Mining Bill Deliberation Continued to Plenary Session

MINISTRY OF ENERGY AND MINERAL RESOURCES

REPUBLIC OF INDONESIA

PRESS RELEASE

NUMBER: 177.Pers/04/SJI/2020

Date: 11 May 2020

Mining Bill Deliberation Continued to Plenary Session

After being delayed, the revision process of Law Number 4 of 2009 on Mineral and Coal Mining (Minerba) has finally entered the final phase. On this Monday (11/5), Minister of Energy and Mineral Resources (EMR), Arifin Tasrif, has attended a working meeting with Commission VII of House of Representatives of Republic of Indonesia (DPR RI) to discuss the bill, a meeting which was also attended by representatives from Ministry of Industry, Ministry of Finance, as well as Ministry of Law and Human Rights.

The Minerba Bill has been agreed and signed by the government and DPR, and will be discussed further in the Plenary Session.

"The government welcomes the initiative of DPR RI to prepare the Minerba Bill as part of the efforts to improve the management of mineral and coal in the future, as well as an effort to carry out the mandate of Article 33 of the 1945 Constitution in order to maximize the use of mineral and coal for the greatest prosperity of the people", said Minister Arifin.

As a concrete effort to improve the management of mineral and coal, the government's Working Committee (Panja) on Minerba Bill together with its DPR RI counterpart between 18 February 2019 and 11 March 2020 have agreed on the revision to several articles in the Bill, among others:

a. solution to inter-sectoral problems, namely through demarcation of processing and refining licensing authority between Ministry of EMR and Ministry of Industry as well as the guarantee of space use in areas which have been given to license holders;

b. the conception of Mining Jurisdiction: according to this Bill, mining survey and research can be carried out throughout Indonesian jurisdiction;

c. reinforcement of the Increase in Added Value Policy, namely by giving licensing period incentive to Mining Business License (IUP)/Special Mining Business License (IUPK) integrated with processing and/or refining facilities;

d. support for exploration activities to discover mineral and coal deposit, namely by giving the survey and research assignment to national research agencies, SOEs, Regional Government-Owned Enterprises, or private enterprises as well as imposing the obligation to provide a Reserves Resilience Fund on business actors;

e. a special regulation on rocks business license, namely the new Rocks Mining License (SIPB) which offers easier and simpler licensing mechanism;

f. reclamation and post-mining, namely by imposing criminal sanction on license holders not carrying out reclamation and post-mining activities;

g. the license period for Integrated IUP or IUPK, License Integrated with Metal Processing and/or Refining Facilities or Coal Development and/or Utilization Activities is 30 (thirty) years and can be extended for 10 years each time after the requirements are met;

h. to accommodate the Decision of Constitutional Court, the stipulation of Mining Area is made after an area is determined by provincial government and the article on the minimum size of Exploration WIUP (Mining Business License Area) is revoked;

i. Status of Mineral and Coal with Certain Conditions, which regulates the status of mineral or coal extracted from mining without license as Confiscated Goods and/or State Assets;

j. strengthening of SOE role, which among others regulates that former WIUP and WIUPK can be stipulated as WIUPK, SOEs are prioritized in the offer of such WIUPK, and SOEs have priority to buy divested shares;

k. Contract of Work (KK)/Work Agreement on Coal Mining Business (PKP2B) operations will be continued as IUPK operations by considering the efforts to increase state revenue;

l. Artisanal and Small-Scale Mining License: the maximum size of Artisanal and Small-Scale Mining Area (WPR) has quadrupled, from 25 hectares to 100 hectares, and there is an additional regional revenue in the form of artisanal and small-scale mining fee; and

m. the availability of a National Mineral and Coal Management Plan, which serves as a guideline for sustainable mineral and coal management.

From the deliberations held by the Minerba Bill Panja, the following results have been achieved: a. 2 chapters have been added; b. 51 articles have been added; c. 83 articles have been amended; d. 9 articles have been revoked; thus, 143 out of 217 articles have been amended, or about 82% of the total articles in Law Number 4 of 2009.

"Bearing in mind the huge number of articles of Law Number 4 of 2009 that have been changed, we hope this Work Meeting can consider that the formulation of Minerba Bill uses a Replacement Bill (RUU Penggantian) concept, not an Amendment Bill (RUU Perubahan) one", requested Minister Arifin.

The government's Minerba Bill Panja has also carried out synchronization of the content of the Minerba Bill by involving DPR RI's Expert Team, and several additional articles have been proposed in order to synchronize and improve the legal drafting, as follows:

1. to revoke Article 1 point 6a on the definition of Mineral and Coal Mining Authority;
2. to amend Article 1 point 31 which states that WIUP is granted to IUP and SIPB holders;
3. to amend Article 1 point 34 which states that WUPK means areas that can be managed for national strategic interests;
4. to amend Article 161B section (1) which adjusts the criminal fines imposed on IUP/IUPK holders not carrying out reclamation/post-mining activities, from 10 billion Rupiah to 100 billion Rupiah;
5. to add Article 169C point f on the transitional provision which states that monitoring can still be carried out by Supervision Officials appointed by the Minister before the supervision officials determined in the law are appointed;
6. to add Article 169C point g which regulates the provision on the meaning of Regional Government authority in Law Number 4/2009 and other laws as the authority of the National Government;
7. to add Article 172E which regulates the period for the stipulation of National Mineral and Coal Management Plan;
8. to add Article 173B which regulates the revocation of Attachment CC of Law Number 23/2014 on Regional Administration, particularly on the division of the authority to manage mineral and coal mining to provincial governments;
9. to add Article 173C which regulates a transition period of 6 (six) months before the mineral and coal mining authority by the national government is implemented and a ban on the issuance of new licenses during the period; and
10. to revoke Article 174 section (2) on the reporting of the Law implementation to DPR within a 3 (three) year period, because the government's reporting obligation to DPR has been regulated in a number of laws and regulations, especially those relating to the basic duties and functions of DPR.

Minister Arifin continues that in addition to the need to synchronize the above ten points, there is still substance in the Minerba Bill that must be decided together in the meeting, namely, inclusion of the 51% divestment obligation.

"Until now, the government has held the view that the amount of divestment obligation will be sufficiently set out in a regulation below law, namely a government regulation", the Minister concluded. (IY)

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