'Least attractive place to do mining jobs'
JAKARTA: The latest survey from the Canada-based Fraser Institute ranks Indonesia the world's least attractive place to do business in the mining sector, with the mineral-rich country placed last out of 96 jurisdictions surveyed.
In the same survey last year, Indonesia was ranked 85th.
"Indonesia dropped in the rankings from 85th in 2011 to 96th last year due to worsening ratings among survey respondents for political stability, uncertainty concerning environmental regulations and uncertainty concerning the administration, interpretation or enforcement of existing regulations," the survey said.
Some 27 per cent of survey respondents said they would not pursue investment opportunities in Indonesia due to its legal system, and 25 per cent of respondents believed that the prevalence of corruption in the mining industry was enough for them to abandon any investment plans.
"Although 70 per cent of all investment comes from foreign capital, recent policy changes have either knowingly or unwittingly resulted in the marginalisation of foreign investors," said one mining firm executive cited in the report.
The executive was referring to at least two major policy changes: one bans the export of some raw metals in a push to encourage domestic processing and value-added commodities, while a second policy obliges foreign-controlled miners to divest a majority of their shares to local entities.
Indonesia has also been the site of a spate of land disputes involving mining concessions in recent years.
The bad reviews come despite the country's mineral resources potential.
According to the survey, 70 per cent of respondents see Indonesia as a great place to do business assuming that there are no land-use restrictions and that industry best practices are in place. Tito Summa Siahaan