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Ada Pertanyaan? Hubungi Kami Marcell Sihombing, Kartini L. Makmur
Mining Activities. Photo by: ADY
Indonesia’s Mining Law currently sits on parliament’s top 25 “to do” list and is seen as a vital component in the 2015 National Legislation Program (Prolegnas). The revision of the current law is deemed a pressing issue in order that legal uncertainties may be avoided, especially in light of the fact that such a revision has been on the agenda since 2010. Currently, the House of Representatives (House) is intensifying its discussions of the Draft Bill on Mining Law (Draft Bill), and is paying specific attention to the need to force companies to conduct all of their mining transactions on Indonesian soil.
Lawmaker Harry Purnomo (Commission VII) has expressed his concerns about companies who engage in transactions outside state borders. Such dealings mean that the government has no absolute control over the country’s natural resources, including over any natural-resource trading management system.
“The new Mining Law must regulate for the mandatory use of state-owned banks,” stated Mr. Purnomo at a discussion held by the Alumni Corps Muslim Students Association (Korps Alumni Himpunan Mahasiswa Islam – KAHMI) at Jakarta’s Hotel Sahid Jaya on 14 September 2015.
During the discussion, Mr. Purnomo expressed his belief that such provision was necessary in order that the state be able to optimally partake in the profits generated by the mining sector. Mr. Purnomo explained that such a move would contribute previously untapped mining-resource income to state coffers.
“We will finally receive a flow of profit from the movement of currencies. In fact, this provision should not just be limited to minerals and coal. Instead, we should establish a total system of mining-sector management that will offer the largest benefit to our national budget,” emphasized Mr. Purnomo.
In line with Mr. Purnomo’s arguments, the Indonesian Association of Mining Experts (Perhimpunan Ahli Pertambangan – Perhapi) has also outlined several measures that it believes should be incorporated into the Draft Bill. Evi Armila, the Head of Draft Bill on Mining Law Implementation for Perhapi, revealed that her organization was currently preparing several suggestions for the House to consider, with the intention that they would be able to complement the present Mineral Law, which is widely perceived as being unsuited to recent developments within the mining sector.
Mrs. Armila further clarified that the Draft Bill must primarily include clear provisions pertaining to licensing procedures, as they are implemented by the government and mining companies. Secondly, the Draft Bill should mandate for the equal treatment of all mining businesses. Mrs. Armilla expressed her optimism that these two provisions would enable mining companies to cooperate smoothly with a Special Business Agency. And finally, Mrs. Armila emphasized the need to maintain the country’s mineral-refining and processing standards, and stated that any revised law should set out a series of clear and definitive standards for the industry to follow.
“Next, there should be a review of the management of various types of mines, as this is an area long overdue for regulation. A system of mine management should be synchronized with a national long-term development program. Under such a provision, all mineral products that relate to issues of national sustainability must be dealt with domestically, and this in turn will contribute to our national wealth,” explained Mrs. Armila.
With regard to management issues, Mrs. Armila asserted that her organization had agreed to suggest the establishment of a new state-owned enterprise, which would be responsible for the management of the mining sector as a whole. Mrs. Armila pointed out that such a state-owned enterprise might offer a workable solution as regards the issue of contracts or licenses stipulating limited state control. On this particular question, Mrs. Armila made reference to the infamous case of Churchill Miningversus the Indonesian Government, which eventually went through a process of international arbitration.
Mrs. Armila stated at the recent meeting that Perhapi had been holding in-depth discussions regarding the issue of “state-control”, a term which she said could be interpreted in a number of ways, including control over contracts and licensing. Historically though, according to Mrs. Armila, state control over contracts hasn’t worked out particularly well for the government here, while even shifting to a licensing regime had ended up bringing no significant changes to the industry.
“Which is precisely the reason why we come up with the idea of establishing a specialized state-owned enterprise,” asserted Mrs. Armila.
Mrs. Armila stressed, however, that she could not as yet picture clearly how such a specialized state-owned enterprise would function in any great detail, and admitted that a deeper feasibility study would need to be conducted. Mrs. Armila remains confident though that a concrete proposal will have been finalized before it comes time to submit ideas to the House.
