Government starts improving mining resources management

Senin, 20 Februari 2012 | 07:31

Amid today’s trend of social conflicts between mining companies and local people, the government is looking to seriously improve the management in the mining sector.On January 10, 2012, President Susilo Bambang Yudhoyono issued Presidential Instruction No.1/2012 for the Minister of Energy and Mineral Resources (ESDM), governors and regents across Indonesia.

They are required to increase the effectiveness of monitoring and supervision of coal mining under the licenses called IUP and PKP2B. The letter also instructed the authorities to ensure eco-friendly good mining practices and the development and empowerment of local people.

The President also issued Presidential Decree No.3/2012 to form an evaluation team of current coal mining contracts issued by the central government. It appoints Minister of Energy and Mineral Resources as chairman of the evaluation team.

The Energy Ministry’s Director General of Mineral and Coal Thamrin Sihite said that he has read the presidential instruction and is preparing an action plan as a follow up. He declined to elaborate.

The directorate general has asked governors to coordinate with regents in their regions to resolve overlapping land issues on mining areas, he said.

“This is to give business certainty to the mining companies.”

The government is now processing the verification on mining permits, Thamrin said. “The verification aims to resolve conflicts, which occur due overlapping claims of land.”

Local governments have issued 9,662 IUPs as of mid 2011, according to data from Directorate General of Mineral and Coal. Of these, only 3,778 mining permits have the so-called “clean and clear” status, which means they have all the documents needed, there are no overlapping claims and no legal problems.

Meeting the regulator

Syahrir encouraged members of Indonesia’s Mining Association (IMA) to meet the regulators to convey their concerns and requests for more time and tax incentives to develop smelters.

The complaints from the member of IMA stemmed from overlapping regulations between Law No.4/2009 on mineral and coal and a ministerial decree that was signed on 6 February. Article 174 of the law stated that holders of working contracts have to start smelting process at the latest five years after the law came into effect.

Meanwhile, Article 21 in Ministerial Decree No.7/2012 said that holders of IUP permits issued before the decree are prohibited from selling raw material or ore to other countries within three months after the decree came into effect.

The articles on the ministerial decree are deemed disadvantageous to holders of local mining permits as they include administrative sanctions for any violation. The sanctions include a written warning as well as suspension of smelting, shipping and trading. The government can also revoke operational and production permits. (T03/msw)

By  Algooth Putranto, Vega Aulia Pradipta, Hadijah Alaydrus