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[KataData] Assumed to only benefit Freeport, Mineral Export Regulations Will Be Challenged

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The Corruption Eradication Commission (KPK) was asked to investigate the potential corruption by law or corruption through regulations in the preparation of this Minister of Energy and Mineral Resources Regulation, especially the clause on export permits and changing KK to IUPK.

A number of community organizations that have come together in the Civil Society Coalition, plan to challenge Ministerial Regulation (Permen) of Energy and Mineral Resources (ESDM) Number 5 of 2017 and Minister of Energy and Mineral Resources Regulation Number 6 of 2017 to the Supreme Court (MA) next week. Because, there are at least nine violations in the new regulations released by the Minister of Energy and Mineral Resources Ignasius Jonan. Moreover, the new regulations are considered to only benefit PT Freeport Indonesia.

Civil Society Coalition Coordinator Ahmad Redi said the government was still providing concessions for raw mineral exports through this regulation. The difference is that currently exports can only be carried out if the mining company changes the status of the work contract to a Mining Business Permit (IUP)/IUPK.

In fact, according to Redi, who is a lecturer at Tarumanegara University, permits to export raw minerals are contrary to the constitution. The 1945 Constitution (UUD) states that the use of earth, water and the natural resources contained therein is used for the greatest prosperity of the Indonesian people.

Second, this regulation is contrary to Law Number 4 of 2009 concerning Minerals and Coal (Minerba), especially Articles 102, 103, 170, and the decision of the Constitutional Court Number 10/PUU-VII/2014. In essence, the regulation contains obligations for domestic processing and refining.

Redi said that Jonan's regulations only benefit Freeport Indonesia. The reason is that the company from the United States has not yet built a refining facility (smelters) in accordance with the mandate of the law. "The change from KK to IUPK perpetuates Freeport," he said at the Civil Society Coalition press conference in Jakarta, Wednesday (18/1).

Third, export relaxation triggers massive and irresponsible exploitation of mineral and coal resources. The coalition noted that from 2011 to 2016 there were additional IUPs from 9,662 IUPs to 10,066 IUPs. Of this number, 3,682 IUPs still have non-clear and clean (no legal basis).

In addition, around 24 percent of companies holding IUPs during 2010-2012 did not have taxpayer identification numbers, 75 percent of companies holding IUPs did not pay reclamation and post-mining guarantee funds. In fact, the company was in arrears in state revenues amounting to IDR 23 trillion in 2016.

Fourth, the relaxation of raw mineral exports has triggered excessive exploitation of natural resources, resulting in environmental damage. Fifth, easing export taps and development obligations smelters has given rise to legal uncertainty.

Sixth, the export policy of concentrates and raw minerals is considered to be able to disrupt efforts to improve and organize IUPs in Indonesia which have been initiated by the Corruption Eradication Commission (KPK), Ministry of Energy and Mineral Resources, together with regional governments and related agencies. One of them is related to controlling IUPs which have not yet carried out the process clean and clear.

Seventh, providing concentrate exports will trap Indonesia back in colonial-style economic activities of exploitation. At that time, natural resources were seen as a commodity and eliminated added value for the country and society.

Eighth, changing KK to IUPK also violates the provisions of the Minerba Law. Determination of State Reserve Areas (WPN) must be approved by the DPR first. Furthermore, the determination to become a Special Mining Business Area (WIUPK) is first offered to BUMN, and if BUMN is not interested, the WIUPK is auctioned to the private sector and then an IUPK is issued.

Ninth, the easing of raw mineral exports and the rules for changing KK to IUPK have the potential to benefit a group of parties and harm the larger interests of the country. Moreover, if Freeport is willing to change the KK into an IUPK.

By changing to an IUPK, Freeport has the opportunity to get the additional benefit of a mining operation period of at least 10 years faster. In fact, the government must start thinking about returning the Freeport mining operation area which will end in 2021 to the state to be managed by domestic parties.

For this reason, the coalition believes that the Corruption Eradication Commission needs to investigate the potential corruption by law or corruption through regulations in the preparation of Minister of Energy and Mineral Resources Regulation No. 5 of 2017 and Minister of Energy and Mineral Resources Regulation No. 6 of 2017. "Specifically related to the clause granting export permits for nickel and bauxite as well as changing KK to IUPK," said Redi.

For your information, the Civil Society Coalition consists of several Non-Governmental Organizations (NGOs), such as Walhi Bangka Belitung, KA-KAMMI, PWYP Indonesia, Energy World Indonesia, JATAM, Indonesia Global Justice, KAHMI, Article 33 Indonesia, PUSHEP, IHCS, LBH Bogor , LBH Depok, FITRA, WALHI NTB. Apart from that, there are several individuals who are observers of the mining sector, such as Berly Martawardaya, Ahmad Redi, Marwan Batubara, Fahmy Radhi, and Yusri Usman.

Anggita Rezki Amelia