“who should enforce the law and how?”

Tensions in the Mentawai Surf Resort and Charter Boat industry have been high recently, following the confrontation at Macronis in early August.

The surf charter vessel, Addiction, anchored at the break in violation of the law dictating that no more than two boats at a time may do so. A group of Macaroni locals challenged the vessel at anchor as per the video.

You can read the Macaroni resort’s commentary directed to boat operators here.

Background on the Law in question is avaliable here.

Check out the commentary on the issue  from a broad spectrum of stakeholders, apart from the locals of course, who have come out of this so far looking like violent hotheads taking the video as the only guide.

Stakeholders met to discuss the issues at the Hotel Aliga, Padang, on August 30, 2012.

Cristie Carter from the Wavepark Surf Resort was the first to open a land-based surf tourism camp in Mentawai. Here is his detailed suggestion on how to move ahead.

Proposal for Mentawai Regulation Revision

Christie Carter

Padang, September 1, 2012

Contents:

1)      Introduction, “What has gone wrong?”

2)      Joint Resort/Investor/Boat Association requirements

3)      Joint Resort/Investor/Boat Association benefits

4)      Resort regulation and enforcement introduction

5)      Resort regulation and enforcement methods

6)      Boat regulation and enforcement recommendations

7)      Boat regulation and enforcement methods

8)      How does it work?

9)      Administration of the forum

10)   Enforcement of the regulations

11)   Fines levied

12)   Conflict management

13)   Questions to be answered by Pemda Mentawai

Introduction

The Mentawai Islands is a very special place for me, but in the last 5 years, I’ve seen a change that breaks my heart.  It is difficult to believe that such a special place will end up the same as other places that I despise, but that is where it is headed. Thankfully, the Mentawai government has asked for my input into how I see things working out.

• Who should be able to benefit from the resources that are naturally in abundance?
• Who should enforce the laws, and how?
• Where will the local communities derive their benefits and development from, as revenue is generated from the industry?  How is it possible to anticipate and prevent conflict between parties with competing businesses?

There is a way to do all of this fairly with a benefit for all.  This is my attempt.

“What has gone wrong”? can be answered simply.

No law (PERDA or other) has ever been enforced.  The more important question, is WHY has there been no enforcement?  This can also be simply answered with an undisputed fact:

There is no incentive for the Mentawai government to enforce their laws.

What I have come to realize is that at all levels, government employees are paid from a giant slush fund which is subsidized by the central government in Jakarta.  Mentawai does not need tax revenue in order to operate, therefore government employees do not need to perform in order to receive their wages.

This simple principle is compounded by the difficulty and expense of logistics and transport in the island chain.  Try to find the answer to this simple question: Why would any government employees leave their comfortable, safe office to go into the field?  In Mentawai the field is rife with bad weather, wet boats, long crossings, bad fuel, poor engine maintenance and lack of spare parts, poverty stricken villages with hyper endemic malaria and seriously lacking in sanitation.

If I put myself in their shoes, not only is there no incentive to leave the office, but there is a disincentive to go in the field and enforce anything.

The next question is, what can be done to incentivize and safeguard the government employees so that they do their job and enforce the regulations?

Joint Forum Requirements for Stakeholders

In order to have one voice on the subject of regulation and enforcement, it has been decided that stakeholders should try and band together.  What are the requirements of being a stakeholder?

1)      Stakeholder must be, or represent the owner of a boat, resort or homestay that is legally operating in the Mentawai islands.  This means that the association is a kind of “investors forum”, which includes those stakeholders who are invested in the outcome of development in the Mentawais Islands.  Employees may represent their bosses, but votes in the forum are one vote per guest allowance according to the regulations as a legally operating entity.  So WavePark is allowed 18 guests according to the regulations?  We get 18 votes.  Ferry has 3 boats that all take 8 guests each, he gets 24 votes.

