Completion of Mining-Law Revision Before End of 2016 in Doubt

Indonesian Version

 
Ricky Pratomo, ANT/Muhammad Agus Yozami
 

 

The current moratorium on the export of raw minerals, which is based on Government Regulation No. 1 of 2014 on the Implementation of Mining Activities, clearly states that any relaxation in the current export regime, including the requirement to build smelters, can only be allowed for companies which are holders of Special Mining Licenses (Izin Usaha Pertambangan Khusus – IUPK). This moratorium is expected to expire on 12 January 2017, however the Draft Bill on the Revision of the Minerals and Coal-Mining Law (Revision) has yet to be finalized by Commission VII of House of Representatives (House).  
 
Lukman Malanuang, Head of the Energy and Resources Research Department at the Alumni Corps Muslim Students Association(Korps Alumni Himpunan Mahasiswa Islam – KAHMI), has predicted that Commission VII of the House will not be able to finalize the Revision within the 30 working days which remain before the current export regime expires. Therefore, it is highly unlikely that the Revision will be enacted by the President before the end of this year. According to Mr. Malanuang, this failure is particularly ironic, as the Revision was originally slated by the House to become a prioritized element of the 2016 National Legislation Program.
 
“We should prevent any legal vacuum [within the mining-law regime] emerging after 12 January 2017,” Mr. Malanuang stated at a press conference which was held in Jakarta on Thursday, 13 October 2016.
 
Mr. Malanuang further argued that at least three factors had to be taken into account during preparations for the new regulation, in order to prevent the aforementioned legal vacuum.
 
Firstly, the new regulation should not contradict any of the provisions which were originally set out under Law No. 4 of 2009 on Minerals and Coal Mining. Secondly, the new regulation should guarantee the continuity of the relevant companies’ business operations, in order to offer legal certainty for employees of mining companies who obviously need to support their families, and who also contribute to various regional economies, enhance regional and national economic development, as well as pay taxes and support foreign exchange within Indonesia. Finally, any such regulation should be enacted before the 12 January 2017 deadline.
 
“Based on these three factors, KAHMI is urging the President’s assistants to formulate precise legal solutions and comprehensive input for the President,” Mr. Malanuang explained.
 
Representing his institution, Mr. Malanuang asserted that his suggestion could ultimately prevent the President from choosing an incorrect form of regulation which could trigger unnecessary social and economic unrest.
 
“Any modifications [which are made to the current mining regulations] run the risk of having a negative impact upon a number of downstream projects and upon the Trisakti and Nawacita Programs, as well as eroding the trust of foreign investors as regards any future projects within Indonesia,” Mr. Malanuang asserted.
 
In support of Mr. Malanuang’s argument regarding the Revision, Ikhwan Fahrojih, a researcher at Central Studies for the Energy and Mining Law (Pusat Studi Hukum Energi dan Pertambangan), admitted that the implementation of any National Legislation Program could indeed become subject to change. Therefore, in spite of the fact that the Revision has been included in the National Legislation Program since 2010, it has yet to be completed.
 
(cd/sp)