Large companies to be required to have community development program: minister

Large companies exploiting natural resources in various areas in the country particularly mining, and oil and gas companies will be required to implement community development program, according to Junior Minister for the Acceleration of Development in Eastern Indonesia Manuel Kaisiepo.

"We will require large scale investors to have social commitment by developing their own community development program," Manuel was quoted by the East Kalimantan Radar Kaltim daily during a visit to the site of gold mining firm PT Kelian Equatorial Mining (KEM) in the province.

KEM is a unit of Anglo-Australian giant Rio Tinto.

He said that currently the large companies were not obliged to make such program.

Manuel is also the coordinator of the Council for the Development of Eastern Indonesia (KTI), chaired by Vice President Megawati Sukarnoputri.

Manuel said that the council was currently developing various models of community development program. He added that the council was looking for input from companies which had implemented such program.

But he did not provide details about the new plan.

Large mining companies and oil and gas firms have been criticized in the past for merely exploiting local resources, but neglecting the development of the economic welfare of the local people. After the downfall of former authoritarian president Soeharto, there has been growing demand for disintegration from resource-rich provinces partly due to the massive exploitation of local resources by large companies and the central government in the past.

Meanwhile, KEM president Charlie Lenegan said that the company had implemented community development program by spending some Rp 27.7 billion (US$1=Rp 10,500) for physical infrastructure development and Rp 2.4 billion for education between 1995 and 2001.(*)