Frequently Asked Questions

Why CRU was founded?

The founding of CRU departed from understanding and awareness that land and natural resource conflicts are inevitable from business activities, which are dominated by economic growth-oriented development paradigms. The development model tends to encourage the speed of production with the continuing increase of need for land and raw materials, even though technological innovations continue to be made. As a result, space limitations arise as the population and the consumption demands continue to increase which cannot be balanced by ability of the natural resources to recover.

This triggers competition among development and businesses actors on various production scales which will shift to conflict or dispute, if it is not managed and regulated properly. Conflict harms all parties, regardless of their position and interests. If conflict cannot be controlled, it can interfere and even stop the business and cause losses in the form of social, ecological and economic costs, as well as loss of opportunities for development (opportunity lost).

For this reason, an effort is needed to reduce the risk of conflict and efforts to resolve it as an integral part of improving the management of production and consumption of natural resources. The CRU was initiated by several KADIN leaders as an articulation of commitment and contribution to improve the business and investment climate in Indonesia through conflict management programs, especially those based on land and natural resources.

What is a CRU?

The CRU is an initiative that aims to promote and encourage mediation to be an effective choice for parties involved in conflict in managing land use and natural resources. This goal is pursued through several activities, including (1) handling conflicts to assist those in need. This activity is included in the pilot project of adaptation and development of conflict management methodologies; (2) studies and documentation of cases handled to generate lessons learned that can enrich knowledge as a basis for improving the quality of conflict management services for land use and natural resources; (3) development of capabilities and skills in conflict management through training and mentoring, (4) studies and research on issues that are relevant to the field of managing land use and natural resource conflicts.

CRU vision is to become an independent and leading mediation service facility in Indonesia in providing effective support for resolving land use conflicts and natural resource management.

Why is mediation recommended as the effective choice for conflicts resolution?

Mediation is an approach that is based on values that include voluntary, impartiality, guaranteeing the participation of all interested parties, and upholding the spirit of cooperation, or working together to find common grounds of interest of the parties. This approach allows the disputing parties to be facilitated to formulate solutions to problems that will be set forth in mutually beneficial agreements.

Mediation is carried out to achieve a win-win solution, where efforts are made to find common grounds of interest and needs of the parties so that they can be facilitated towards an acceptable agreement to be carried out by the parties. This approach is different from confrontational ones, such as litigation, which aims to get a win-lose position, or zero-sum position, where the victory or profit of one party will mean defeat for the other party. In this case, time and energy is spent searching for weaknesses and mistakes of others.

Historically, mediation has actually taken root in the lives of Indonesian people with the tradition of deliberation to reach consensus. The government even recommends mediation as a peaceful and appropriate way of resolving disputes and opens broader access to parties to obtain a satisfactory and equitable solution as stipulated in the Supreme Court Regulation No. 1 of 2016.

Why is KADIN initiated CRU?

In Law No. 1 of 1987 concerning the Chamber of Commerce and Industry (KADIN), it was explained that the main role of KADIN was to foster and develop the capabilities, activities and interests of Indonesian entrepreneurs to improve competitiveness. One of the things that hinders business, especially in land-based business sectors, and makes the business climate in Indonesia less competitive are various conflicts; both conflicts between business entity and government agencies, conflicts among business entities, and conflict between companies and community members. That is the reason why KADIN initiated the founding of CRU as its contribution to efforts to improve the business and investment climate. The founding of CRU was carried out as a project which in the future was sought to become an independent facility, which currently is being incubated through the Indonesian Business Council for Sustainable Development (IBCSD).

Why focus on conflicts of land use, natural resources and environment?

Undeniably, the use of land and natural resources is the main capital for the Indonesian economy both at the local and national levels. As previously stated, the growth-oriented development model triggers the high level of land and raw material needs from natural resources, which creates a competitive situation, which if not managed properly can easily shift into a conflict situation.

Natural resource conflicts cause harm to all stakeholders. From a company perspective, conflicts cause financial losses in the form of constraints in production activities or loss of business opportunities. From a community perspective, conflict causes suffering because of losing certainty about the future. From a government perspective, conflict is the cause of the country’s low competitiveness for domestic and foreign investment.

Managing conflicts over land and natural resource use with best practices will minimize the seeds of other conflicts, such as social conflict. Furthermore, land and natural resources are part of the ecosystem, so the problems of land use and natural resources cannot be singled out from broader environmental problems.

How is dispute management practiced?

