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cNewmont Mining in Indonesia:

Newmont mining Corp. is the second biggest gold producer in the world. Based in Denver,
Colorado, the company has its mining operations stretched across the globe. In 1996, Newmont
mining started their operations in two islands of Indonesia- Batu Hijau on the island of Sumbawa
and Minahasa Raya on the island of Sulawesi. After facing political and legal turmoil, illegal
miners, environmental protests and decreasing gold reserves the company decided to stop their
operations in Minahasa Raya in the year 2003.

To understand the nature of incidents that caused the shutdown of the gold mine in Minahasa
Raya it is essential to have a brief idea about the political history of Indonesia.

olitical History of Indonesia:

Republic of Indonesia is a country in Southeast Asia and Oceania. Indonesia comprises of


around 17,000 islands with a population of nearly 210 million people. It is the fourth most
populous country, and has the largest population of Muslims. Indonesia is a republic with an
elected legislature and president. The nation¶s capital Jakarta is located in the Island of Java
where 60 % of the total population resides. The per capita income is $570 with a high
unemployment rate of 15% to 20%.

Following a three and a half centuries of Dutch colonialism before the world war two Indonesia
was known as the Dutch East Indies. The Japanese invasion during world war two ended the
Dutch rule, and encouraged the suppressed Indonesian independence movement. Early in world
war two the Netherlands was occupied by the Nazi Germany, the Dutch East Indies declared a
state of siege, and the final Dutch forces were defeated by Japan in 1942. The Japanese invasion
continued for 3 years. During this time and prior to the Japanese invasion, independence
movements by many Indonesian nationalist began forming. The Indonesian Nationalist party led
by Ahmed Sukarno claimed Indonesian independence on the 17th August 1945 after the Japanese
surrender to the Allied forces during the world war two. Ever since the independence Indonesia¶s
history has been turbulent, with challenges posed by natural disasters, corruption, separatism,
periods of rapid economic change and democratization process. The current nation of Indonesia
is a unitary presidential republic consisting of thirty three provinces.

Ahmed Sukarno emerged as the country¶s first president and established his authoritarian regime
by labeling it as Guided Democracy. In the mid 1960s a failed coup begun by the Communist
party of Indonesia (PKI) resulted in a violent anti communist purge, during which the PKI was
effectively destroyed by the army led by chief of staff General Suharto. In this rampage between
500,000 to one million people were killed as suspected communists.

The head of military General Suharto, outmaneuvered the politically weakened Sukarno, and was
formally appointed as president in March 1968. His µNew order administration¶ was supported
by the US government, and encouraged foreign direct investment in Indonesia, which was a
major factor in the subsequent three decades of substantial economic growth. However the
authoritarian µNew order¶ was widely accused of corruption and suppression of political
opposition.

Indonesia was hardest hit by the 1997 Asian financial crisis. The flawed economic structure and
corruption devastated the country and was hit with 80% inflation at one point. The economy
contracted 14%, this increased popular discontent with the µnew order¶ and led to popular protest
across the country. Demonstrations of conflict arose between Christians and Muslims,
companies owned by ethnic Chinese or companies with Chinese management suffered serious
property damages. Protesters and rioters demanded Suharto¶s resignation and eventually in 21
May 1998 General Suharto resigned after 32 years of ruling the country.