The Indonesian Miners
Association (API) fear investors might quit if the condition of mining industry
in Indonesia remained to be meesy with one regulation contradicting against
another; under such circumstances investors might walk away from Indonesia.
There was no other way for Indonesia but the Government and Parliament should
make amendments on the overlapping regulations. Some articles of Law no. 4/2009
on Mineral and Mining (Minerba) and Law no. 32/2004 on the Provincial
Governments might lead to inconstitutional acts. “If there was no legal
assurance investors would not take any chabces, they may run away” Tony Wenas
of API told Business News sometime ago.
API responded positively to the instruction of President
Susilo Bambang Yudhoyono in regard to unclear rule-of-the-game in the mining
industry. API had made various analysis and arrived at the conclusion that the
Law needed amendments. Meanwhile recommendations to the Ministry of Energy and
Mineral Resources had been set forth repeatedly, but the situation was as yet
not conducive to investments. The effort to withdraw permit from the Regencies
by the Central Government was facing big obstacles. “One possible wayout was by
law amendment or the Government should issue Government Regulation as
Substitute to Law (Perpu) etc. One thing is sure the Government must take
drastic changes” Tony Wenas was quoted as saying.
Beside controversion in Article 69a, 69b Law no. 4/2009
API also saw the potential confusion in Regulations of lower degree than Law,
i.e. Government’s regulation (PP) no. 24/2012 on amendments to PP no. 23/2010
on the Execution of Mining Business Minerba Activities. “The PP no. 24 reflected
the Government’s good intention in terms of extending Working Contract in the
form of Mining Permit (IUP). But apparently the Regents reacted with offensive
stance for Judicial Review to the Constitutional Courts” Tony Wenas remarked
further.
Article 112d PP no. 24/2012 already clarified that
extension of KK in the form of IUM was in the domain of the Ministry of Energy and
Mineral Resources. Meanwhile the Regents were ignoring the PP and referred to
Law no. 4/2009 instead. API was expecting the Central Government to strengthen
coordination between the Government as Head of the region at the moment when
Judicial Review or law amendment was underway. The Ministry of Energy and
Natural Resources must also recruit mining inspectors so controlling prices
afield could be more effective. As long as the number of mining inspectors for
the entire mining location in nearly 500 regencies in Indonesia was only 51
(fifty one) persons, the number was not enough for handing around 4,000 mines
in all regencies in Indonesia. At least the Ministry of ESDM had recruited
another 3,000 persons to control all producers of minery products.
The qualification for the position was at least S-1
Degree in Minery Sciences environmental sciences or other related sciences. If
the qualification were not met, it was impossible for the Government to
implement good mining practices. A good inspection would result in good and
proper reporting. The Report would be sent regularly to the Central Government
so control could run effectively. “We have forwarded this proposal to the
Government”.
Other articles of the Minerba Law needed revision,
particularly Article 169. In this Article, between point (a) which stated
respect for KK/KKP2B which already existed before the Minerba Law was issued,
and point (b) which demanded KK/PKB2B to adjust itself with the stipulations in
Minerba Law were contradictory. Even point C of this Article was in practive
contradictory to the Government’s wish to increase state income from the Mining
Sector. “We are at war against the Regents, because by the time we are ready
for it the Government was regarded as being unable to give approval. The
Regents demanded 50 thousand, 100 thousand and 200 thousand hectares of land
for mining. Because the entry was Chapter 171, if the chapter was not obeyed we
are not doing the work plan in the zone where the working contract as long as
the KK was valid. The Regent demanded for a certain amount of USD. We have no
other choice. They demanded hundred of thousands hectares which was
contradictory to Chapter 53 which stated that the right of Regencies was only
15 hectares. Frankly speaking we are confused about all this”.
Business News - August 29, 2012
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