2)      “Legally operating” requires certain prerequisites to be met.  For me, this is one of the biggest questions that should be answered before anything is negotiated.  What are the prerequisites in order to be considered legally operating in West Sumatra** (see appendix)?   Surely this question is answered from a law-based perspective and is objectively so.  There can be no room for manipulation or “special cases” in regards to this.  The law is the law.

3)      There must be a guest registration and enforcement fee payable by all stakeholders to ensure efficient administration of the Forum, payment of government taxes, and for community charity benefits which are agreed upon by the forum.  This should be as a “per guest” fee, which keeps it fair for stakeholders both large and small.  I’m imagining this to be around $20 / guest / day.  This will be covered in later detail.

4)      The stakeholders must be willing to trust the forum with some of their clients’ personal information, and must make that clear to those clients.  Data should include:

Date of Birth

Full Name in passport

Nationality

Passport number

Resort or Charter Boat Booking dates.

5)      This data will be used as a basis for disaster planning and management, police and conflict reporting, socio-economic planning, tax and revenue collection, as well as a basis for paying administrative fees to the forum.  Please see “How does it work?” below this.

6)      Stakeholders are also responsible to fulfill certain safety regulations, according to whether they are a charter boat or resort.  This is also covered in more detail later.

Joint Forum Benefits for Stakeholders

By joining the forum and paying the fees, Stakeholders can look forward to the following benefits:

1)      The security and assurance that their business interests are being protected by those who receive benefit from the taxes and charity being paid.  There will be no more illegal businesses operating in the Mentawai islands, and the sustainability of the industry will be assured.

2)      A clear method and location for reporting system abnormalities, illegal activities, a formal medic network, disaster coordination.  Also a business to government mediation and consultation service including dissemination of new regulations and notices given by government parties with interest in the Forum.

3)      The stakeholders will also gain many benefits which aren’t apparent in the beginning, but may present opportunities in the future.  This may come in the form of economic benefits by negotiating terms of service provided to the Forum.  This could include fuel, food and transport services supplying contracts with providers who tender such contracts to the Forum.

4)      A clear system for distribution of charity to communities in a fair, consistent and transparent method, as agreed upon by stakeholders.

5)      The stakeholders will gain benefit from a clear system of taxation or retribution to the Mentawai government on a per guest basis.  This agreement will be negotiated between the Forum and the government, and the tax reporting will be administrated by the Forum, with receipts and reports delivered to the stakeholder in a quarterly, private report.

6)      The stakeholders will benefit from access to employees (as guides etc.) who have achieved minimum levels of education and training (eg: surf guide training).

Resort Regulation and Enforcement Introduction

There is ALREADY a legal infrastructure in place to license land-based businesses that accommodate tourists.  After all, Indonesia as a country is an archipelago, much the same as Mentawai is an archipelago.  This existing Indonesian law should be researched and presented to the forum AND the government as a basis for moving ahead with new regulations specific for Mentawai.

As I’ve said before: If you want to invent a new medicine, make sure there’s not one that will already do the job.

There are certain things unique about the Mentawai islands relative to other counties hosting guests, and these need to be taken into account.  Mostly the differences exist in DISTANCE from the provincial base (Padang, West Sumatra), lack of infrastructure and logistics in transporting goods and clients to the location, and the lack of medical and communication infrastructure supplied by the county government.  It is these things and what they mean for the resort businesses based in Mentawai and the safety of their clientele that need to be included in any revised regulations.  Let’s not reinvent the wheel.

Also, it should be noted that the Forum needs to come up with a current and future carrying capacity (read: road map) for development in the islands.  This means that there is an understanding that the numbers have to increase every year as other operators want to come into the market, or as current operators want to upgrade their license and capacities.

The world is becoming more crowded every year, and the Mentawais should reflect that.  There is no way for sustainability to be reached while always keeping the same number of surfers year in and year out.  We’ll always have to add more capacity.  The method and numbers of sustainable development are not part of this proposal.  It should be noted in my personal opinion, no resort should be able to host more than 18 surfers.

