Mineral export regulation sparked protests

JAKARTA. The Minister of Energy and Mineral Resources (ESDM) Regulation No 5/2017 on the Mineral Value Added has sparked protests from the Coalition of Civil Societies (Koalisi Masyarakat Sipil).

The coalition consists of PWYP Indonesia, Jatam, Kahmi, Pushep, LBH (Legal Aid) Bogor, LBH Depok, Fitra, Walhi Nusa Tenggara Barat, Walhi Bangka Belitung and Energi World Indonesia. The coalition also includes some law experts, such as Ahmad Redi, Marwan Batubara, Fahmy Radhi, Yusri Usman, and Berly Martawardaya.

The coalition will file a lawsuit to Supreme Court (MA). According to Redi, the exports of crude minerals, such as nickel and bauxite have violated the provision of the Constitutional Court (MK). The institution stipulates that mining company is subject to process and refine the minerals in domestic smelters to be allowed to export the minerals.

The coalition also will question the conversion of contract of work to Special Mining License (IUPK). According to the coalition, the conversion should be carried out gradually. At the initial stage, the status of contract of work should be converted to State’s Reserves Zone (WPN). Later, the status of WPN should be transferred to Special Mining License Zone (WIUPK).

Subsequently, the status conversion will be offered to state owned enterprises (SOEs or BUMN). Should there is no SOE interested, the government may call the privates for bidding. “The status conversion from contract of work to IUPK is legally flawed if it is referring to Law on Mineral and Coal,” he said.

As information, the Minister of ESDM Regulation No.5/2017 is the derivative of the Government Regulation N0. 1/2017 on the Fourth Amendment on Government Regulation No 23/2010 on Mineral and Coal Mining.

National Coordinator of PWYP Indonesia Maryati Abdullah assessed, has inconsistency in terms of mineral and coal mining. “The series of relaxation has prolonged the list of government’s inconsistencies on downstream policy after the issuance of Minister of Energy and Mineral (ESDM) Regulation No. 20/2013, Minister of ESDM Regulation No. 1/2014, and Minister of ESDM Regulation No. 5/ 2016, as well as the issuance of the newest Minister of ESDM Regulation," he said.

Director of Swandiri Institute Kalimantan Barat (West Kalimantan Swandiri Institute) Hermawansyah said, LPEM UI (Economic and Social Research Institute at the University of Indonesia found that the ban on export of mineral has reduced the ilegal mining. The ilegal mining will restore if the government re-opens the crude mineral exports. “We cannot imagine the destructions, as happened in West Kalimantan,” he said.

Secretary General of Ministry of ESDM Teguh Pamudji confirmed that the ministry has consulted with the DPR (the House of the Representatives or Parliament) in formulating the policy. “The status conversion from contract of work to IUPK also does not violate the Law on Mineral and Coal,” he said. Law on Mineral and Coal stipulates, the conversion of ex-contract of work zone to WIUPK does not need to go through consultation with DPR.
Vice Minister of ESDM Arcandra Tahar said, the ministry will not revise the regulation.
(Muhammad Farid/Translator)