New Govt Must Reform Energy Sector


Robert Sidauruk, Kartini L Makmur
 
The recently inaugurated administration of President Joko Widodo and Vice President Jusuf Kalla must now respond to high public expectations of a comprehensive transformation for Indonesia. This includes maximizing the utilization of natural resources for the greater benefit of its citizens and reforming bureaucracy in the energy sector.
 
Emanuel Bria, Researcher at the National Resource Governance Institute (RGI), argues that improving the accountability of bureaucracy is the starting point for the reform of the whole energy sector.
 
Mr. Bria said that the recent bribery case involving Jero Wacik, the former Minister of Energy and Mineral Resources, and Rubi Rudiandini, the former Head of the Special Works Unit for Upstream Oil and Gas Activities (SKK Migas), has created further impetus for the new administration to implement true reform.
 
 “The public is waiting for concrete solutions from the new administration to address issues on declining oil lifting, dependency on fuel imports, and energy sector subsidies,” said Mr. Bria on Wednesday.
 
In addition to the oil and gas sector, Mr. Bria also highlighted a number of additional challenges in the mineral sector that need to be resolved. For instance, the debate on the mineral export ban policy, lack of law enforcement, and centralization of mining licensing processes, all of which have hampered coordination between the central and regional governments.
 
“The centralization of mining license processes has created overlapping authority between the central and regional governments,” said Mr. Bria.
 
To assist the government in solving these issues, RGI and Universitas Gadjah Mada have prepared two recommendations. Patrick Heller, another RGI’s researcher, said that the first recommendation is to focus on measures to improve transparency in the energy sector, while the second recommendation is emphasizing the appropriate administration and management of oil and gas in Indonesia.
 
“In our first recommendation, we present a comprehensive mechanism to improve transparency in licensing processes. Additionally, we also designed a mining contract that might bring great benefit to the public,” added Mr. Heller.
 
In regard to the law enforcement issue, Mr. Heller said that it can be resolved by amending the Oil and Gas Law, which must include restructuring measures to ensure law enforcement in energy sector is performed in consistence manner.
 
“In our second recommendation, we introduce several types of institutional and organizational designs based on international experience to improve the accountability and role of national oil companies,” Mr. Heller concluded.
 
(hot/kc)

Robert Sidauruk, Kartini L Makmur
 
The recently inaugurated administration of President Joko Widodo and Vice President Jusuf Kalla must now respond to high public expectations of a comprehensive transformation for Indonesia. This includes maximizing the utilization of natural resources for the greater benefit of its citizens and reforming bureaucracy in the energy sector.
 
Emanuel Bria, Researcher at the National Resource Governance Institute (RGI), argues that improving the accountability of bureaucracy is the starting point for the reform of the whole energy sector.
 
Mr. Bria said that the recent bribery case involving Jero Wacik, the former Minister of Energy and Mineral Resources, and Rubi Rudiandini, the former Head of the Special Works Unit for Upstream Oil and Gas Activities (SKK Migas), has created further impetus for the new administration to implement true reform.
 
 “The public is waiting for concrete solutions from the new administration to address issues on declining oil lifting, dependency on fuel imports, and energy sector subsidies,” said Mr. Bria on Wednesday.
 
In addition to the oil and gas sector, Mr. Bria also highlighted a number of additional challenges in the mineral sector that need to be resolved. For instance, the debate on the mineral export ban policy, lack of law enforcement, and centralization of mining licensing processes, all of which have hampered coordination between the central and regional governments.
 
“The centralization of mining license processes has created overlapping authority between the central and regional governments,” said Mr. Bria.
 
To assist the government in solving these issues, RGI and Universitas Gadjah Mada have prepared two recommendations. Patrick Heller, another RGI’s researcher, said that the first recommendation is to focus on measures to improve transparency in the energy sector, while the second recommendation is emphasizing the appropriate administration and management of oil and gas in Indonesia.
 
“In our first recommendation, we present a comprehensive mechanism to improve transparency in licensing processes. Additionally, we also designed a mining contract that might bring great benefit to the public,” added Mr. Heller.
 
In regard to the law enforcement issue, Mr. Heller said that it can be resolved by amending the Oil and Gas Law, which must include restructuring measures to ensure law enforcement in energy sector is performed in consistence manner.
 
“In our second recommendation, we introduce several types of institutional and organizational designs based on international experience to improve the accountability and role of national oil companies,” Mr. Heller concluded.
 
(hot/kc)
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