Resource Nationalism
The contentious issue of mining concessions granted by the government to major CSOs two years ago continues to pose a significant concern. Whereas CSOs ideally serve as the nation’s ethical and moral guardian, their acceptance of the concessions indicates an increasingly pragmatic stance in their relationship with the government.
It suggests a growing closeness with the power elite. In recent times, this has incited anxiety over their increasingly pro-oligarchy stance and moral cleansing attitude that serve to legitimise the extraction of environmental resources as an alternative source of funding.
The current economic climate in the mining industry has also demonstrably altered the emphasis of academic research, shifting it away from the study of resource nationalism and toward an examination of strategies used to mitigate political opposition.
The mining-related policies enacted by the then Joko “Jokowi” Widodo administration were significantly shaped by resource nationalism, with a particular goal to nationalise two prominent multinational mining companies: Newmont and Freeport.
Since then, the mining industry has served as a crucial pillar supporting the government’s populist drift, particularly in financing large-scale infrastructure projects and facilitating social welfare distribution programmes.
The focus on in-country nickel processing, for example, greatly influences the country’s political and economic environments, shaping internal decisions and international interactions.
The policy focuses on processing nickel ore domestically to enhance its value within the country rather than exporting raw ore (hilirisasi). The policy’s original motivation is resource nationalism, coupled with a significant aim for economic growth and a smooth transition to green energy.
Despite this, the policy has evolved into a handy political device to incrementally stifle dissent and intimidate opponents.
Debates on Revised Mining Law
Debates surrounding the laws on mineral and batubara (mineral and coal – minerba) have remained relevant to this day, despite beginning in 2009. Dewan Perwakilan Rakyat (House of Representatives) has revised Law Number 4 of 2009 on Minerba several times, and the prevailing mining law today is Law Number 2 of 2025.
The intention behind the amendments was to boost the development of allied mining industries, like mineral smelters and power plants.
In the 2020 revision (Law Number 3 of 2020), it is noteworthy that the phrase “regional government” was removed from Article 4, Paragraph 2. This change granted the central government the authority to manage and control the mining of minerals like nickel and coal.
This shift has ignited considerable discussion because it appears to prioritise corporate profit over public welfare. Furthermore, it becomes more problematic when the government uses its domination over these resources to weaken opposition and civil society groups over time.
This is because the updated mining law allows the central government to be the sole administrator of mining concessions, giving it the authority to give and revoke operational permits. While on paper it appears like an initiative to move away from a dependence on private companies, in reality it has also been used to grant concessions to public sector entities and religious groups, the latter ostensibly to pacify dissenting voices.
Religious Organisations as Beneficiaries
The granting of mining concessions to religious organisations like Nahdlatul Ulama and Muhammadiyah has sparked debates in the past few years, as many believe it was offered to obtain the groups’ “loyalty” to the government.
The CSOs’ acceptance of this offer has provoked a strong negative reaction because their fundamental focus is on peace- and nation-building initiatives instead of capitalist activities.
By accepting this offer, these organisations risk becoming dependent on the government, which could weaken their independence and limit their ability to critique social or political matters.
The most recent illustration showcases Nahdlatul Ulama’s resolute stance against zero mining, disputing the notion that mining activities are the principal contributors to the recent calamities in Sumatra.
Their acceptance is more concerning at a time when pro-environment factions have started to emerge within these groups. The youth wings of Nahdlatul Ulama and Muhammadiyah have each recently begun to merge faith and environmental care in their advocacy, contrary to their leaders’ venture into mining. As such, this leads to a question regarding both groups’ internal cohesion and future.
In sum, the acceptance of mining concessions by the biggest Islamic CSOs has contributed towards a further decline of Indonesia’s democracy.
As they establish a closer relationship with the central government, their capacity to effectively function as an intermediary linking the state and the broader populace diminishes. It is also a matter of serious concern, as this erodes their role as a critical voice on social and political matters.
Campuses Are Beneficiaries Too
The revised mining law also allows higher educational institutions to be beneficiaries of mining benefits from private sectors. The government has rescinded the original plan to give universities mining permits, but these institutions could still receive research funding and scholarships from mining-related state-owned enterprises (SOEs) or private companies.
Universitas Sriwijaya (Unsri) and Universitas Padjajaran (Unpad) are among the public universities that have responded positively to this development.
Similarly, this has also drawn public disapproval, as it could be interpreted as taking away the universities’ academic independence and critical voice, especially towards the government and private sector. It also undermines campus neutrality from political influences.
Dissenting voices continue to be an important aspect of democracy, especially at a time when Indonesia’s democratic space is shrinking. While universities have long been a bastion of democratic exercise through freedom of speech and critical thinking, granting concessions could over time reduce their role as a vanguard of democracy.
They notably exercised this role during Jokowi’s second term and the early months of Prabowo’s tenure. For example, various universities banded together in criticising what is perceived as the state’s interference in the election, censorship and the use of repressive measures by law enforcement.
With regard to mining activities, the criticism centres on the potential for corporations to dictate campus-based research into environmental matters, especially those deemed critical of state policies that benefit these private companies in the first place.
At the same time, public universities across the country have also suffered financial stress owing to a reduction in state funding, forcing them to raise tuition fees (by 30-50%) that pass the burden to students’ parents. This fee hike, unfortunately, is still not enough to cover operational costs that include staff salaries, resulting in many lecturers taking on side jobs.
The mining benefits, thus, could be a lifeline that saves the education quality in these universities, though not without a huge cost to their academic independence.
Further down the line, however, accepting the benefits might also impact universities’ relationship with local governments, over which they have the responsibility to oversee the implementation of decentralisation and regional autonomy policies.
This disruption in relationship would also be more prominent in mining-heavy regions (e.g. North Maluku and East Kalimantan) that have struggled with a decline in local revenue. As the central government now holds the authority to issue mining permits per the new Minerba Law, direct engagement between universities and regional governments would also decline in intensity. This is because the central government would arrange beneficiaries (i.e. SOEs or private companies) to directly connect with universities without the involvement of regional governments.
Accepting the benefits might be a pragmatic step to address financial woes, but it is inconsistent with universities’ responsibility as defenders of democracy. These universities would essentially transform into a sort-of subsidiary company to mining corporations that would dictate their academic directions and operations.
Conclusion
In summary, the moral hazard presented by mining beneficiaries is more significant than its advantages. The acceptance of mining concessions by non-state actors, who are ostensibly independent of governmental engagement, compromises their neutral position as moral arbiters. In the long run, the revenue generated from these concessions may fill the coffers of CSOs and campuses, but it risks bankrupting the moral capital that has historically anchored Indonesian democracy.