Resort Regulation and Enforcement Methods

Resort licensing should reflect the following:

1)      Realities of the location of the businesses,

2)      The way those businesses compete with each other,

3)      The safety of the clientele,

4)      The relative capital investment to each other,

5)      And finally the relative contribution to the communities and government.

The government should implement “multilevel resort licensing”.

License C (Homestay/Losmen License).

Requirements:

• Business license from the Kepala Desa and Camat.
• Evidence of land purchase or rental agreement for the business’ use.
• Indonesian Tax number.
• SIUP, SITU, TDP.
• Every bed must have a mosquito net in good condition.
• Every homestay must have one toilet with a septic holding system.
• First Aid box complete with enough medicine for normal medical events such as cuts, malaria, diarrhea and headache.
• 4 surfers per homestay maximum (4 votes in the forum), but allowed to take more guests who are not surfing.
• Surfing guests will only be allowed to surf waves that they can walk or paddle to.  Renting third party boats for surfing other breaks is illegal.
• VHF radio that can reach the nearest Kepala Desa or Camat’s office to report and make emergency requests.
• All guest rooms must be lockable.
• All homestays must provide clean drinking water for the guests, as being included in the price of staying there.
• Surf guide for the surfing guests.  Guides must have graduated from the surf guide school which should be regulated by the investor’s forum.
• Transport for the guests to and from Padang must be included in the price of the stay as advertised.
• Minimum $50 USD / day.

License B (Small Resort License).

Requirements:

• All of the requirements for License C, as well as:
• Business license from PEMDA and Dinas Pariwisata.
• IZIN UKL/UPL
• IZIN IMB
• Boat supplied for guest use with two engines.  The boat must be on standby 24/7 with a competent driver that has also passed surf guide school.
• Electricity generator at a minimum 3 KVA output.
• All food and drink provided by the resort, and included in the cost of the stay.
• 6 surfers per resort (6 votes on the forum), but allowed to take more guests who are not surfing.
• Office in Padang with at least one full time employee to deal with logistics, communication etc.
• Minimum $100 USD /day.

License A (Large Resort License).

• All of the requirements for License C and B, as well as:
• Computer and internet facilities.
• International telephone facilities.
• 18 surfers maximum (18 votes on the forum) but allowed to take more guests who are not surfing.
• Izin Pariwisata Tetap which is good for at least 3 years.
• 2 boats with 2 engines each on standby 24/7 with competent drivers who have also passed surf guide school.
• Minimum $200 USD /day.

Charter Boat Regulation and Enforcement Introduction

To a large degree, all prior charter boat regulation has failed, which is surprising because it is a relatively easy thing to regulate.  It is a small enough industry that everybody knows everybody else’s business, and yet there has only been failure and dissent between parties since day one.  One thing that most operators don’t realize is that although we compete amongst ourselves within the Mentawai islands, we are also competing as a destination with other destinations in the world.  Mentawai as a brand is being negatively affected by the dissention amongst the various operators, and this needs to change.

Any system that was to work would have to be:

• Completely transparent for all parties involved.
• Anybody in the market (world-wide) should have an equal chance to get a license to operate in the Mentawais.
• The amount of boats in the Mentawai should be limited to a sustainable number (35 is my opinion).
• The government and communities should have a tangible and immediate avenue of benefit from the industry.

