Third Judicial Review of the Mining Law

For the third time, Law No. 4 of 2009 on Mineral and Coal Mining (“Mining Law”) is under judicial review; this time filed by the Indonesian Tin Businesspersons Association, and the Indonesian Community Mining Association in the Province of Bangka Belitung.

The applicants petitioned the Constitutional Court to repeal 11 aspects of the Mining Law: Article 22 (a, c, & f), Article 38, Article 51, Article 52 (1), Article 55 (1), Article 58 (1), Article 60, Article 61 (1), Article 75 (4), Article 172, and Article 173 (3).

In short, the applicants view those provisions as discriminatory against small- and medium-sized (e.g., community) enterprises. The core of the argument elaborated in the Court on Monday (17/5) by Dharma Sutomo, the applicant’s legal counsel, is that the requirements for obtaining (a) mining licenses and (b) mining concession areas effectively preclude smaller actors from being able to engage in mining activities.

In order to engage in most mining activities, the first thing that is required is a Mining Business License, or ‘IUP’: Article 38 of the Mining Law allows IUP to be granted to (i) corporate entities (i.e., Perusahan Terbatas / PT), (ii) cooperatives, and (iii) individuals. Those categories are too narrow, argue the applicants; it excludes other legitimate, legal organizations from obtaining IUP, such as Comanditer Venotschaap (CV), or firms.

Mining activities may only take place in licensed mining concession areas, or Licensed Mining Business Zones (‘WIUP’): the Mining Law regulates minimal and maximal sizes of those zones. The minimal size can potentially constitute an entry barrier to smaller companies with less capital, who are unable to exploit a zone of such size.

Moreover, as with IUP, the WIUP are available only to corporations, cooperatives, or individuals (Articles 51, 60); that presumably excludes other organizations from securing a licensed zone for their mining activities. Article 75 (4), another focus of the judicial review, allows only private companies and state- or regionally-owned enterprises to obtain Special Mining Business License (‘IUPK’); again, that may exclude other organizations.

The applicants in this judicial review argue that, in sum, the aforementioned provisions in the Mining Law are tantamount to a violation of Article 33 (1 & 4) of the 1945 Indonesian Constitution, which among other things provide for ‘economic democracy’ - ostensibly, equal participation of all - in the national economy.

This Indonesian Legal Brief is based upon research conducted by the hukumonline team.