Neo-extractivism is an economic and political model that emerged in several Latin American countries in the 21st century, particularly in Bolivia, Ecuador, and Venezuela. It emphasizes the role of natural resource extraction as a means of generating revenue for social programs and development.
This model advocates for state intervention in the economy, particularly in the management of natural resources. It aims to ensure that the profits generated from the extraction of natural resources are used to benefit the local population, rather than being siphoned off by multinational corporations.
Neo-extractivism has been criticized for its environmental impact, as it often involves the extraction of non-renewable resources, such as oil and gas, which can lead to deforestation, pollution, and other ecological damage. It has also been criticized for perpetuating a dependence on natural resource extraction, rather than diversifying the economy and promoting sustainable development.
Elements of neo-extractivism in Indonesia’s economic and political model.
Indonesia is a resource-rich country, with significant reserves of coal, natural gas, and minerals such as copper and nickel. The government has historically relied heavily on revenue generated from the extractive industries to fund development projects and social programs.
Like other countries with a neo-extractivist model, Indonesia has faced criticism for its environmental impact and its failure to address the long-term economic consequences of relying on finite natural resources. There have also been concerns about corruption and the concentration of power in the hands of a few powerful actors in the extractive industries.
The Omnibus Law, which was passed in 2020, was a sweeping piece of legislation aimed at streamlining regulations and making it easier for businesses to operate in Indonesia. One of the key areas that the law focused on was the extractive industries, with provisions aimed at attracting investment and simplifying the process of obtaining permits for mining and oil and gas exploration.
Critics of the Omnibus Law argue that it prioritizes economic growth over environmental and social concerns, and that it risks exacerbating some of the problems associated with neo-extractivism, such as environmental degradation, social conflict, and human rights abuses. They argue that the law was passed without adequate consultation with affected communities, and that it undermines the rights of workers and indigenous peoples who are often the most vulnerable in extractive industries.
The impact of neo-extractivism on indigenous peoples and their rights to water, land, resources, and self-determination. The extractive industries often involve the forced displacement of indigenous communities, and that they can lead to environmental damage that affects the health and livelihoods of local populations.
Together with IHCS, Sawit Watch, PPNI, Bina Desa and other organizations, KRuHA (People’s Coalition for the Right to Water) is a founding member of KEPAL (Komite Pembela Hak Konstitusional), a coalition that advocates for human rights and social justice. KEPAL and KRuHA have been active in advocating against the Omnibus Law and the PERPU Cipta Kerja.
KRuHA and KEPAL’s advocacy efforts included going through judicial review in the Constitutional Court of Indonesia, and followed up with a constitutional complaint. This ultimately led to a historic decision by the court, which declared that the process and certain provisions of the Omnibus Law were conditionally unconstitutional.
The court’s decision was seen as a significant victory for KRuHA, KEPAL, and other civil society organizations that have been calling for greater protections for peoples’ rights and the environment in the face of increasing pressure to prioritize economic growth and extractive industries.
KRuHA and KEPAL are part of a wider movement of civil society organizations and human rights advocates in Indonesia that are working to promote social and environmental justice, and ensure that the rights of workers, peasant, indigenous peoples, and other marginalized groups are protected in the face of economic development.