The Association of Oil and Gas Companies (ASPERMIGAS) has proposed the formation of an agency under the Coordinating Ministry for Political, Legal, and Security Affairs to handle the problem of rampant illegal drilling in a number of Indonesian regions for decades.
This special agency will involve various elements from ammng others the Ministry of Law and Human Rights, the National Police, the Corruption Eradication Commission (KPK), the Indonesian Military (TNI), the Directorate General of Oil and Gas at the Ministry of Energy and Mineral Resources (ESDM), and the Upstream Oil and Gas Regulatory Task Force (SKK Migas).
Investment Committee Chairman at ASPERMIGAS, Moshe Rizal, assessed that this cross-sector collaboration is expected to unite the strengths and expertise of various agencies to solve the problem from the root to the level of field actors.
“The involvement of all parties is needed to ensure that these mitigation efforts run effectively,” Moshe spoke to Indonesia Business Post, on Thursday, October 17, 2024.
He emphasized the importance of firm and systematic law enforcement, similar to the approach of the National Narcotics Agency (BNN) in combating drugs or the Police’s Densus 88 anti-terror squad.
“The agency must be led by law enforcers both the Police and the Prosecutors’ Office,” he said.
Moshe called for the imposition of severe and firm penalties against those involved, including the main perpetrators, financiers, and individuals who support this illegal activity so as to create a deterrent effect and prevent similar violations from recurring.
“There is somebody behind all this illegal drilling, who finances and backs the activities. This is a criminal organization.” he said.
“If this [combat against illegal drilling] is successful, it can be imitated to handle other illegal mining activities, such as illegal tin, gold and nickel mining,” he added, while citing that there are 200,000 people, who earn a living through illegal mining activities.
Moshe proposed the development of alternative economic programs that will provide new skills training and create formal jobs, so that people will no longer resort to illegal activities in order to meet their daily needs.
ASPERMIGAS also emphasized the importance of involving communities living around these illegal drilling locations in supervision measures and educating about the risks and losses caused by illegal drilling.
Moshe cited illegal drilling activities in Musi Banyuasin Regency, South Sumatra, which have been going on since the 1980s, causing Rp49.5 trillion (US$3.2 billion) in state losses and Rp4.87 trillion in environmental damages or losses.
Relinquishment of unexploited work areas
ASPERMIGAS proposed orderly relinquishment of unexploited or under-exploited work areas to regional administrations and related authorities. These areas can be offered back to investors through the Production Sharing Contract (PSC) scheme. The great potential of more complete well and seismic data is expected to attract more capable and bona fide new investors.
