Executive Director of the Center of Energy and Resources Indonesia (CERI), Yusri Usman, mulls over suing oil and gas stakeholders for alleged violation of regulations regarding the Local Contents (TKDN) obligations.
He emphasized the importance of the measure to support the growth of an independent national oil and gas supporting services industry.
“If there is no change in policy to comply with laws and regulations by the end of January 2025, we will file a lawsuit against oil and gas stakeholders at the Jakarta District Court, particularly parties directly related to the duties, functions of supervision, and control of TKDN obligations,” Yusri said as quoted in a statement on Monday, January 13, 2025.
Domestic oil and gas supporting service industry is reportedly threatened with bankruptcy, following dozens of other industries that have gone bankrupt, including the textile industry due to heavy import of products, especially from China. This complaint was raised by oil and gas supporting service industry players, who have difficulty supplying products for the development of oil and gas infrastructure in the upstream and downstream sectors.
In fact, the obligation to use domestic products has been regulated in various regulations, such as Law No. 3/2014 on Industrial Affairs, Government Regulation No. 29/2018 on Industrial Empowerment, and Presidential Instruction No. 2/2022 on the Acceleration of Domestic Industry Development.
In addition, technical regulations are also stated in the Regulation of the Minister of Energy and Mineral Resources (ESDM) No. 15/2013, ESDM Minister Decree No. 1953/K/06/MEM/2018, and related Work Procedure Guidelines (PTK) which require oil and gas contractors, State energy company Pertamina, and other state owned enterprises to use domestic products.
Director of Oil and Gas Program Development at the ESDM Ministry, Mirza Mahendra, in a letter dated September 24, 2024, emphasized that oil and gas contractors (KKKS) and providers of goods/services in the upstream oil and gas sector are required to empower domestic goods and services in accordance with applicable regulations.
This is also supported by the Domestic Production Appreciation Book (APND) published by the Directorate General of Oil and Gas at the Ministry of Energy and Mineral Resources. Yusri hopes that the government will immediately take concrete measures to ensure compliance with TKDN regulations. Otherwise, CERI will proceed with the planned lawsuit to demand justice and prevent the destruction of the national oil and gas supporting services industry.
