Indonesia: Is new legislation on oil and gas a solution?

The Indonesian government is preparing the replacement of the 1960 Oil and Gas Act. The new draft bill has generated strong differences of opinion between government and parliament (Peoples' Representative Council). The central issue of disagreement is the future role of the state owned company PERTAMINA -which currently exploits 85% of the country's oil reserves and 65% of the gas reserves- and its relation to the state's economic interests. Ironically, considerations regarding the peoples' interests -such as the impacts of the oil and gas industry on peoples' lives and on their environment- are absent from the debate at the official level.

Considering the long history of human rights abuses and environmental destruction connected with oil and gas exploitation -both by the state-owned company and by oil multinationals- those issues should have been at the core of the debate. Instead, the government has chosen to focus on opening up the country to further foreign investment by multinationals. The threats of such move are truly alarming, since very well known big fishes - such as Mobil Oil, Shell, Caltex, Texaco, Unocal, Vico, and Total- are waiting to do good business . . . at the expense of the local communities and their environment.

The record of these companies in other oil producing countries (see article on Total and Unocal in Burma in this issue) or in Indonesia itself predict a bleak future coming up with the oligopoly of multinational corporations dominating the Indonesian gas and oil sector. For example Mobil Oil, the biggest producer of natural gas in the country, has been linked to serious human rights violations in the war-torn north Sumatran region of Aceh. Villagers of Tanjungsantan on the East Kalimantan coast have been fighting for years against pollution provoked by oil wastes produced by a Unocal terminal, which is destroying their rice fields, shrimp ponds, mangroves and "nipah" palms. In spite of the local communities claims, the company has never taken responsiblity for the damage inflicted on them. Similar situations have been reported regading other oil and gas companies operating in East Kalimantan, such as Vico (USA) and Total (France) that have been the subject of recent protests by local people.

While the Indonesian government struggles to get its new legislation approved, local people in Tanjungsantan struggle for their lives and livelihoods and have presented Unocal with a list of demands to redress the damages inflicted on them. If these demands are not met, say the villagers, the company should stop operations and leave, after restoring the environment to its original condition.

Source: WRM's bulletin Nº 36, July 2000 

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