THE EVOLUTION OF INDONESIAN HARD-MINERAL AGREEMENTS, 1967–1977

This article traces the evolution of contractual terms for hard minerals agreements in Indonesia over the period 1967–1977. It shows that, with some important exceptions, the Indonesian experience has been more or less consonant with that of other developing countries that are mineral exporters. Virtually everywhere, contract terms, particularly fiscal provisions, have been considerably tightened as host countries gained experience in negotiating and implementing hard mineral agreements. As a result, recent contracts involve measurably greater benefits for host countries than was generally the case in the 1960s. For a variety of reasons discussed in the article, the evolution to tighter contracts and more favourable terms was rapid in Indonesia. The article also demonstrates the essential equivalence between the two most prevalent forms of mineral agreements: the production-sharing contract and the contract of work. In particular, and contrary to widespread belief, the article shows, using Indonesian examples, that a contract of work can be made to match production-sharing agreements in its financial results. Le présent article retrace l'évolution des clauses contractuelles des accords sur les minéraux solides en Indonésie pour la période 1967–1977. Il montre que, à quelques exceptions importantes près, l'expérience faite par I'lndonésie dans ce domaine est fort proche de celle d'autres pays en développement exportateurs de minéraux. On assiste presque partout à un resserrement considerable des clauses contractuelles et, en particulier, des dispositions fiscales au moment où les pays hôtes acquièrent de l'experience en matière de négociations et d'exécution des accords sur les minéraux solides. En conséquence, les récents contracts ont apporté des bénéfices bien plus appréciables aux pays nôtes qu'ils ne l'ont fait généralement dans les années 60. Pour de multiples raisons exposées dans cet article, l'évolution de contrats plus stricts et de clauses plus favorables s'est avérée rapide en Indonésie. Cet article démontre également l'équivalence essentielle qui existe entre les deux formes les plus courantes d'accords sur les minéraux: des contrats de partage de la production et des contrats de travail. En particulier, et contrairement à ce que l'on pense généralement, cet article, par le biais d'exemples indonésiens, prouve qu'un contrat de travail peut s'harmoniser avec des accords de partage de la production quant à ses résultats financiers. Este artículo examina la evolución de los términos contractuales de los acuerdos sobre minerales en Indonesia durante el periodo 1967–1977. Este exámen muestra que, con algunas excepciones importantes, la experiencia de Indonesia ha sido similar a la de otros países en desarrollo exportadores de minerales. Casi en todas partes los términos contractuales, especialmente las provisiones fiscales, han tendido a ser restrictivas a medida que los países exportadores han ido adquiriendo experiencia en las negociaciones y ejecución de contratos sobre minerales. En consecuencia, los contratos recientes representan mejores beneficios para el país exportador en comparación a lo que sucedía en la década del sesenta. Debido a diferentes razones que se discuten en este artículo, la evolución hacia contratos más restrictivos y términos más favorables fué muy rápida en Indonesia. Este artículo también demuestra la equivalencia esencial entre las dos formas prevalentes de contratos sobre minerales: contratos de participación en la producción y contratos de trabajo. En especial, y contrariamente a la creencia general, el artículo muestra, usando el ejemplo de Indonesia, que el contrato de trabajo puede adecuarse de modo a obtener los mismos resultados financieros obtenibles con contratos de participación en la producción.     

Change in vegetation cover in East Timor, 1989–1999

Forest resources play a key role and provide many basic needs to communities in developing economies. To assess the patterns of vegetation cover change, as a corollary of resource utilization, satellite imagery, ground truth data, and image processing techniques can be useful. This article is concerned with identifying change in major vegetation types in East Timor between 1989 and 1999, using Landsat Thematic Mapper data. The results highlight a significant level of deforestation and decline in foliage cover. All major vegetation cover types declined from 1989 to 1999, and there was a sizeable increase in degraded woodlands. This decline has had considerable impact on the livelihoods of rural and urban communities. Causes for these changes include: economic exploitation of abundant resources; and implications of transmigration policies implemented during Indonesian rule, resulting in increased competition for land and woodland resources. As the new nation of Timor‐Leste establishes itself, it must consider its current stock and distribution of natural capital to ensure that development efforts are geared towards sustainable outcomes. Without the knowledge of historical patterns of resource consumption, development efforts may, unwittingly, lead to continuing decline in forest resources.     

