Natural Resources for Local People’s Welfare? People Participation in Oil Governance of CEPU Block, Indonesia
International Journal of Arts and Sciences, Vol. 4 (13), 169-87. (ISSN: 1944-6934)
19 Pages Posted: 5 Apr 2012
Date Written: November 19, 2011
This paper discusses findings from two recent studies for better participatory approach in oil governance of Cepu Block. The first research by Sugiri (2010) has shown that equity failures have been there resulting in a kind of deprivation to local people in benefiting from the oil economy. Investigating people perceptions in eight policy areas, i.e. job opportunity, income taxation, minimum wage, social security, education services, health services, public infrastructure, and sheltering to identify equity issues in benefit distribution, the study has found that equity failures are confirmed and that the existing situation is generally worse than five years ago. Local people feel that job opportunity, for example, has slightly been decreasing during the last five years despite the increasing incoming workers from other regions. It is therefore recommended that the inequities be alleviated, and an important related study has been done by Adiputra (2010) proposing measures towards better participatory oil governance.
The second study has developed a model of oil governance that would alleviate equity failures and thus make the local people better off after they have been deprived in the existing mechanism. The local people have not been able to properly involve in, and therefore to benefit from, the oil economy so far because of some reasons that have already been there for a long time. Their skill level is so low that makes them unable to involve in the productive activities of the oil exploitation. More unfortunate is that their aspirations cannot be accommodated in the decision making mechanisms. The study then recommends short, middle and long term measures to be taken by all stakeholders.
Keywords: Equity failures, Oil governance, People participation, Regional development
JEL Classification: A12, H23, O15, O29, Q32
Suggested Citation: Suggested Citation