Friday, April 19, 2024

Energy Ministry delegates authority to Investment ministry to revoke mining permits

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Gusty da Costa




The Ministry of Energy and Mineral Resources (ESDM) has defended that the Ministry of Investment /Investment Coordinating Board has the authority to revoke mining business permit as regulated in an ESDM Ministry regulation. 

Minister of Energy and Mineral Resource Arifin Tasrif said that his ministry had delegated the authority to the ministry of investment/investment coordinating board to revoke mining business permits that have failed to fulfill their obligations, experienced bankcruptcy and had criminal issues. He cited Article 3 of the Energy and Mineral Resources Ministry Regulation No. 5/2015 on the Task Force on Structuring, Land Use and Investment which stipulates that the decision to revoke those permits are based on the recommendation of Energy and Mineral Resources Ministry as one of the members of task force. 

“We have stated that the 2,078 revoked Mining Business Permits were those that did not meet the requirements both from operational and environmental considerations. So, that is what is currently happening,” Arifin told a hearing with the House of Representatives on Tuesday, March 19, 2024. 

Besides revoking the Mining Business Permit, the Energy and Mineral Resources Ministry has also delegated the authority to the Ministry of Investment/Investment Coordinating Board to activate permits. 

Arifin said, to revive a permit, there are some requirements that should be met by mining companies.

“What we have is the data that existed at the time. So previously the permits were issued by the regional administrations. However, based on Law No. 3/2020,

everything was referred back to the Central Government. So, we used the data that we obtained at that time, which was from the regions, as a reference for revoking the permits. Even then, we give time for reconciliation, so they are still given the opportunity to provide reasons the reasons. If the reasons are strong, the permits will be reactivated,” Arifin said. 

The Mining Advocacy Network (Jatam) has accused Minister of Investment/Head of the Investment Coordinating Board (BKPM) Bahlil Lahadalia of fraudulent practices by setting tariffs or fees for mining companies seeking reinstatement of their rescinded licenses. 

The polemics over the mining licensing began in May 2021, when President Joko “Jokowi” Widodo issued Presidential Decree No. 11/2021 on the Investment Acceleration Task Force. 

“Through this Presidential Decree, Jokowi appointed Bahlil as Head of the Task Force with the main task of ensuring investment realization and resolving licensing issues. The decree also allows Bahlil to track unproductive mining and plantation permits,” Melky Nahar, Coordinator of JATAM, said in a discussion on Monday, March 18, 2024.  

In January 2022, Jokowi issued Presidential Decree No. 1/2022 on Land Management and Investment Structuring Task Force. This decree mandated Bahlil to chair the Task Force, whose tasks include revoking mining permits, business use rights, and forest area concessions as well as providing facilities for community organizations, cooperatives, and others to obtain land.

In October 2023, President Jokowi issued Presidential Regulation No. 70/2023 on Land Allocation for Investment Arrangement, which authorizes the Task Force led by Bahlil to also revoke mining permits, plantations, and forest concessions, as well as grant land utilization permits for mass organizations, cooperatives and others.

Along the way, the Task Force has revoked 1,118 Mining Business Licences (IUP) and 15 Forest Area Utilization Permits (IPPKH). These permits are part of the 2,078 IUPs, 192 Forestry Sector Permits (ISKs), and 34,448 hectares of abandoned plantation cultivation permits (HGUs) that President Jokowi announced in January 2022.

Gusty da Costa






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