International oil market – new directions

This article focuses on changes in the international petroleum industry during the past 20 years and examines some major trends, especially since the oil price collapse of 1986. The resumption of rapid increases in oil demand since 1986 in the developed market economies and the developing world has already led to a pronounced production shift to OPEC member countries where output increased by 6.6 million barrels per day or, 37% since 1985. Cutbacks in petroleum investments in non-OPEC countries are likely to result in even more dependence on the vast proved oil reserves of OPEC. However, the gap between peak output and sustainable production capacities in OPEC has narrowed and there is an urgent need for sizeable investments to expand capacities. Such investment programmes are already being implemented by transnational oil corporations in countries such as Indonesia and Nigeria where the companies had retained equity participation. In other countries such as Iraq and Venezuela where oil operations had been nationalized, transnational oil corporations are being invited to participate in new arrangements for oil production. New arrangements are also being considered in Eastern Europe and the USSR. New understandings, dialogue and cooperation between oil-consuming and producing countries will be necessary for the security of investments, supplies and markets in this process. The unanswered question is whether such cooperation can be achieved in time in order to avoid yet another energy crisis.     

A GEOGRAPHICAL ANALYSIS OF WATER-RELATED CONSTITUTIONAL AMENDMENTS IN TEXAS, 1985–19911

ABSTRACT: Texans participate directly in water policy decision-making through a referendum process involving amendment of the state's constitution. Prior to 1985, Texans voted on eight amendments. Five of these were ratified (1957, 1962, 1966, 1971, 1976), and collectively resulted in the creation of the Water Development Fund, with an authorization level of $600 million, and the Texas Water Development Board, the organization charged with administering the fund. Three other amendments were defeated in 1969, 1976, and 1981 by ever-increasing margins. From 1985 to 1991, six additional amendments were proposed and subsequently ratified, resulting in a $1.8 billion increase in Water Development Fund authorization and the creation of an agricultural water conservation fund and bond insurance program. County-level electoral data for the 1985–1991 referenda were mapped to assess sectional and regional factors underlying public opinion regarding these water resource development and funding programs. Regional contrasts were most pronounced for the 1989 and 1991 referenda that targeted economically distressed areas across the state, particularly the colonias located along the Rio Grande, and the 1989 amendment that removed a time limit on the issuance of agricultural water conservation bonds. As a specific case study, the Texas experience could serve as a guide in California where similar constitutional restrictions require tax and spending programs to be approved by voters, and in other states that may be considering the development of similar state-level financial programs for water projects.     

World diamond industry: 1970–2000

The diamond cartel has remained effective in controlling diamond supplies and prices for a longer period than any other major minerals cartel in the twentieth century. This paper examines the diamond pipeline from mine to the jewellery market. Particular attention is given to the characteristics of diamonds and of the industry structure that make the long-term stability of the cartel possible. The strategies of De Beers Consolidated Diamond Mines in controlling rough gem supplies and prices are examined, and projections are made to 2000. The paper shows that in spite of a projected decrease in the share of total diamond production sold through the De Beers' cartel in the 1990s, the cartel is expected to continue effectively to control supplies and prices.     

China's Minerals Future: 1985–2005

China has embarked on major economic and social changes to revitalize the Chinese economy, increase labor productivity, and improve the material standard of living of the Chinese people. This paper assumes that China will achieve its goal of a per capita income of US$800 in 2000, open-door policies will be maintained, and nonfuel mineral commodity consumption will increase as GDP per capita increases. Projections are made of production, trade and consumption of 14 nonfuel minerals for the period 1985–2005. China is projected to increase its net imports to these 14 minerals from about US$5000 million in 1985 to about US$12000 million in constant dollars in 2005. China's investment climate will become more favorable for those multinational companies that bring with them clear comparative advantages in minerals exploration, mining and processing technologies and marketing, and are prepared to develop in-depth Chinese expertise.     

Copper Investment Policy in Chile 1973–1984

The present Government of Chile has retained under state ownership the large-scale copper mines nationalized by the Allende Government in 1971. At the same time it has pledged itself to open fully the Chilean economy to the free play of national and international market forces and to this end has elected to expand Chilean copper production by using foreign capital. The financial regimes created by the Government to attract such investment are described. Although the investment terms have been generous, the Government has not been as successful in attracting as much foreign investment as it had hoped. It is suggested that the Government could expand copper production more efficiently and at less cost to the nation by investing in the state-owned copper industry.