Indonesia Scores High in Extractive Industry Transparency

TEMPO.CO, Jakarta - Indonesia received above average grades in its extractive industry governance, according to a just released Resource Governance Index (RGI), which measures the quality of governance in the oil, gas and mining industries.

The RGI, compiled by the New York-based Revenue Watch Institute, supported by the Ford Foundation, measured 58 countries worldwide, 10 of them in the Asia-Pacific region.  The RGI assessed the oil and gas sectors in Cambodia, China, Indonesia, Malaysia and the mining sector in Mongolia, Myanmar, Papua Nugini, the Philippines and Vietnam.

To determine how each country performs, the RGI looked at four key areas of transparency and accountability.  They are institutional and legal setting (the degree to which laws, regulations and institutional arrangements facilitate transparency, accountability and open, fair competition), reporting practices, safeguards and quality controls and enabling environment.  This last factor covers the broader governance environment, based on more than 30 external measures of accountability, government effectiveness, rule of law, corruption and democracy.

The top score achieved by Indonesia, second only to Timor Leste among the Asia-Pacific region suggests a significant progress toward a well-governed and accountable resource sector, which account for an average of 25 percent of total exports and 34 percent of government income in 2006-2011.

However, compared globally, the East Asia and Pacific region as a whole performs poorly, according to the RGI, scoring 44 out of 100, compared to the Index's global average of 51.  A more detailed report of the Resource Governance Index, including the methodology and 58 country profiles, can be found at www.revenuewatch.org/rgi.