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doi:10.1016/j.worlddev.2011.05.015
World Development Vol. 40, No. 1, pp. 189–205, 2012
2011 Elsevier Ltd. All rights reserved 0305-750X/$ - see front matter

Governance Institutions, Resource Rights Regimes,
and the Informal Mining Sector: Regulatory Complexities in Indonesia
SAMUEL J. SPIEGEL *
University of Cambridge, UK

Summary. — This study examines how shifting resource governance regimes affect labor inequities in the small-scale mining sector in Indonesia. It focuses on the implications of governance “decentralization” processes and mining regulation reforms for indigenous and migrant populations who rely on informal (unlicensed) mining for income in Central Kalimantan. While the findings illustrate the territorially uneven impacts of recent reforms, they highlight how dominant paradigms that prioritize the enforcement of property rights schemes have contributed to problems of livelihood insecurity and poor environmental governance. The article urges for more nuanced attention to contested articulations of power as well as local resource rights and institutional arrangements to assist rural com- munities in reversing marginalization.
2011 Elsevier Ltd. All rights reserved.

Key words — small-scale mining, livelihoods, indigenous rights, rural development, Asia, Indonesia



INTRODUCTION

As the last two decades have witnessed a dramatic growth in mining activity in many countries, a burgeoning body of re- search has emphasized reasons for revising resource extraction policies and improving governance of the mining industry. This has been argued from a variety of perspectives, particu- larly to promote equitable socioeconomic development and curtail environmental threats (Bebbington, Hinojosa, Bebbington, Burneo, & Warnaars, 2008; Bridge, 2004; Bryceson & Jønsson, 2010; Hilson & Maconachie, 2009). In a previous issue of World Development, Bebbington, et al. (2008) urge for more attention to how social movements resist the expansion of the mining industry, exploring how commu- nities struggle to pursue rural livelihoods while opposing neo- liberal regimes of development. Their analysis focuses on regions where decades of reform prioritized foreign mining investments, and how, through active resistance, poorer com- munities can be seen as “co-producers” of rural development dynamics. In this study, I build further upon such ideas by examining the challenges of equitably addressing mining and rural development in Indonesia, focusing on multifaceted and at times ambiguous linkages between governance reforms, community rights, and labor dynamics within the mining sec- tor.
The article encourages a critical re-examination of popular global discourses of resource regulation and governance in mining communities as well as specific debates surrounding Indonesia’s political landscape, where the governance of min- eral resources has been a subject of numerous high-profile con- troversies due to conflicts between companies and communities, disagreements over revenue distribution as well as pollution, and land degradation (Ballard & Banks, 2003; Resosudarmo, Resosudarmo, Sarosa, & Subiman, 2009; Shaw
& Welford, 2007). I interrogate a key question that is often overlooked by policymakers and scholars alike: how do shift- ing governance regimes and competing institutional interests affect poorer small-scale mining communities’ resource rights in the contemporary era? I also link this with a second ques- tion: what implications does the non-recognition of poorer populations’ mining rights have for the management of













































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environmental resources and informal livelihoods, particularly in contested areas where unlicensed mining—by indigenous and migrant workers—may be seen as an essential source of income?
Past scholarship has highlighted a heterogeneous array of advocacies addressing why government authorities in Indone- sia should do more to ensure that indigenous people benefit more from mineral wealth and in more sustainable ways (Ballard, 2001; O’Faircheallaigh and Ali, 2008). Yet, despite frequent agreement on the vague assertion that marginalized rural populations (“indigenous” populations and others) should benefit more from mineral developments, the idea that such populations should be empowered more as active partic- ipants who labor within the mining sector receive conspicu- ously mixed levels of support (Downing, Moles, McIntosh,
& Garica-Downing, 2002; Erman, 2007; Resosudarmo et al., 2009). This discrepancy arises particularly as environmental and social problems associated with unlicensed artisanal and small-scale mining 1 activities remain locked in uneasy debates. Such activities, undertaken by diverse Indonesian workforces and usually discussed as “illegal mining,” have expanded over the past decade in numerous regions across the country (Etemad & Salmasi, 2003; Sulaiman, Baker, Susilorini, Telmer, & Spiegel, 2007). Many arguments have been put forward to police “illegal miners” more severely, as has been frequently advocated by large mining companies, who criticize


