ILLEGAL GOLD MINING: UNDERSTANDING THE CAUSES AND DEVELOPING MUTUALLY BENEFICIAL SOLUTIONS FOR THE STAKEHOLDERS

• Main Author: Parmonangan Hasibuan, Ongku
• Format: Dissertations
• Language: Indonesia
• Online Access: https://digilib.itb.ac.id/gdl/view/55434
• Institution: Institut Teknologi Bandung

Indonesia has been one of the attractive places in gold mining for the last 50 years. Small-scale mining, the majority were illegal, has flourished since the 1990s, and by 2011 there were around 77,000 illegal gold mining in Indonesia, involving around 465,000 workers, spread in 27 provinces, with an annual production of 130 metric tons, double than the national gold production legally. The activity provided livelihoods to more than one million people in Indonesia, but discharged 70 to 150 metric tons of mercury into the environment annually, rated Indonesia as the world's second-largest mercury polluter. The Indonesian government estimated the potential loss of 80 trillion IDR revenue annually from royalty and taxes, in addition to the restoration cost for the devastated environment and many social conflicts due to this illegal activity. Various conflicts between companies and communities occurred, some with fatalities and significant property damages, making illegal mining one of the primary challenges for mining investors in Indonesia. This research aims to understand the causes behind the rampant illegal gold mining and develop mutually beneficial solutions for the stakeholder, leading to eradicating this illegal activity and mitigating its negative impacts. The study was carried out at two mining sites in Kalimantan, namely Muro and Meratus, with around 10000 illegal miners within approximately 70000 ha, that has been ongoing since the 1980s, resulting in several social conflicts and considerable environmental damages. An inductive approach was used in this study with qualitative research choice applying action research strategy. The study was conducted in two stages, starting with field observations between 2018 and 2020 to identify the actors behind the activities and portray the real situations on-site and in-depth interviews of the relevant stakeholders to understand the causes of the activities and absorb aspirations to develop solutions that would be mutually beneficial for the stakeholders. The observation data were collected during daily interactions with relevant actors, village/tribal chiefs, and government officials. Fifty-one participants, purposively selected from three different clusters, namely the community, including the perpetrators, the industrial mining, and the authorities, were interviewed using open-ended interview questions. Data were analyzed using the content analysis method with the support of qualitative data 2 analysis software, NVivo. The causal loop diagrams showing the interrelationship between variables were developed using the Vensim simulation software. Findings from this study identified six groups of actors in the illegal gold mining activities: miners, processors, suppliers, trader/buyer, sponsors including financiers, and the particular interest groups that provide non-technical services. The particular interest group includes the government officials and law enforcement officers who unofficially protected the activity. Seven categories of factors identified as the causes of this illegal activity rooted in the economic and behavioral factors; encompassing the economic and financial reasons, the entry barrier, the availability of business support, the weak regulatory regime, political and power interests, the psychosocial conditions in the community, and the attitude and behavioral factors. Eight categories of measures emerged to provide mutually beneficial solutions to the problems, further divided into four main approaches: the regulatory approach, the socio-economic approach, the behavioral approach, and the law enforcement approach; all should be integrated and carried out simultaneously. The emphasis on each approach is different for the two study areas due to the different characteristics of the actors and the area. The regulatory approach was identified as one of the critical factors that facilitate the other approaches' implementation. In contrast, the behavioral approach was considered the most crucial approach in providing a more sustainable solution. The result of this study confirmed the findings of previous researches conducted in various parts of the world, with some additional insights that would enrich the literature, particularly the emergence of behavioral aspects as the dominant factor causing illegal gold mining, rooted in the corrupted mentality of the actors in all layers of the business structure. The behavioral approach was an essential approach to be pursued in providing solutions to similar illegal economic endeavors. This research also bought some practical implications to lawmakers, regulators, and policymakers by providing a deeper understanding of IGM to be considered when formulating natural resources, rural development, and land-use policies and management. For mining company management, this study provided insights and inputs that can be utilized to develop cooperation with the community to obtain a social license to operate or develop the community development program as part of its obligation under the prevailing laws. In a broader perspective, similar approaches could be adopted to study the systemic social phenomenon faced by other industries, including in other countries.