(sp)
Marcell Sihombing, Kartini L. Makmur
Mining Activities. Photo by: ADY
Indonesia’s Mining Law currently sits on parliament’s top 25 “to do” list and is seen as a vital component in the 2015 National Legislation Program (Prolegnas). The revision of the current law is deemed a pressing issue in order that legal uncertainties may be avoided, especially in light of the fact that such a revision has been on the agenda since 2010. Currently, the House of Representatives (House) is intensifying its discussions of the Draft Bill on Mining Law (Draft Bill), and is paying specific attention to the need to force companies to conduct all of their mining transactions on Indonesian soil.
Lawmaker Harry Purnomo (Commission VII) has expressed his concerns about companies who engage in transactions outside state borders. Such dealings mean that the government has no absolute control over the country’s natural resources, including over any natural-resource trading management system.
“The new Mining Law must regulate for the mandatory use of state-owned banks,” stated Mr. Purnomo at a discussion held by the Alumni Corps Muslim Students Association (Korps Alumni Himpunan Mahasiswa Islam – KAHMI) at Jakarta’s Hotel Sahid Jaya on 14 September 2015.
During the discussion, Mr. Purnomo expressed his belief that such provision was necessary in order that the state be able to optimally partake in the profits generated by the mining sector. Mr. Purnomo explained that such a move would contribute previously untapped mining-resource income to state coffers.
“We will finally receive a flow of profit from the movement of currencies. In fact, this provision should not just be limited to minerals and coal. Instead, we should establish a total system of mining-sector management that will offer the largest benefit to our national budget,” emphasized Mr. Purnomo.
In line with Mr. Purnomo’s arguments, the Indonesian Association of Mining Experts (Perhimpunan Ahli Pertambangan – Perhapi) has also outlined several measures that it believes should be incorporated into the Draft Bill. Evi Armila, the Head of Draft Bill on Mining Law Implementation for Perhapi, revealed that her organization was currently preparing several suggestions for the House to consider, with the intention that they would be able to complement the present Mineral Law, which is widely perceived as being unsuited to recent developments within the mining sector.
Mrs. Armila further clarified that the Draft Bill must primarily include clear provisions pertaining to licensing procedures, as they are implemented by the government and mining companies. Secondly, the Draft Bill should mandate for the equal treatment of all mining businesses. Mrs. Armilla expressed her optimism that these two provisions would enable mining companies to cooperate smoothly with a Special Business Agency. And finally, Mrs. Armila emphasized the need to maintain the country’s mineral-refining and processing standards, and stated that any revised law should set out a series of clear and definitive standards for the industry to follow.
“Next, there should be a review of the management of various types of mines, as this is an area long overdue for regulation. A system of mine management should be synchronized with a national long-term development program. Under such a provision, all mineral products that relate to issues of national sustainability must be dealt with domestically, and this in turn will contribute to our national wealth,” explained Mrs. Armila.
With regard to management issues, Mrs. Armila asserted that her organization had agreed to suggest the establishment of a new state-owned enterprise, which would be responsible for the management of the mining sector as a whole. Mrs. Armila pointed out that such a state-owned enterprise might offer a workable solution as regards the issue of contracts or licenses stipulating limited state control. On this particular question, Mrs. Armila made reference to the infamous case of Churchill Miningversus the Indonesian Government, which eventually went through a process of international arbitration.
Mrs. Armila stated at the recent meeting that Perhapi had been holding in-depth discussions regarding the issue of “state-control”, a term which she said could be interpreted in a number of ways, including control over contracts and licensing. Historically though, according to Mrs. Armila, state control over contracts hasn’t worked out particularly well for the government here, while even shifting to a licensing regime had ended up bringing no significant changes to the industry.
“Which is precisely the reason why we come up with the idea of establishing a specialized state-owned enterprise,” asserted Mrs. Armila.
Mrs. Armila stressed, however, that she could not as yet picture clearly how such a specialized state-owned enterprise would function in any great detail, and admitted that a deeper feasibility study would need to be conducted. Mrs. Armila remains confident though that a concrete proposal will have been finalized before it comes time to submit ideas to the House.
(sp)