Technology Cooperation and Capacity Building - CommDev

TECHNOLOGY COOPERATION AND CAPACITY BUILDING… Case Study NinePT Caltex Pacific Indonesia‘… A developing nation needs all the social and economiccompetencies that are so plentiful in the developed world. Andalthough these are the very competencies that the governmentsof developing societies are ill-equipped to disseminate—evenwith international aid—they are precisely the competencies thattransnationals possess in abundance and provide, teach, andencourage … Today [transnationals] need far more than adeveloping nation’s mineral resources. They need skilled labour,consumer markets, financial and commercial partners, andcontinuing business opportunities into the near and distantfuture. In other words, they need development. And their needis urgent, whether they acknowledge it or not.’Julius Tahija, Chairman EmeritusPT Caltex Pacific Indonesia‘Swapping Business Skills for Oil’Harvard Business Review, Sept.-Oct. 1993Environmental protectionEnvironmental conservation is an important priority of theGovernment of Indonesia, CPI and AI. One proof of CPI’spublished commitment ‘to be recognized as a leader inenvironment, health and safety among all Indonesianproduction-sharing contractors’ is the company’s trainingprogramme in these areas. Ninety-five Indonesian oil and gasprofessionals from Pertamina, government agencies, and CPIare trained at Chevron and Texaco facilities in the UnitedStates. Developed at the request of Pertamina, thecomprehensive and intensive four-month course includeshands-on and classroom study. Participants learn the latesttechnology and practices in operational safety, risk and healthmanagement, water and air quality, ground water protection,hazard identification and emergency preparedness.CPI is helping to safeguard the Indonesian rain forest byusing directional drilling techniques to minimize forestclearing, reinjecting produced water, and reforesting andreplanting to control erosion. In Sumatra, it has intensified aprogramme to remediate operating areas. Drill sites arebeing returned to their original state by planting indigenousspecies, and environmentally-compatible vegetation is beingplanted along access roads. CPI’s Ecology Clubs at its campsin Rumbai, Minas and Duri have established forest natureparks that preserve environmentally-sensitive areas of forestnear company camps for employees, their families andcitizens of Riau Province. CPI’s environmental protectionpolicy calls for full compliance with local and nationalstandards, and to self-regulate where standards do not exist.For example, CPI is committed to re-injecting 85 per cent ofproduced water by 1998. It has also taken other steps toprotect the Indonesian rain forest, including developing newdesigns for its gathering stations, applying directional andTHE BACKGROUNDThe economic and social development ofhost countries is often intertwined withthe business fortunes of transnationalcorporations and their local affiliates. Thisis evident not only in technical andbusiness areas but also in community andhuman resource development andenvironmental protection. At the heart ofthis partnership is technology cooperation,characterized as much by the building ofself-sustaining economic and socialcompetence as by the flow of technology,skills and financial resources.PT Caltex Pacific Indonesia (CPI),Indonesia’s largest producer of oil, worksclosely with Pertamina, Indonesia’snational oil company, and CPI’sshareholders Chevron and Texaco. Thecompany focuses on projects that meetIndonesia’s energy priorities and thatadd value for both the government andCPI’s shareholders. As the largestproduction sharing contractor forPertamina, CPI produces 720 000barrels of oil a day, approximately halfthe nation’s production.The company makes a significantcontribution to Indonesia’s economic andsocial development, meeting obligations tolocal communities, its 6400 employees and18 000 contractor employees, the nation,and all parties with a stake in it.The combination of business and socialobjectives is a feature of the public/privatepartnership in Indonesia. Its success stemsfrom the Government of Indonesia’scommitment to providing the economicand political framework conducive toprofitable operations. The frameworkincludes a stable political and economicsystem, a transparent and equitable legaland financial structure, soundenvironmental laws and regulations, andguaranteed movement of necessarypersonnel and materials.47