Wednesday, 9 May 2012


          The Mineral and Coal Law No. 4/1999 has been very accommodative to national interest, while on the other hand, it denies or eliminates foreign interest. Work Committee (Panja) of the House of Representatives, during deliberation of the Law, looks as if they are in the middle of opinion competition arena. We insert Articles 103 and 107 concerning added value. In the implementation, it is very beneficial to national interest. Therefore, the multiplier effects of the requirement to build smelter give 100-400 percent profit to the country. So, the Law is pro-people, cent profit to the country. So, the Law is pro-people, instead of pro-foreign interest, Sonny Keraf, Chairman of Work Committee on Mineral and Coal Law, told Business News.

            After the reformation, the national political structure experienced significant changes, including the one related the lawmaking authority. The society, government, and all stakeholders are able to read the thinking and work paradigm of the lawmakers, including evaluating of the quality and achievement. But, during the deliberation of the Mineral and Coal Law, the atmosphere in the Work Committee is in the midst of political and moral accountability. Therefore, we are confident that the opinion competition to produce the Law which is pro-people has been very accurate.

            Some significant benefits of the Law are, amongst others, requirement for a mining company to use local content so that local workers around the location can be absorbed maximally. And, mining company is required to use local goods and services. So far, there are many companies, like Freeport, who use heavy equipment from overseas, especially from New Zealand and Australia. The provisions on local content are set forth in Article 106 of the Law.

        Besides Article 106, there are some other Articles which refer to political and moral accountability for national interest. The Work Committee inserted Article 147 which requires education and training activity for the society. And, Article 113 stated that all mining companies shall perform divestment through five-year and 10-year stages of production. There are many Articles which are pro-people and not at all pro-foreign interest. There is Article 124 on mining services and Article 5 on Domestic Market Obligation (DMO) which are used simultaneously for production control. Article 107 is about local businesses. There are also some Articles stipulating transition plan from Operating Contract (KK) to Mining Concession (IUP).

            Legislative Body of the House of Representative sees that the House Representative is a legislative heavy institution. The fact is that a major part of members of the House of Representatives (560 members) of 2009-2014 are businessmen. Only a few who have sufficient socio-political background.

        Political liberalization where political powers are conducted through transactional approach by making money as the main variable in politics. Open political system (closed proportional system proposal from the Indonesian Democratic system proposal from the Indonesian Democratic Party of Struggle (PDI-Perjuangan) in General Election Bill was always rejected) and recruitment pattern in every political party in facing general election significantly determines quality outcome of the House of Representatives. Consequently, today’s politicians and leaders are controlled by popularity and capital. Only a few who have high integrity and adequate capacity who are popular and have large amount of capital.

            Regarding controversy on Mineral and Coal Law, the Legislative Body considers that the Law? Substance is already ideal, and it does not favor foreign interest. On the contrary, the Legislative Body considers that non-governmental institutions (LSM) are the ones who frequently interfere with the Law content. While, the approach used in the deliberation of the Mineral and Coal Law is legislation process. I suspected the LSM who commented about the content of the Law. They have gone too far in their interference.

BUSINESS NEWS - April 25, 2012

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