of district/mayors) on natural resources-related cases and at the same time has discovered a manipulation of multi-billion dollars by many different actors in the area of natural resources extraction.

Dr Syarif will share these efforts by KPK RI at the Public Lecture which will be followed by the launch of TC Beirne School of Law’s New Colombo Plan “Exploring Anti-Corruption, Integrity and Corporate Governance in Indonesia” Program.