articulated this sentiment: “while

articulated this sentiment: “while many deci- sions that directly affect local people’s access to and use of lo- cal forest, land, coastal, and marine resources have been delegated to the districts, the Ministries of Forestry and Min- ing have managed to retain a greater measure of centralized control over their respective realms than most other minis- tries” (p. 621).
Sumule (2002) nonetheless drew a cautiously optimistic out- look on early opportunities of decentralization under the Autonomy Laws and empowerment of indigenous people in mining areas, exploring evolving possibilities through judicial and customary institutions. Contextual knowledge in Indone- sia’s mining sector, however, often leads to the concern that foreign mining companies own large proportions of mineral rights in key geologically rich areas, which prevent local gov- ernments from being able to consider possibilities for giving greater attention to indigenous land claims or re-distributing mineral resource ownership (Wulandari, 2008). 7 Studies of bribery and cronyism in the decentralization era also illustrate how local governments have failed to do their part responsibly in managing mineral resources (Smith, Obidzinski, Subarudi,
& Suramenggala, 2003). Tsing (2005) notes “decentralization of natural resource permits in 2000 spread the possibilities for corruption” and examines political frictions surrounding illegality in Central Kalimantan, noting “illegal resource


192 WORLD DEVELOPMENT

extraction rocketed out of control” (p. 17). Her work also emphasizes how the illegality of small-scale miners’ labor serves multiple exploitative purposes for large corporations, as poorer mineral-seekers “lead company prospectors to the best spots” and then, later on, “the companies displace them.. .and complain about the illegals, blaming them for environmental problems, thus protecting their own reputa- tion” (p. 67). Manus (2005) adds to such concerns by lament- ing that the idea of “indigenous mining rights” remains an illusion, flatly declaring “indigenous mining rights are not rec- ognized by the Indonesian authorities who favor large-scale commercial exploitation over small-scale mining” (p. 2).
Interpretations of macro-economic and political debate about foreign investment provide key overarching lenses through which to understand contentious governance pres- sures in Indonesia’s mining sector. In particular, the heavily publicized Bre-X scandal cast an ominous public relations cloud over the multi-national mining industry in Indonesia. Critical scholars widely recognize that, in the case of Bre-X, a Canadian-based multi-national company, global investors were deliberately misled by company officials about business prospects and local resource viability in Kalimantan. The ensuing scandal involved webs of corruption that shook con- fidence in the mining industry from Indonesia to Canada and countries far beyond; the shock waves served, intellectu- ally speaking, as an occasion for re-defining the “economy of appearances” in a far-reaching global mining culture that allowed wealth accumulation to intensify merely based on the “illusion of success” (Tsing, 2005). Recent pollution and corruption-related scandals surrounding Newmont and other companies in Indonesia have become high profile as well (Shaw & Welford, 2007), and the Indonesian Government has been under increased pressure to improve the international image of the mining industry. “Repairing the image” of the industry, however, has been pursued with controversial ap- proaches, producing particularly questionable benefit for mar- ginalized groups in rural areas. The government’s use of police has repeatedly been represented as a show of support for for- eign companies in order to entice investment; the Indonesian Embassy Office in Canada was unambiguously advertising its fervent support for Canadian commercial interests when its website declared that it was policing local illegal miners to protect company lands, with a headline that ran “Police Pri- oritize Eradication of Illegal Mining” (Embassy of Indonesia, 2007). Past scholarship has documented numerous instances of police and military crackdowns against indigenous commu- nities, displacing dozens, hundreds, and even thousands of people at a time and involving human rights violations that have been vigorously protested (Downing, 2002; Downing et al., 2002; Welker, 2009; Soares, 2004). The controversies associated with crackdown operations have been all the more “international” in scope as American mining companies reportedly financed the Indonesian military with payments of at least 16 million US dollars between 1998 and 2004, lar- gely to conduct such operations (Aglionby, 2005).
While reports commissioned by large mining companies routinely portray illegal miners as among the very top industry growth problems (Figure 1), macro-economic scholars have also been prone to use harsh rhetoric to describe illegal small-scale mining as a “plague” to investment (Bhasin & Venkataramany, 2007) while presuming, usually with little or no analysis, that law enforcement crackdown operations are suitable solutions. The suppression of informal mine labor can be interpreted in diverse ways that these representations usually overlook or obscure. In a historical sense, it can be seen as taking place to quell the unpleasant rural consequences











Figure 1. Main factors deterring foreign investment in Indonesia—accord- ing to mining companies. Source: survive of mining companies by PricewaterhouseCoopers (2006).


of the economic crisis that contributed to the growing depen- dency on informal sectors including mining in the first place. 8 Following the Asian financial crisis in the 1990s where public sector institutions were crippled and unemployment levels bal- looned, increasing numbers of poorer miners emerged who de- pended on mining as alternative livelihoods failed (Aspinall, 2001). Whether large-scale mining through foreign firms or Indonesian small-scale miners should be prioritized in terms of policymaking thus remains a thorny point of contention, particularly given the fact that small-scale mining provides jobs to significantly larger numbers of people, by a ratio of at least 10 to 1. 9 Recognizing these tensions, the analysis be- low scrutinizes the complexities of managing mineral resources under still-evolving governance regimes. It will examine the environment in which UN policy intervention projects in Indonesia sought to address the mining sector with the view of addressing both environmental protection concerns and lo- cal resource rights. It also examines institutional debates that prompted new reforms to the mineral code in 2009, which pro- duced further political uncertainties. While Palmer (2007) notes that “leadership in the collective enforcement of prop- erty rights” in Indonesia should be recognized as a key ap- proach to resolve resource management problems, can the enforcement of existing systems of property rights deal pro- ductively with the immanent socio-environmental challenges of small-scale mining? Under what institutional apparatuses
can this sector be managed and with what implications