Charter Boat Regulation and Enforcement Method Example

• On February 1^st, 2013, the Mentawai government holds a silent auction for operational licenses for charter boats operating in the Mentawais in 2014.
• On this day, it is made clear what the minimum bid is (example; $10,000) This money is for the Mentawai government as licensing fee.
• Operators submit their bids into a box which remains in view of the public.  After 2 hours, the box is opened and bidding names and bid amounts are publicly displayed.  Of this number, the top 35 bids are the winners.
• The winners have one week to deposit the money into a bank account, after which time they receive a license good for the year.
• If the winners don’t deposit the money within the week, the next down the list get notice and have one week to pay, etc.
• The license is good starting one year from the date of the silent auction, which gives the operators a year’s notice to fill up the bookings.  If they are issued in February 2013, then the validity is for one year STARTING from February 2014.
• Licenses are transferrable and sellable on an open market with terms remaining the same.
• Harbormaster clearance for commercial vessels carrying passengers and departing to Mentawai are ONLY given if the operating license can be presented at the time of clearance sought.
• This method will also create a natural selection towards safer, modern and more up market vessels.
• Because it is fair across all markets, the winning bidders can build the cost of the license into their future bookings to compensate for the investment.  Because everybody has to do it, it will keep the industry competitive without major burdens.
• Charter boat guests follow the same procedure for registering and paying for guests as do the resorts (see below).

How Does It Work?

When a resort or charter boat (R/CB) has a trip that is about to start, they report to the Forum office in Padang to register their allowed capacity and clientele data as per their license.  The R/CB registers their client’s names and dates that the trip runs, and pays the required fees according to the regulations.  The Forum issues a receipt and a plastic laminated card (like Indonesian drivers’ license, or like laminated KITAS ID).

The card has the following information:

• Client’s full name
• a unique client number specific to the R/CB’s Forum account for identification purposes
• Which R/CB they are staying with
• The dates that are approved for the client to be surfing in the Mentawais
• This card can be kept by the client as a souvenir of their trip.
• If a client decides to extend their trip, they have to get a new card issued and new payment made to the Forum office, no exceptions.  The client may have the R/CB’s rep. get a new one for them, but the payment must be made as per usual.
• There is no charge for the issuance of the card, but there is a charge for a lost card that needs to be replaced.

Once the guest has received their card, they are free to surf anywhere in the Mentawai islands, at any time.  It will no longer be necessary to attempt to manage surfing spots or surfers.  The surfers must keep their card on them at all times (but not while surfing).  Should a surfer be unable to present a card to the enforcing authorities, they’ll be considered illegal and removed from the islands (see “fines levied” below this).

Administration of the Forum

From the $20 / guest / day (example), the Forum will be responsible for the following costs:

1)      Furnishing, renting and maintaining an office in Padang with internet connection, 3 cell phone numbers, fax machine, website, bank account and the purchase, operating and maintenance of the identity card generating machine (printer and laminator?).

2)      Wages for a Forum President, secretary, accountant and full time lawyer.  All the job positions must have a job description, and any employee of the Forum may be fired for negligence, just like a normal business.

3)      Any transportation, accommodation, communication and food consumed by any employee of the Forum, whilst they are on Forum-related business.

4)      Payment for a once a year third party audit on Forum books and accounts to the satisfaction of the voting members.

5)      Organizing and funding a twice yearly meeting for the Forum to vote on changes, amendments and additions to be decided upon as things progress (March and October).

6)      Charity organization and distribution for all Kepala Desa and Kepala Pemuda in villages where surfing has traditionally been done.  There will be no more villagers asking boats or resorts for charity.  The villagers will go to their Kepala Desa and ask them for a contribution to whatever they need, as everybody in the industry has already paid their contribution.  All Forum members will be given written proof of payment to the Desa and Pemuda, and will carry that with them at all times.

Enforcement of the Regulations

Last, but not least, the Forum will organize and administer the following enforcement program:

1)      Resource support for govt. officials who are willing to police the surfing areas, including a livable patrol outpost, speedboat, driver and fuel available to do a once a week check on licenses and surfers.  The 5 areas will be Siberut Selatan, Sipora Utara, Sipora Selatan, Silabu and Sikakap.

2)      The officials may at any time conduct a random check on any resort or charter boat (or even while there is surfing happening), and ask to see the Forum identity cards of all surfers staying/surfing there.  This can be cross checked with the Forum database online, and confirmed that the cards are correct and legitimate.

3)      The Forum can receive reports regarding illegal parties/activities directly to the Padang office, and who will direct the appropriate action in the field using the correct authority.

