As AEC Approaches, Harmonizing Energy Policy is a Must

 
Christina Desy, Kartini L Makmur
 
Given their substantial and important contribution to state revenue, extractive industries play an important role in many ASEAN countries, including Indonesia. In particular, the oil and gas sector, contributes 60 percent of revenues from the whole natural resources sector, higher than fisheries, agriculture, and forestry.
 
Realizing the importance of extractive industries, the Institute for Essential Service Reform (IESR) has launched the Regional Framework on Extractive Industries Governance. This framework will be used as a guideline to manage extractive industries in the ASEAN region, and also provide for the market liberalization under the ASEAN Economic Community (AEC).
 
The framework also incorporates non-governmental organizations’ points of view which will act to broaden the considerations of the governments of ASEAN nations in determining their mineral policies so as to be in line with one another, and to harmonize the extractive industry policies of ASEAN countries.
 
Febby Tumiwa, a mining expert from IESR, said that the general purpose of the framework is to optimize the function of extractive industries in improving human resource development as well as boosting economic growth.
 
“The Framework can be used for Indonesia in particular, and also other ASEAN countries in general,” said Mr. Tumiwa in Jakarta last Friday.
 
Domestically, the harmonization of mineral policies is needed to deal with Indonesia’s energy crises. According to Rinaldy Dalimi, a member of the National Energy Council, Indonesia no longer has sufficient energy reserves to meet its predicted energy requirements. He is of the view that it is time for Indonesia to seriously start saving its energy resources, as energy is just as important as food for maintain human life and living standards.
 
A similar sentiment was also conveyed by Ali Mundakir, Pertamina’s VP Corporate Communication. Giving details of the looming crisis, Mr. Mundakir said that Indonesia’s current oil reserves can only satisfy domestic demand for the next eleven years at the most.
 
If the fuel consumption grows consistently at 5 percent per year, it is predicted that domestic demand will reach 84 million kiloliters by 2020, but on the supply side Indonesia can only produce 41 million kiloliters. The inevitable outcome is that Indonesia will need to import more fuel.
 
Iwa Garniwa, an energy expert from Universitas Indonesia, said that the government is yet to establish the required energy policies for the whole of Indonesia, particularly in regard to electricity procurement. Of particular concern to Mr. Garniwa’s is that electricity supply is too centralized on Java, with other regions suffering from low electricity infrastructure.
 
Given these circumstances, Gita Widya Laksmini Soerjoatmodjo, a researcher at the Indonesian Parliamentary Center, emphasizes the urgency of strengthening decentralization so that regional governments may optimize their natural resource management in their regions to meet local energy demands.
 
By granting them sufficient authority, regional governments can independently formulate related policies and measures that will generate optimum benefits for their regions. Furthermore, Mr. Soerjoatmodjo expects that a further consequence will be each region will be motivated and work better to increase regional revenue.
 
The government, however, must pay more attention to regions with abundant natural resources, such as Aceh, South Sumatera, Riau, East Kalimantan and Papua. Mr. Soerjoatmodjo asserts the government must ensure fair income distribution to these regions to prevent them from separating from Indonesia and to maintain political stability.
 
(hot/kc)