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Legal effectiveness of business contracts in tin mining: Socio-legal and governance challenges in corporate–community relations in Indonesia

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  • Rahayu, Derita Prapti
  • Rustamaji, Muhammad
  • Faisal, Faisal
  • Sari, Rafiqa

Abstract

The governance of mineral resources in developing economies often reveals tensions between formal legal frameworks and informal extraction practices. Indonesia’s tin sector exemplifies this dynamic within broader global debates on artisanal and small-scale mining (ASM) formalization and contractual governance. Despite successive legal reforms, including the 2020 and 2025 Mineral and Coal Law amendments, community-based mining remains weakly regulated. In this context, private contracts between mining firms and artisanal miners have emerged as the primary cooperation mechanism, yet their legal effectiveness and fairness remain uncertain. Using a normative–empirical socio-legal method, this study integrates doctrinal interpretation with field data from five tin-producing districts in Bangka and Belitung to examine how contracts are negotiated, enforced, and experienced. The analysis, guided by Friedman’s legal-effectiveness framework, contractual-justice principles, and legal pluralism, identifies four persistent challenges: (1) bargaining asymmetries favoring corporations; (2) limited legal literacy among miners; (3) fragmented oversight; and (4) absence of sustainability and safety clauses. The findings show that informal norms fill governance gaps but fail to ensure substantive fairness or enforceability. Policy reform should promote transparent and standardized contracts, community legal empowerment, and mandatory environmental and social safeguards to strengthen equitable extractive governance in Indonesia and comparable contexts.

Suggested Citation

  • Rahayu, Derita Prapti & Rustamaji, Muhammad & Faisal, Faisal & Sari, Rafiqa, 2025. "Legal effectiveness of business contracts in tin mining: Socio-legal and governance challenges in corporate–community relations in Indonesia," Resources Policy, Elsevier, vol. 111(C).
    • Handle: RePEc:eee:jrpoli:v:111:y:2025:i:c:s0301420725003095
    DOI: 10.1016/j.resourpol.2025.105767
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    References listed on IDEAS

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    1. Spiegel, Samuel J., 2012. "Governance Institutions, Resource Rights Regimes, and the Informal Mining Sector: Regulatory Complexities in Indonesia," World Development, Elsevier, vol. 40(1), pages 189-205.
    2. Dinah Rajak, 2016. "Hope and Betrayal on the Platinum Belt: Responsibility, Violence and Corporate Power in South Africa," Journal of Southern African Studies, Taylor & Francis Journals, vol. 42(5), pages 929-946, September.
    3. Nurul Listiyani & M. Yasir Said & Afif Khalid, 2023. "Strengthening Reclamation Obligation through Mining Law Reform: Indonesian Experience," Resources, MDPI, vol. 12(5), pages 1-14, April.
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