Frequently Asked Questions

What is the background of the Conflict Resolution Unit (CRU) initiative?

The CRU initiative started from the understanding and awareness that conflicts over land and natural resources are unavoidable in business activities, which are dominated by an economic growth-oriented development paradigm. This development model tends to encourage production by expanding land in order to meet the increasing demand for raw materials in addition to technological innovations. This has resulted in an raising competition over land which is also triggered by an increase in population and increasing consumption demands. Another consequence of this intensive exploitation is environmental degradation which happens when the level of natural damage that occurred cannot be compensated by nature’s ability to recover.

This competition triggers rivalry among development actors and businesses at various production scales which if not managed and regulated properly have the potential to become conflicts or disputes. Conflicts are detrimental to all parties, regardless of their position and interests. If they cannot be controlled, conflicts will disrupt and even stop businesses and cause losses in the form of social, ecological and economic costs, as well as the loss of opportunities for the development of the business itself in the future.

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

Why mediation can be an effective option in dealing with conflicts and disputes?

Mediation is an approach that is based on the values of volunteerism, impartiality, neutrality, openness, guaranteeing the participation of all interested parties, and upholding the spirit of cooperation in finding common ground of the interests of the parties. This approach allows the conflicting parties to be facilitated in formulating a solution as a mutually beneficial agreement.

Mediation is carried out to identify a common ground as a basis for integrating the interests of the parties in an agreement that is a “win-win solution and thus acceptable to be implemented by the parties. This approach is different from the confrontational approach, such as litigation, which starts from an assessment of whether or not one party’s claim is right. Because it only aims to reach a “win-lose” solution, the result is always zero-sum, where the victory or amount of profit of one party is as large as the loss of the other party. Hence, here time and energy are spent looking for the weaknesses and faults of the other party.

Historically, mediation has actually deep roots in the lives of Indonesian people with a tradition of musyawarah untuk mufakat (deliberation to reach consensus). The government even recommends mediation as an appropriate and effective way of peaceful dispute resolution and opens wider access to the parties to obtain a satisfactory and fair settlement, as has been regulated by the Supreme Court’s Regulation No. 1 of 2016.

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 did KADIN initiate CRU?

In Law Number 1 of 1987 concerning the Chamber of Commerce and Industry (KADIN), it is explained that the main role of KADIN is to foster and develop the capabilities, activities, and interests of Indonesian entrepreneurs to increase competitiveness. One of the limitations that constrains business, especially in the land-based business sector, and makes the business climate in Indonesia less competitive are various conflicts; both conflicts between business entities and government agencies, disputes between business entities, and disputes between companies and communities. For this reason, KADIN initiated the establishment of the CRU as the organization’s contribution to efforts to improve the business and investment climate. The establishment of the CRU was carried out as a project which in the future will be sought to become an independent facility, which is currently being incubated through the Indonesian Business Council for Sustainable Development (IBCSD).

Why focus on land conflicts and natural wealth management?

In Indonesia the utilization of land and natural resources is still the main driver of the economy. In practice, the use of land and natural resources is often driven by a development model oriented towards economic growth which triggers a high demand for land and raw materials from natural resources, thus creating a competitive situation, which if not managed, can easily give raise to a myriad of conflicts. Complaints about conflicts related to land and natural resources continue to increase over time even though conflict resolution initiatives from the Government and other parties are continuously being carried out.

On the other hand, conflicts over land and natural resources are causing losses to all parties. Not only losses in the form of uncertainty about the future (due to conflict), financial losses but also conflicts are causing the country’s competitiveness for domestic and foreign investment to decline.

The escalation of conflicts over land and natural resources can also easily transform into social conflicts. Management of land and natural resources conflicts with best practices will minimize the seeds of other conflicts and also help national goals for equitable and sustainable development.

How is conflict management in practice being done?

In many cases, conflict management tends to be carried out in a reactive and unplanned manner. For example, we often hear that when a dispute erupts, government officials from agencies that have the authority related to the subject of the dispute immediately summon and bring together the disputing parties and invite them to seek solutions through deliberation. But often these good intentions result in an agreement that is unacceptable to the parties. This situation is caused, among others, by:

  • The parties have no serious intention to end the conflict as yet. They are attending the conflict resolution process merely to fulfill the invitation of the authorized agency official.
  • The parties do not fully understand the conflict experienced or even in some cases, feel that they do not have a conflict.
  • Representatives of the negotiating parties do not actually represent the interests of policy makers, the company’s, the communities, or the wider interests of society.
  • There no adequate information available as a basis for designing the best possible solution in the reality of the conflict context at the time.

To reduce and avoid these conditions, CRU seeks to utilize rational and systematic methods of conflict resolution which include, among others, (1) building cooperative relationships between the parties, (2) studies to build an adequate information base to understand the conflict and its context. properly and identify effective alternative solutions, (3) design and guide cooperation between conflicting parties, usually through negotiation and joint planning. In the realm of conflict resolution methodology, this method is called “mediated negotiation”, or often just “mediation”. Better conflict management will ultimately bring the conflicting parties to an acceptable, actionable and sustainable agreement.

How does CRU manage the conflict cases it handles?

Each case referred to CRU is reviewed to assess the suitability of the case for mediation. For this reason, CRU has developed a system for tracking the conflict resolution process. A case tracking system helps to make the decision-making and assessment process more efficient and effective, especially to ensure the commitment of the parties to resolve the conflict. The decision-making process in the conflict management process carried out by the CRU is illustrated in the chart below.

The CRU facilitates the mediation process based on the consent of the parties to the conflict. Because every conflict is different, whether the parties, the issues of the conflict, or the context, there is no standard way of resolving conflicts, but in general the mediation process includes the following: (1) Initial assessment to determine whether the conflict can be mediated, (2) A comprehensive study of the conflict, including obtaining the consent of the parties to the conflict; (3) Selection of mediator and preparation of each party; (4) Negotiation meeting; (5) Planning the implementation of the agreement, and finally (6) Implementation of the planned agreement and joint monitoring.

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

Conflicts over land and natural resources are one of the triggers for deforestation and degradation of natural resources. When a conflict occurs, mutual distrust arises between the parties and/or stakeholders. As a result, the occurrence of unresolved conflicts reduces the incentives for the parties to properly manage land use and natural resources in a sustainable manner. For example, communities may feel they have no incentive to protect their forests when they are worried that others will cut down their forests. On the other hand, the company does not feel the need to protect its concession area because it is worried that other parties will not respect the boundaries of the concession area and use natural resources in the area they manage.

Furthermore, unmanaged conflicts can escalate into larger conflicts and manifest in destructive actions as a ploy by the parties to show their position. Actions such as land burning, detention of individuals, encroachment and destruction of plantations are examples of manifestations of conflict that can occur. Conflict events like this will make it difficult to get support and commitment from all stakeholders for projects that support sustainable management of land and natural resources. Therefore, conflict management is an inseparable part of the concept of sustainable land and natural resource management.

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 can conflict management contribute to improving the business and investment climate in Indonesia?

Investors always consider risk factors in every projected profit of their business. Although in general, the risk increases in line with the potential profit, but if the risk factor is considered too large, not a few investors shift their investment to other areas, which are considered to have a lower level of risk. One of these risk factors is the potential for conflict because there is no certainty of land status. The absence of land certainty for investors is a vulnerable condition that becomes a risk in doing business. This will certainly hamper business development and ultimately affect the wheels of the economy. From the local community’s perspective, land security is needed to ensure the benefits of the investment on their livelihoods.

Awareness to make conflict management an integrated part of business management, will make it possible for 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 will ultimately have a positive impact on the business climate in Indonesia.