Most southeast Asian countries operate relatively well developed extractive sectors. However, at the local level, significant knowledge asymmetries remain between companies on the one hand and civil society on the other, with municipal and provincial governments often falling somewhere in between. Local-level oversight mechanisms frequently fall short, especially in terms of assessing complex company activities, and local government officials and parliamentarians may not always understand their roles and responsibilities with respect to the sector.
Such asymmetries can generate potentially destabilizing tensions, especially if community members feel they are likely to remain poor despite the wealth being extracted from beneath their feet. For instance, in Indonesia’s West Papua province, protest and conflict around a major gold extraction project started once mining began, when community members felt as though they experienced the negative externalities of mining without any significant increase in their well-being.
The Revenue Watch Institute – Natural Resource Charter, as part of the USAID-funded IKAT-US Project: A Southeast Asia Partnership for Better Governance in Extractive Industries, held a capacity building training program on subnational governance in the extractive context in Bogor, Indonesia for 35 civil society and government participants from Cambodia, Indonesia, Malaysia, Myanmar, the Philippines, Timor-Leste and Vietnam. The training was a mix of presentations, group discussions, panel discussions and interviews. Participants were exposed to different approaches, informed by case studies, to responding to opportunities and challenges at the local level.
In its first day the training helped participants to learn more about their respective country contexts, including detailed discussions around decentralized mineral licensing and revenue sharing. Participants learned about the key features of a regular licensing system, pros and cons of decentralizing such a system, and the peculiarities of the Indonesian model.
The session on revenue sharing was of great interest to participants from several countries—those where resource revenue sharing is being considered (such as Myanmar), where it is currently in place but is contested (such as Malaysia), and where there simply isn’t enough transparency in the process (such as Indonesia and the Philippines). Attendees discussed different typologies of resource revenue sharing and possible alternatives that could be as or more effective in responding to subnational needs.
On the second day, discussion focused on local content and how it is a subnational concern. Colleagues from Indonesia’s Bojonegoro district had interesting experience to share on the Bojonegoro’s local content regulation. The revenue management session largely focused on challenges with revenue sharing and national and subnational examples of how governments devised mechanisms to respond to these challenges.
The next session, on transparency, included videos and discussions on the Extractive Industries Transparency Initiative (EITI) and several case studies which prompted engagement and excitement. Mung Don, a participant from Myanmar, found subnational transparency initiatives from other countries very inspiring and relevant to his country’s approach to the EITI process. “We learned a lot from Indonesia and the Philippines’ experiences, including their mistakes and the challenges they face,” said Mung Don. “We hope we can do better to prepare for the EITI process in Myanmar.”
Participants spent the final day discussing local-level issues around the decision whether to extract. Pak Purwo of the department of politics and government at Indonesia’s Universitas Gadjah Mada led the session, explaining how such decisions must be integrated with national decision making processes. At the end, country participants brainstormed about the relevance of existing subnational interventions to their own contexts and how they would frame some of their existing interventions differently based on what they learned.
As a result, participants from Myanmar plan to push for local content regulations to ensure that the benefits of mineral extraction reach citizens, advocate that revenue is shared fairly between the central and state governments, and support democratic elections at the local level as part of the country’s constitutional reform.
Augusto Blanco, Jr., a member of parliament from Compostela Valley province in the Philippines, said he was inspired by the training to learn more about the cultural systems of his area’s indigenous people. He said he is keen to explore ways to utilize resources to address conflict between the indigenous peoples, the government, and companies extracting gold. And participants from Universitas Gadjah Mada who are running the new Asia-Pacific knowledge hub had several ideas about reformulating the subnational agenda for use in future trainings.
Varsha Venugopal is a subnational capacity development program officer at the Revenue Watch Institute – Natural Resource Charter.