Government to soften stance on Freeport

JAKARTA. PT Freeport Indonesia’s threat to file a lawsuit against the Government of Indonesia seems to be effective. Suddenly, Ministry of Energy and Mineral Resources (ESDM) claimed to restore Freeport’s license to export coal and gold.

In fact, the government had released regulation, which stipulates that contract of work holders, including Freeport, are required to change the status of contract of work to special mining incense (IUPK) to be allowed to export concentrates. The export license would also be adjusted with the company’s compliance in constructing smelter.

According to Minister of ESDM Ignasius Jonan, Freeport would be granted the license for its good intention to convert the contract of work status to IUPK. “We will issue temporary IUPK as the export recommendation. The temporary IUPK would be issued within one or two days ahead,” Jonan said, Monday (30/1).

According to Jonan, the status of permanent IUPK takes time to be granted. Let alone, Freeport demands two conditions for the status conversion, namely the contract extension until 2041 and the flat tax tariff. “The IUPK takes three to six months to be proceeded. The export interruption may distract local economy and create massive unemployment,” Jonan said.

However, Ministry of ESDM has not set the scale of export for Freeport. The last export license granted Freeport an export volume of 1.4 million ton per month.

The Spokesman of Freeport Indonesia Riza Pratama said that Freeport is ready to cooperate. “We are cooperative to sustain the exports and operations,” he added.

According to Natural Resources Law Observer at Tarumanegara University (Untar) Ahmad Redi, the temporary IUPK is legally flawed, on the grounds that the Law on Mineral and Coal does not recognize the temporary IUPK. “Law No 30/2014 on the Government Administration stipulates that granting discretionary is prohibited if it is contrary to law.

Director of Center for Indonesian Resources Strategic Studies (Cirrus) Budi Santoso also reminds that the existing Minister of ESDM Regulation No 5/2017 on the Enhancement of Minerals Value Added through Domestic Processing and Refinery, as well as Minister of ESDM Regulation No 6/2017 on the recommendations for export of processed and refined minerals do not recognize the temporary IUPK.

(Muhammad Farid/Translator)