Social and economic changes in Papua since the Law on Special Autonomy came into effect

Conference “Autonomy for Papua – Opportunity or Illusion?”, 04-05.06.2003

by Agus Sumule

Agus SumuleFoto: Archive

Agus Sumule

photo: Archive

Introduction

One of the reasons for the introduction of the Law on Special Autonomy for the Province of Papua was the fact that there has been a wide gap between Papua and other provinces in Indonesia in terms of socio-economic development. Being one of the richest provinces in Indonesia in terms of natural resources, the Province of Papua has been exploited since its integration into the Republic of Indonesia by way of extracting its oil, copper and gold, forest, fishery resources, and – later – its natural gas. With regard to this, the introductory part of the Special Autonomy Law states:

“… g. that the management and utilisation of the benefits of the extraction of natural resources in the Province of Papua have not been used to optimally improve the living condition of the Papuan indigenous people, to the extent where it creates a significant disparity between the Province of Papua and other regions [in Indonesia], and is a form of denial of the basic rights of the indigenous people of Papua;h. that to reduce the disparity between the Province of Papua and other provinces, and to improve the level of living of the people in the Province of Papua, as well as to provide opportunities for the indigenous people of Papua, a special policy is needed within the framework of the Unitary State of the Republic of Indonesia.”1

An example of the significant contribution of the Province of Papua to the Indonesian national economy and the unfairness of the redistribution of revenues from the Central Government to the Provincial Government of Papua is presented in Table 1. It is important to note that the figures provided in the table are limited to the contribution of Freeport Indonesia, a world-class copper and gold mine, and other sectors such as oil, forestry and fishery have not been included.

Table 1. Direct revenues of the Provincial Government of Papua from Freeport Indonesia in 1997

Types of Direct Revenues US$ in Million
Royalties 25.26
Deadrent 2 0.21
Land and Building Tax 2.07
“C” Types of Minerals and Water 0.50
Vehicle Tax 0.14
Foreigner Tax 0.004
Total 28.17
Compared with the Direct Revenues received by the Central Government from Freeport (US$ 237 million) limited to divdends, royalties and different forms of national taxes 11,89 %

Table 1 shows that with approximately only 12 percent Papua enjoys very little of what it contributes to the national economy from the exploitation of its resources. This is one the main reasons for the lack of socio-economic development in the Province of Papua. It is also the prime reason behind the demand that 80 percent of all national revenues (tax and non-tax) obtained from Papua be retained in the province, as had been included in Article 33 of the Draft Law on Special Autonomy submitted from Papua.3

Eventually, the Law on Special Autonomy for Papua, Law No. 21/2001, did not accommodate this demand, but stipulated the following: 4

  • The Province of Papua receives all revenues, as do other provinces in Indonesia, in accordance with stipulations in the Law on Fiscal Balancing between the Central Government and the Regions, i.e. Law No. 25/1999. 5
  • Due to the implementation of Special Autonomy, Papua receives additional funds as follows:
    • - 70% of the non-tax revenues from gas for 25 years, which will be reduced to 50% from the 26th year on;
    • - special revenues equal to the 2% of the National General Allocation Fund for 20 years;
    • - additional revenues for infrastructure development to be decided by the Central Government and Parliament (DPR), based on the annual proposals submitted by the Provincial Government of Papua – for the construction of the quality transportation infrastructures in 25 years (Article 34, clause 3, letter f, and its explanation).
  • The objective of this paper is to discuss what socio-economic changes have taken place in Papua since the introduction of the Law on Special Autonomy, effective as of 1 January 2002. To provide a comprehensive picture on the perceived changes, I will present three different viewpoints: (1) my own reflection on the question to what extent the 2002 Provincial Budget accommodates the contents of the Special Autonomy Law; (2) the Government’s version of the success of the implementation of Special Autonomy as expressed by representatives of selected provincial technical departments; and (3) the opinion of the general public as reflected in Papua-based media. I will then summarise factors which I consider crucial in determining the current status of the socio-economic achievements after the first year of Papuan Special Autonomy.

    I hope that this analysis will help the participants of this workshop to come up with strategic ideas on how to improve the socio-economic benefits of the implementation of Papuan Special Autonomy at the grassroot level.

    In how far does the 2002 Provincial Budget accommodate the contents of the Special Autonomy Law?

    Due to the implementation of Special Autonomy, in the fiscal year 2002 the Provincial Government of Papua received additional funds of more than 1.38 trillion Rupiah, which approximately equals 163 million US$. 6 This is an increase of 48 percent of the total General Allocation Fund (Dana Alokasi Umum – DAU) of nearly 2.857 trillion Rupiah for the province and regencies/municipalities of Papua allocated by the Central Government as stipulated by Law No. 25/1999. Almost all of the above mentioned 1.38 trillion Rupiah are derived from the special funds equal to 2 percent of the National General Allocation Fund, because the production capacity of the oil industry in Papua has been significantly reduced and the gas industry is still in the process of construction.