In many cases, conflict management tends to be carried out in a reactive and unplanned manner. For example, often we hear when a conflict erupts, government officials from agencies that have authority related to the subject matter of the dispute immediately summon and bring together the parties to the dispute and invite them to find solutions through deliberation. But often this step in good faith results in an unacceptable agreement by the parties. This situation is partly due to:

  • There is no genuine intention from the parties to discontinue the conflict. They came and met just to meet the invitation of the official of the authorized agency.
  • Have not yet understood the conflict in question as a whole or even feel they have no conflict.
  • Representatives of the negotiating parties do not represent the interests of the company’s policy makers or the broader interests of the community.
  • There is no or no adequate information.

Therefore, CRU has a mission to promote mediation as an effective approach to resolving conflicts of land and natural resource management, becoming a source of knowledge and information on reliable mediation processes, providing effective and responsive mediation designs, studies and references, providing support for efforts policy and regulatory reform through public policy mediation, and developing a sustainable institutional mediation model. CRU believes that better management of conflict will eventually bring the conflicting parties to an acceptable, actionable and sustainable agreement.

How CRU develops the management of conflicts?

The CRU does not conduct mediation directly, yet facilitates the mediation process based on the agreement of the parties. In general, the mediation process takes place as follows: (1) Initial assessment to determine whether the conflict can be mediated, (2) A thorough assessment of the conflict, including obtaining the consent of the parties; (3) Selection of mediators and preparation of each party; (4) Negotiation meetings; (5) Planning for implementation of the agreements, and finally (6) Implementation of the agreements and joint monitoring.

How can conflict management contribute to reducing deforestation and the global greenhouse effect?

Conflict management must be an integral part of the management of sustainable land use and natural resources. Conflict of land use and natural resources is one of the factors that trigger deforestation and natural resource degradation in several ways, including:

  • Conflict of land use and natural resources is essentially a manifestation of the increasing need for production activities of various parties, which cannot be singled out from efforts to pursue economic growth targets and meet the high dynamics of the consumer goods market, but is not balanced with efforts to improve productivity. As a result, land use tends to be expansive (expansion-oriented) and excludes productivity-oriented efforts. In addition, expansive land use also encourages uncontrolled use of land and natural resources that will erode natural forests, and in turn will trigger competition for land tenure that is easily shifted into a conflict situation.
  • In some specific cases related to the conflict between the company and the community it was reported that the parties had used forest fires as a strategy to deal with conflict. In several other cases it was also reported that local communities lacked incentives to deal with fires when they faced conflict with the company.
  • Conflict reduces incentives for parties to manage land and natural resource use in a sustainable manner. This happens because conflict creates mutual distrust within and between stakeholders. For example, the community feels they have no incentive to look after the forest when they are worried that others will cut down their forests. On the other hand, the company perceives that it is no point to look after its concession area due to fear that other parties will not respect the concession boundaries and use natural resources in the areas they manage.
  • Conflict has a negative impact on the lives of local residents. In some specific cases, when the cultivated lands or forests managed by the community were damaged during the conflict, the community did not have much choice but to open new land by encroaching on natural forests.
  • Land conflicts can hamper projects that support sustainable management of land and natural resources, because it will make it difficult to obtain support and commitment from all stakeholders.
How is the institutional arrangement of CRU?

The CRU is currently a project initiated by KADIN and incubated through IBCSD. In its activities, general supervision regarding the vision and mission of the CRU is carried out through the Steering Committee. Whereas technical supervision regarding the CRU program is carried out through the role of a Technical Advisory Committee.

Stakeholder representatives from government, the private sector, civil society organizations (CSOs), and educational institutions were involved in the CRU Steering Committee and Technical Advisory Committee, to ensure the neutrality of the CRU, maintain service quality, and respect the involvement of all stakeholders with adequate coverage.

How is the position of the CRU among other mediation institutions?

The CRU is basically not an institution that directly provides mediation services. CRU places itself as a mediation service facility in Indonesia that provides effective and reliable support for resolving land and natural resource conflicts.

The mediation process currently carried out by the CRU is in the form of a pilot project of mediation carried out in order to build public trust in the effectiveness of mediation through the development of appropriate methodologies, the development of mediator capabilities, and engagement and outreach.

How conflict management can contribute to improve business and investment climate in Indonesia?

Investors always consider risk factors in each projection of their business profits. Although in general, the risk is enlarged in line with the potential benefits, but if the risk factors are considered too large, not a few investors move their investment to other regions which are considered to have a lower level of risk. One of the risk factors is the potential for conflict because there is no certainty with regards to legal status of the concession.

The absence of land certainty for investors is a risk-prone business. This certainly will hinder business development and ultimately affect the economy. From the perspective of the local community, land certainty is needed to ensure the benefits of investment in their lives.

Awareness to prioritize conflict management as an integrated part of business management, enables conflict resolution as mentioned above to be more efficient and effective. Investors will feel comfortable in running their business and interest in investing will grow. This ultimately has a positive influence on the ease of investing and doing business in Indonesia.