This study was supported by scholarships from the Cambridge Com- monwealth Trust, Trinity College, the Social Sciences and Humanities Research Council of Canada and the Pierre Elliott Trudeau Foundation. My interests in conducting this research initially started to develop during my earlier work with the United Nations Industrial Development Orga- nization and the United Nations Development Program on mining policy issues. I would like to thank all the people who participated in the study as well as the three anonymous reviewers for their helpful and insightful comments. I owe particular thanks to Budi Sulisorini, Bardolf Paul, Su- mali Agrawal, Rini Sulaiman, Kevin Telmer, Marcello Veiga, Ruben Gonzalez-Vicente, Liz Watson and the staff at Yayasan Tambuhak Sinta in Central Kalimantan for valuable suggestions, encouragement, and su- pport. Final revision accepted: April 3, 2011.
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how small-scale miners cause problems by operating on company-owned lands and widely argue that this deters foreign investment (Bhasin & Venkataramany, 2007; PricewaterhouseCoopers, 2006). Scientific literature often di- rectly and indirectly bolsters this corporate advocacy through industrial and ecological modernization discourses; extensive literature, for instance, emphasizes problems with rudimentary small-scale gold mining such as pollution and land degrada- tion and contend that risks occur due to a lack of rural regulatory enforcement (Edinger, Siregar, & Blackwood, 2007; ICG, 2001; Kambey, Farrell, & Bendell-Young, 2001). However, despite the common advocacy to enforce existing laws immediately, a more recently emergent body of research suggests that the “informal”—unlicensed—mining sector can provide crucial income-earning opportunities to Indonesia’s rural populations and that governance approaches and prop- erty rights regimes must be revised to be more sensitive to communities who depend on informal small-scale mining as a poverty alleviation activity (Aspinall, 2001; Erman, 2007; Lahiri-Dutt, 2004; Yasmi et al., 2005). Some recent studies also suggest that in order to be effective (let alone equitable), environmental protection models particularly need to be more attentive to concerns of vulnerable mining communities in the informal sector (Burke, 2006; Sulaiman et al., 2007). Influ- enced by a growing body of literature on community-based natural resource management (“CBNRM”), largely in the for- estry sector, debates about governance, poverty, and environ- mental sustainability in Asia have increasingly emphasized a rights-based approach, in which equitable development is strongly associated with individual and community rights (Johnson & Forsyth, 2002; Nomura, 2008). While small-scale miners’ livelihood aspirations have not featured prominently in Indonesia’s rights-based or CBNRM literatures to date, and this article will explore reasons for this, understanding contemporary resource governance regimes requires not only a recognition of impacts from mining and regulation chal- lenges in theory; critically, it also requires a close contextual understanding of institutions that address mineral extraction and the mechanisms by which they respond to competing com- munity priorities and views on local labor and environmental
rights.
This article examines complexities in understanding resource struggles in Indonesia’s mining context, investigating institu- tional pressures at multiple geographical scales of governance, and giving primary focus to regulatory dilemmas in Central Kalimantan, Indonesia’s third largest province. Section 2 pro- vides an analysis of the historical development of Indonesian mineral laws and policy institutions in order to contextualize contemporary governance systems and mineral rights regimes. Section 3 investigates complexities and potential problems in conceptualizing both “illegal mining” and “indigenous min- ing” as units of analysis, the risks of small-scale mining for people and the environment, and how such concerns shape advocacies for government regulation and reform. Different types of small-scale mining are differentiated from one an- other, and testimonies from interviewees in 2010 are examined to highlight the contentious implications of recent policing activities in a particular gold mining site in an area called Gal- angan. Section 4 discusses key findings from studying stake- holder interactions in a United Nations development initiative, engaging with government institutions, NGOs, and mining communities to pursue strategies for improving envi- ronmental governance. Advocacies to promote formal legal recognition of local mineworkers’ rights (as part of an envi- ronmental strategy) are examined in conjunction with an array of socio-p