    The question that shall be answered here is, to what extent the contents and demands of the Special Autonomy Law have been reflected in the 2002 budget of the Provincial and Regency/Municipality Governments in Papua. In my book, the title of which translates into ‘One and A Half Years of Papuan Special Autonomy: Reflections and Prospects’,7 I have included a list of general development issues derived from the respective articles of the Special Autonomy Law. These issues, of course, need to be specified further in the form of concrete development activities. A thorough examination of the Provincial Budget 2002 reveals that only approximately 10 percent of these issues were included in the budget, while the rest had not at all been on the agenda.8

    It seems that the Papuan bureaucracy still tends to do ‘business as usual’ – that many elements of the Government program in the year 2002 are in essence the same as in previous years, but with significantly increased funds. This also means that the budget has not proportionally allocated funds to programs aiming at solving the complexity of the problems in Papua – especially the very problems which served as reasons for the introduction of Special Autonomy. No funds have been allocated for the following programs, amongst others:

  • Formation/establishment of the branch of the National Human Rights Commission in Papua, the Human Rights Court, and the Truth and Reconciliation Commission;
  • Development of programs to compensate victims of past human rights violations;
  • Strengthening the democratic process – including the allocation of funds to support the discussion at the grassroot level with regard to the formation of the Papua People’s Assembly (Majelis Rakyat Papua – MRP);
  • Strengthening the socio-economic and political structure of customary communities and customary institutions;
  • Rearrangement of the relationship between the Provincial and Central Government, especially in relation to the execution of the rights of the Central Government in Papua in the areas of defence, security, foreign relations, religion, and fiscal and monetary matters;
  • Opening of the desks of the Provincial Government in the Embassies of the Republic of Indonesia – especially in countries which have cultural similarities with
  • Papua as well as in countries which can provide socio-economic benefits for the development of the Papuan people;
  • Rearrangement of the functions of the National Police in Papua – including curriculum improvement at the Jayapura Police Academy as well as recruitment and training of indigenous people of Papua to become police officers;
  • Recruitment and training of the indigenous people of Papua to serve as attorneys and judges;
  • Development of entrepreneurship targeting specifically the indigenous people of Papua;
  • Special credits for business development by indigenous people;
  • Population census and in-migration management.

If Government development policy and/or allocation of funds in the Provincial Budget are taken as indicators of change, the above shows that very little structural socio-economic change has taken place in the first year of the implementation of Special Autonomy in Papua.

Potential structural changes initiated by civil society

Concerning activities of civil society organisations since the coming into effect of the Special Autonomy Law, I noticed that some potential structural changes have been initiated by these organisations with reference to the Special Autonomy Law as the legal base. These include the following:

  • People’s awareness on the availability of legal bases which they can use to fight for their rights has increased. It has to be noted, though, that this is still very much limited to areas where a relatively intensive public education on Special Autonomy has been conducted down to the village level. The experience of the local legal aid institution LP3BH in Manokwari shows this phenomenon very clearly. This institution had been asked by the Bupati of Manokwari to socialise the Law, and the result was very encouraging, especially with regard to topics related to the protection of their customary rights.
  • Pro-active steps have been taken to realise specific articles of the Special Autonomy Law.  For instance, in February 2002, a Papuan Women’s Forum was held in Jayapura to obtain various opinions on the representation of women in the MRP. To a limited extent, this step has also been taken by the religious and customary communities. Kontras and several other human rights groups have furthermore initiated the drafting of the necessary legal documents for the formation of the branch of the National Human Rights Commission (Komnas HAM) in Papua. In March 2002, the Collaboration Forum of the Papuan NGOs, Foker LSM, conducted a workshop to critically examine the 2002 Draft Provincial Budget. And in April 2002, the Centre for Fiscal and Regional Economy Empowerment of the State University of Papua conducted a workshop to develop principles for customary community empowerment with regard to natural resource exploitation.

The Provincial Government’s point of view concerning socio-economic changes due to the implementation of Special Autonomy

The top officials of the Province, the Governor, the Vice Governor and the Speaker of Parliament, have repeatedly stated that in their view the socio-political situation in Papua has improved since the implementation of Special Autonomy.

Only recently, I interviewed top officials of selected provincial technical departments in Jayapura. Besides asking them to be specific on the programs that have been implemented in the year 2002 by using the Special Autonomy funds allocated for their respective department, I also requested from them a statement concerning the significance of Special Autonomy for their respective area. I received the following responses:

  • Department of Education and Teaching: “The Special Autonomy for Papua allows my department not to discriminate private-sponsored as compared to government-sponsored (state) schools. In the past, only government-sponsored schools were regularly funded by the Government. Since 2002, all schools, private and state schools alike, are financially subsidised by Special Autonomy funds.”
  • Department of Health: “Special Autonomy [and its funds] allows that more medicine is available in public health centres and clinics at the district level. In the past, there were always complaints from public health centres and clinics at the district level about a lack of medicine. Since the second half of the year 2002, we have not received any complaints at all.”
  • Department of Public Works: “Special Autonomy [and its funds] allows us to determine which roads and bridges to build. In the past, it was the Central Government that largely determined which infrastructure should be built. That’s why there are more and better roads to the transmigration areas than roads to the villages of the indigenous people.”

