Identification of Target Baseline Data: Responding to [Anticipated] Positive Impacts

As a major source of regional economic investment, local stakeholders expect the communities near to the client to garner significant positive change from the Project. Some common expectations of a regional extractive industries investment project are:

• public sector revenues from taxes and royalties
• improved local training and skills development opportunities
• increased local skills base
• increased local labor pool
• employment creation for skilled, semi-skilled and unskilled workers
• improved local wage and income levels (including opportunities for local sourcing and higher prices obtainable for local products)
• new business development opportunities
• expanded livelihood opportunities
• improved housing, water and sanitation
• improved communications infrastructure
• improved access to, and expansion of, public infrastructure, services and utilities
• coordination and alignment of the project to existing national and provincial level health programs, (e.g., TB, HIV/AIDS), and future development plans

Although not all local expectations will be merited by the actual project plans and commitments, the client will invest in economic and social development initiatives in local communities as part of both contractual agreements with the Government of Indonesia as well as in line with a project commitment to sustainable development. Client regional and local investment is expected to contribute to increased links between local, regional, national, and even international economies. Community members throughout the region, and especially those communities near to the project LSB, are likely to realize increased accessibility and availability of goods and services and deepening economic integration. Local government authorities are likely to realize increased political power as well as increased responsibility for providing and maintaining adequate social services (health, education, waste management, electricity, water supplies, telecommunications, road systems, etc.).

To adequately monitor how the project is benefiting local community stakeholders and achieving its self-defined sustainable investment targets, the project will collect data for cross-section of indicators of potential direct and indirect impacts. To effectively measure project performance, these indicators will need to be monitored and evaluated over time.

Identification of Target Baseline Data: Responding to [Potential] Negative Impacts

Potential impacts associated with the client will most likely be indirect–resulting especially from potential in-migration of ‘opportunity seekers’ into local communities near to the LSB base.

Potential impacts to local infrastructure, services and utilities deriving from project-induced in-migration include:

• increased use of existing roads and transportation systems
• increased pressure on education and health services and infrastructure
• increased pressure on waste management systems
• increased demand for electricity, water supplies, and sanitation
• increased demand on communications networks
• increased demand for housing
• increased use of/demand for community, religious, and recreational facilities
• unplanned and uncontrolled development of squatter settlements

Consequent negative (indirect) impacts of the client to local economies, livelihood strategies of affected communities, and health contexts might thus be:

• increased poverty deriving from increased cost of living (inflation in costs of land, food, fuel and housing)
• increased indebtedness
• increased economic vulnerability for marginal groups (women, elderly, disabled, etc.)
• increased dependence on cash-based economy to meet needs
• reduced influence of traditional beliefs and knowledge
• loss of cultural heritage
• economic displacement derived from increased competition for economic resources and employment (e.g., loss of productive land to urban settlement, increased demand for housing and higher property prices)
• deterioration of local subsistence production systems (e.g., ecosystem services)
• changes in nutritional status
• proliferation of communicable diseases (including sexually transmitted infections, respiratory infections, waterborne diseases)
• inadequate public hygiene facilities
• increased incidence of accidents and fatalities, such as may be associated with project traffic or other hazards (e.g., spills and releases)
• increased air and marine traffic
• increased exposure to potentially hazardous materials (road dust; air pollution related to industrial activity, vehicles, cooking, heating, or other forms of combustion/ incineration; landfill refuse or incineration ash; effects of other project-related solvents, paints, oils)
• insufficient number of health centers, staff and medical supplies (e.g., inadequate staffing levels and competencies, or technical capabilities of health care facilities)
• loss of indigenous medicines and unique cultural health practices
• reduced public safety during construction
• increased violence and security concerns related to psychosocial impacts (manifested via substance misuse and abuse of drugs, alcohol, smoking; depression and changes to social cohesion, etc.)

Example indicators that the project is inducing negative impacts on local communities:

• increased food scarcity
• diminishing affordability of housing and/or construction materials
• increasing indebtedness
• increasing disease epidemics
• increasing occurrence and practice of social vices
• increasing domestic violence and rape
• intra- and inter- group jealousy
• rising crime and violence
• heightening or changing ethnic tensions
• breakdown of law and order
• increasing probability of public security force intervention
• increasing prevalence of sex workers
• changing prevalence of entrepreneurs (new businesses)
• increasing prevalence of predatory / informal money lenders
• price inflation

Identification of Target Baseline Data: Accounting and Evaluating for Project-Induced Change

It is also important to bear in mind that the ramifications of project-induced impacts to local communities are rarely clear in advance. It is therefore important to measure socio-economic changes that may have either ‘positive’ and ‘negative’ ramifications for project-affected people and communities. For example, consider the potential for the following changes to have both positive and negative ramifications for different stakeholder groups and population sub-sets:

• monetization of remote rural economies, improving purchasing power and increasing trade
• changing local and regional business development opportunities
• opportunities to build community organizational structures
• increased individual, household, and community empowerment stemming from increased income and wealth
• increased attention and input by government authorities, NGOs, etc.
• increased local tax revenue levels
• changing role of traditional medical providers

A comprehensive and robust baseline survey framework must therefore take into account the need to monitor a variety of socio-economic contexts in order to anticipate and evaluate the potential for unintended direct and indirect impacts.