Fines levied

If the world is to take these regulations seriously, there needs to be some serious disincentive for offenders.  As a community, it will be relatively easy to police the waters that we all operate in.  However, having third parties enforce the regulations opens avenues for potential corruption in the field.  This is a relatively small risk, as it is easy to tell if the illegal surfer that you saw yesterday (and reported to the Forum) is still surfing or not.

I think any fines levied should be as such:

1)      Guests found to be illegally surfing in the Mentawais will be given an automatic fine of Rp. 1 juta per illegal surfer, and removed back to the nearest port of departure at their expense.  The fine and transport payment will help to cover the costs of the report made and enforcement by the authorities for each and every incident.  The money is payable directly to the enforcer at the time, and is entered in as petty cash deposit, used to help support the running operations at the post.  The guest may choose to stay in Mentawai and change their choice of tourism (go snorkeling, fishing or trekking instead), but they may not surf again without a Forum-issued identity card.

2)      The accommodation hosting the illegal surfer will be given one warning with the understanding that the second time it happens, it will result in and immediate fine of 5 juta.

3)      Any charter boat found to be operating with illegal surfers on board will be immediately returned to Padang with an official escort on board.

4)      The Forum will write a letter of complaint with copies going to Mentawai government offices, as well as the national Adpel and KPLP offices, and legal action will be sought by the Forum where appropriate, depending on the existing laws

Question to be answered by PEMDA Mentawai

Some questions need to be answered by PEMDA before anybody will be able to move ahead with a revision of existing law.

1)      What are the Indonesian laws that currently exist regarding commercial accommodation?

2)      What are the existing laws regarding zoning and commercial development?

3)      What is existing road map that PEMDA has regarding a 5, 10 and 15 year development plan for tourism in the Mentawai islands?

4)      Is there a legal basis for refusing charter boats a port clearance to go to an area that is licensed?

5)      Is the government willing to have the Forum be the sponsor of enforcement activities in the Mentawai islands?

 

Appendix I

**PT HARTA KARUN permits, licenses and taxes current to 2012.

• Persetujuan Penanaman Modal Asing dari Badan Koordinasi Penanaman Modal Daerah
• Akta Pendirian Perusahaan dari Notaris
• Surat Keputusan Persetujuan buka Perseroan terbatas dari Kehakiman dan Hak asasi manusia
• Nomor Pokok Wajib Pajak Perusahaan
• TA01 dan izin kerja Depnaker setiap tahun buat kareawan asing, termasuk saya sendiri
• Kartu Izin Tinggal Terbatas setiap tahun dari imigrasi untuk setiap kareawan asing
• Surat Keterangan Lapor Diri dari Polri setiap tahun
• Nomor Pokok Wajib Pajak Pribadi
• Kontrak sewa lahan dengan pemilik pulau Mainuk
• Surat Keterangan Terdaftar Perseroan
• Surat Izin Tempat Usaha
• Surat Izin Usaha Perdagangan Besar
• Surat Izin Usaha Perdagangan Kecil
• Surat Keterangan Domisili Usaha
• Tanda Daftar Perusahaan Perseroaan Terbatas Padang
• Tanda Daftar Perusahaan Perseroaan Terbatas Mentawai
• Sertipikat Keanggotaan Asosiasi Perusahaan Perjalanan Indonesia
• Izin Prinsip
• Surat Keterangan Tempat Usaha Mentawai
• Kesepakatan Bersama Kabupaten Mentawai
• Surat Izin Usaha Tetap Kabupaten Mentawai
• Surat Perintah Tugas Pemeriksaan Pelaksanaan Peraturan Ketenagakerjaan
• Upaya Pengelolaan Lingkungan dan Upaya Pemantauan Lingkungan
• Izin Mendirikan Bangunan
• Bayar Pajak Gaji Kareawan setiap bulan
• Bayar Pajak Mentawai Hotel dan Restoran setiap tahun
• Bayar Pajak Laba setiap bulan