Preliminary Study on the Community Development in the Mining Industry in Indonesia

Abstract

Community development (CD) in Indonesia’s mining industry is a newly enforced concept with strict government regulations on programs and minimum expenses. This paper explores the complexity of CD, covering its history, regulations, global comparisons, and future developments.CD was first introduced in Law No. 4/2009 on Mineral and Coal Mining and has since evolved. The government now mandates eight pillars in CD programs:education; (2) health; (3) employment and income levels; (4) economic independence; (5) social and cultural aspects; (6) local participation in mining management; (7) institutional support for CD; and (8) supporting infrastructure. These programs must align with regional blueprints.A key issue is determining the minimum CD expenditure for mining companies, balancing community benefits with industry attractiveness. While CD aims to improve local welfare, its rigid requirements challenge both companies and the government. Striking a balance between community needs and investor expectations remains a crucial and evolving challenge.