Response of the people

If one bases one’s assessment on what has been reported in the media, from the people’s point of view the first year of implementation of Special Autonomy in Papua is far from satisfying.

The JUBI weekly tabloid in its special edition reported as follows:

“Special Autonomy for Papua was Held Hostage: After a year of implementation, the Special Autonomy has not touched the very problems of Papua. The debate is more on the issue of distribution of funds, who should be responsible to manage them, as well as who should occupy what position. Will the second year of implementation see the same fate …?”

The daily newspaper Kompas reported more or less the same issue in its article entitled “Government, Papuan Special Autonomy, and Corruption.”

There has been the opinion that “…[i]n this first year, the implementation of Special Autonomy is reflected more in the appearance of a number of luxurious cars to support the undertaking of official duties … of the provincial as well as at the regency and municipality [Governments].”  In the same article it was reported that Special Autonomy encourages officials “… to undertake business trips more often to Java.  If not, to Manado …”.

Other criticism was that Special Autonomy makes many Government officials undertake post-graduate studies: “Is the Special Autonomy Fund so abundant that they also have to go to school? … It is very different from the program preached by the Government that education is free [due to the implementation of Special Autonomy]. Until now, we still have to pay for our children’s education …”. And the conclusion that the author of the Kompas article arrives at reads: “… the people have not had a chance to benefit from this Special Autonomy at all.”

Causes

The Special Autonomy for Papua has been in place for one and a half years. Even though it was a new political scheme for Papua, it is fair to expect that the Special Autonomy should start to bring positive changes which can be acknowledged by the people in Papua, especially the indigenous ones, as signs of improvement in their daily lives.

The predominant causes for the limited socio-economic changes in the Province of Papua as of one and a half years after the coming into effect of the Special Autonomy Law can be summarised as follows:

  • The ‘business as usual’-style of the bureaucracy, as discussed above, still prevails.
  • No input in the development program/budget drafting could be provided by the MRP, as its establishment has been delayed by the Central Government. Article 34 (7) of the Special Autonomy Law stipulates that the use of the funds derived from the implementation of Special Autonomy should be regulated by a Special Regional Regulation of the Province of Papua (Peraturan Daerah Khusus – Perdasus), which requires the approval of the MRP.
  • No public consultation was held by the Government and/or Parliament in Papua to obtain as much input as possible from the different levels of the Papuan civil society.
  • Knowledge and understanding of the essence of Special Autonomy on the part of the Papuan bureaucracy and certain Parliamentarians are very weak. For many of them, Special Autonomy merely means that more funds should be available for Papua. But how the funds should be used to implement the very core principles of Special Autonomy remains unclear.

Appendix 1.  Papua Provincial Budget 2001 submitted to the Provincial Parliament

Development Sector Allocation (Rp.) Percentage (%)
a. Industry 730,000,000 0.06
b. Agriculture and Forestry 123,785,649,200 10.13
c.  Water Resources and Irrigation 41,000,000,000 3.36
d.  Human Resources 7,800,000,000 0.64
e. Trade, Regional Economy, Regional Fiscal, and Co-operative Enterprise 32,480,000,000 2.66
f. Transportation 262,495,000,000 21.49
g. Mining and Energy 24,000,000,000 1.96
h. Tourism and Regional Telecommunication 4,950,000,000 0.41
i. Regional Development 33,805,000,000 2.77
j. Environment and Spatial Planning 7,700,000,000 0.63
k. Education, Culture, Youth and Sport 230,385,033,000 18.86
l. Population and Family - -
m. Health, Social Affairs, Women, Children, and Youth 189,800,000,000 15.54
n. Housing and Settlement 9,254,200,000 0.76
o. Religion 5,419,000,000 0.44
p. Science and Technology 39,588,987,000 3.24
q. Law 5,000,000,000 0.41
r. Bureaucracies and Supervision 155,779,319,055 12.75
s. Politics, Information, Communication, and Mass Media 12,600,000,000 1.03
t. General Security and Order 2,160,000,000 0.18
u. Assistance to Subordinate Regions 32,785,000,000 2.68
Total 1,221,517,188,255 100

1 Cf. Art. g and h of the introductory Consideration part of Law No. 21/2001.
2 I.e. tax for unexploited area under the company’s holding.
3 The Draft Law can be accessed at http://www.westpapua.net/cases/autonm/otsusbe.htm.
4 Cf. Art. 34 Law No. 21/2001.
5 For the official Indonesian Version of the Law cf. the Government homepage http://www.ri.go.id.
6 This is based on an exchange rate of Rp. 8,500 per US$.
7 The book is published in Indonesian: Satu Setengah Tahun Otsus Papua: Refleksi dan Prospek, Manokwari: Yayasan ToPanG, 2003 forthcoming.
8 For a summary of the draft of the Provincial Budget 2002 cf. Appendix 1.

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