Conflict, contestation, and corruption reform: the political dynamics of the EITI in Indonesia

ABSTRACT

We know little about the political dynamics shaping country responses to the EITI, despite their importance as a determinant of these responses and the fact that the EITI’s success hinges on its ability to attract country members. This paper seeks to enhance our understanding in this respect by examining the Indonesian case. Indonesia was slow to sign up to and implement the EITI but eventually did so. It has remained compliant with the initiative more or less ever since, although its commitment has waned in recent years. We argue that this response reflected the changing balance of power between four sets of actors – national politico-business elites, regional politico-business elites, controllers of mobile capital, and subordinate classes and their NGO allies – as affected by economic shocks, political mobilisation, and elites’ political strategies. We accordingly suggest that EITI proponents consider the nature of such dynamics in devising reform strategies.

KEYWORDS:

• Political dynamics
• political settlements
• EITI
• transparency
• Indonesia
• extractive industries

Acknowledgements

We thank David Brown, Eve Warburton, two anonymous reviewers, and the Editor in Chief for their comments on an earlier draft of this paper.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes on contributors

Andrew Rosser is Professor of Southeast Asian Studies and Deputy Director of the Asia Institute at the University of Melbourne.

Widya Kartika is a researcher at Perkumpulan Prakarsa, a Jakarta-based NGO that focuses on matters of social welfare.

Notes

1 These are precisely the variables emphasised in large-n quantitative studies of the determinants of country responses to the EITI.

2 For an overview of the political settlements framework, see Khan (2010) and Hickey et al. (2015).

3 The material for this and the following sections came from both primary and secondary sources. The authors conducted interviews in Jakarta during September 2017 with approximately a dozen government officials, international organisation officials, and NGO activists involved in EITI processes. We also collected material from secondary sources including government, media and NGO reports as well as reports produced through the EITI.

4 Interview, Jakarta, September 2017.

5 These were Azerbaijan, Cameroon, Democratic Republic of the Congo, Ghana, Guinea, Khazakstan, Kyrgyz Republic, Liberia, Mali, Mauritania, Mongolia, Niger, Peru, Republic of the Congo, and Yemen.

6 Central African Republic, Cote d’Ivoire, Madagascar, Sao Tome and Principe, Sierra Leone, and Timor Leste.

7 Albania, Burkina Faso, Mozambique, Nigeria, Norway, Tanzania, and Zambia.

8 Interview, Jakarta, September 2017.

9 Interviews with Sjahrir, Chairman of the Indonesian Mining Association, Jakarta, September 2017.

10 See, for instance, Hatriani (2017). This notion also came through in interviews with a number of activists and officials involved in the EITI, Jakarta, September, 2017.

11 For instance, Walhi and Jatam, two anti-mining NGOs in Indonesia, have rejected the EITI on the grounds it is a pro-mining initiative (although one local branch of Walhi has joined PWYP). Interview with Ermy Ardhyanti, Artikel 33, Jakarta, September 2017.

12 Interviews with Rivan Prahasya, Transparency International Indonesia, and Firdaus Ilyas, Indonesia Corruption Watch, Jakarta, September 2017.

13 Interview with Emmanuel Bria, Country Manager, Natural Resource Governance Institute, Jakarta, September 2017.

14 The NGOs that withdrew included Indonesia Corruption Watch and Artikel 33. Interview with Ermy Ardhyanti, Artikel 33, Jakarta, September 2017.

Additional information

Funding

We also thank The Ford Foundation for funding the research through its support to Perkumpulan Prakarsa’s project ‘To promote tax and revenue transparency and reduce illicit financial flows in the extractive, plantation and manufacturing sectors in Indonesia’.