Apart from being threatened with entering the brink of recession, Indonesia is also facing other problems due to Covid-19. In the education sector, following the health protocols, the learning activities must be carried out online during the pandemic, which further demands the widely available of adequate digital infrastructures.
Indonesia is one of the highest technology users in the education sector in the world. Cambridge International in 2018 released that Indonesian students use the most IT/computer rooms (40%) in schools, and the second-highest use of desktop computers (54%), after the United States.
However, there is only about 40% of teachers who are technology ready. The challenges of online learning are increasing because remote or rural areas are lacking smartphones and internet networks.
Meanwhile, limited fiscal capacity makes it impossible for the government to build digital infrastructure evenly in a short time. Efforts to involve the private sector appear to be an option should the country is unlikely to pursue debt financing in strengthening the public services.
Otherwise, Indonesia is threatened with lost generations in some rural areas or at least suffering from a spike in urban-rural education inequality. The country, therefore, may consider shared use of digital infrastructure between extractive industries and rural communities as an additional alternative scheme in dealing with these limitations.
Shared-use infrastructure
The extractive industry, such as mining and oil and gas, always require digital infrastructure to carry out their complex operations on site. The companies must develop their corporate facilities if they operate in remote and underdeveloped areas.
Therefore, the field offices are usually equipped with excellent internet networks. However, the use of this infrastructure is often subject to the exclusive right of the respective companies as it is a part of business investment.
Shared-use is the notion of allowing other parties such as the communities around the extractive project sites to use the company infrastructure, for instance, internet networks.
The availability of internet networks would somewhat benefit rural communities in facing education challenges during the crisis. Due to that, extractive companies that operate in a rural area might extend their internet facilities to the surrounding villages, to provide digital infrastructure to the communities. It will undoubtedly help children to access education and submit assignments, for instance.
Under strict health protocols, extractive companies can also provide particular spaces completed with computer facilities and internet networks in their office complex open for educational purposes. This program may help children access teaching materials, and teachers may take online classes or training for capacity building purposes.
Most importantly, this shared-use scheme does not require government funds or debt financing. The government also does not need to convince the private sector through expensive and lengthy feasibility studies.
What the country needs is a good sense of crisis, political will from the government, and goodwill from the extractive industries. By adopting this initiative, the state can obtain an additional alternative to provide digital infrastructure in resource-rich but underdeveloped villages.
Straighten the CSR objectives
Shared-use digital infrastructure can be integrated with the Corporate Social Responsibility (CSR), which many have misunderstood so far.
Extractive companies often consider CSR as part of their generosity to the community and the environment. Therefore, the industry repeatedly treats CSR as a residual program to allocate a portion of their profits, not as the primary strategic policy to deal with the other stakeholders.
The stuttering government exacerbated this confusion. The government always treat the companies merely as the agents to exploit natural resources and generating mineral revenue as much as possible. Extractive companies have never been positioned as a strategic partner to share responsibilities in accelerating rural social and economic conditions.
The CSR success criteria are only measured by how much funds the company has spent, not by how practical the implementations are.
Some even treat CSR as a matter of money distribution only to smoothen out the resource exploitation and minimize social pressures. A few companies polished this colonial objective in a more modern term: to win the social license to operate.
As a result, CSR funds tend to target pragmatic programs such as different kinds of donations that lead the societies even to be more dependent on the companies. Instead of delivering benefits to the communities, this approach is, in fact, mostly enjoyed by rent-seekers and group elites.
The International Resource Panel of the UNEP in 2020 has also confirmed the failure of social license to operate approach as it depicts the industry’s pragmatic and often fail to be implemented at the national level.
This primitive approach made extractive investments to work identically to drugs effects: creating community dependency while at the same generate addiction to the resource sectors.
In 2018, mineral dependency, as projected by nominal mining contribution to the GDRP showed many resource-rich regions experience high dependence on non-renewable sector. For example, Mimika Regency (85%), East Kutai (81%), Bengkalis (69%), and Kutai Kertanegara (65%).
Kolaka, one of the most historical nickel producers in the country, experiencing appalling developments when almost 50% of its economy depends on mining, whereas this figure ranged from 8-15% only in 15-20 years ago.
These regions are undoubtedly vulnerable considering the nature of mineral as non-renewable. Extractive sectors eliminated economic independence and put local people exposed to economic turmoil and pressures on global commodity prices.
When the extractive activities halted, which could be anytime, the regional economy would immediately paralyze as a result of losing its primary support in a split second.
Resource governance reform
The extractive industry governance in the country has been misguided. Investments that expected to contribute to the national economy have led to false growth symptoms.
The Covid-19 pandemic should be the momentum to restructure it. It is now the time for industry and government to escape from the trap of past perspectives.
Shared-use of digital technology infrastructure is just an example of how extractive industries can leverage the local communities. On a broader scale, shared-use may target other corporate infrastructure and help the societies to access financial assistance, logistics, and markets for their economic activities. By doing so, the CSR programs could generate more independent with the diversified local economy.
The shared-use is a way to help unlock the social and economic potential to give birth to competitive rural societies and build comparative advantages. This policy can be considered as the trade-off for community acceptance and government permission on extractive project developments.
From the business perspective, shared-use not only can reinforce the company brand and enhance the corporate image but also may strengthen the stakeholder engagement, especially with the community and local government. It is an essential measure to embody of socially responsible investment principle with the ultimate goal of sustainability.
