- The Constitutional Court (Mahkamah Konstitusi - "MK") has ruled that Article 169A (1) of Law No. 3 of 2020 on the Amendment to Law No. 4 of 2009 on Minerals and Coal Mining (“Regulation 3/2020”) is not in compliance with the Indonesian Constitution. Article 169A (1) of Regulation 3/2020 states that Contracts of Work (Kontrak Karya – "KK") or Coal Contracts of Work (Perjanjian Karya Pengusahaan Pertambangan Batubara – "PKP2B") will be subject to guaranteed extensions as Special Mining Business Licenses (Izin Usaha Pertambangan Khusus – "IUPK").
- The MK has now ruled that the phrase, “may be granted an extension” is more suitable and will ensure that the article in question does not contradict the national constitution. In its ruling, the MK stated that the KK and PKP2B were clearly private legal relations that should be settled in accordance with the timeframes set out in the relevant agreements. Accordingly, no further guarantees will be required in order to prioritize the extension of KK and PKP2B as IUPK.
- The MK had found that the phrase, as set out under Article 169A (1) of Regulation 3/2020, was in contradiction with the role of state-owned enterprises as regards the development of the national economy, as stipulated under Article 33 of the Indonesian Constitution. Furthermore, said provision was also found to be in contradiction with the spirit of state control (penguasaan negara) and the mandatory provision of opportunities to domestic enterprises.
- For more on this story, see Hukumonline: “MK Putuskan KK-PKP2B Tidak Otomatis Perpanjangan Menjadi IUPK”.
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