The bauxite mine in West Kalimantan, which was stopped because it could not export raw minerals, and was required to have a smelter, does not rule out the possibility of opening and exporting raw materials again with this change in regulations. Photo: Aseanty Pahlavi
The government has issued two new regulations on January 12 2017, namely, Minister of Energy and Mineral Resources Regulation (Permen ESDM) Number 5 of 2017 concerning increasing the added value of minerals and Minister of Energy and Mineral Resources Regulation Number 6 of 2017 concerning procedures for providing recommendations and requirements for recommendations for foreign sales of minerals. country. These two regulations are seen by various groups as a form of government subjugation to businessmen by actually relaxing the raw mineral export policy for five years. Around 20 environmental activists, experts and civil society organizations are members of the Civil Society Coalition to Guard the Constitution on Natural Resources, urging the government to cancel the two regulations. In fact, they are now preparing materials to challenge this regulation.
Natural Resources Law Expert from Tarumanegara University Ahmad Redi in Jakarta, Wednesday (18/1/17) said, this regulation is very tendentious and has the potential to conflict with the Mineral and Coal (Minerba) Law and even the constitution.
"The legal argument is clear that Articles 102 and 103 of the Minerba Law stipulate that every IUP and IUPK holder is obliged to restore and purify them domestically. Increased added value for products, employment, development of domestic industry, state revenue and so on. "There should be no more raw mineral exports," he said.
Even the Constitutional Court, in decision number 10 of 2014, said Articles 102 and 103 of the Minerba Law were constitutional. Previously, this article was challenged at the Constitutional Court by the Indonesian Mineral Entrepreneurs Association (Apemindo) and other mining companies on the grounds that if raw mineral exports were prohibited, there would be many layoffs. The MK did not grant the request.
"Actually, there is no longer any legal reason for the government to provide relaxation."
Five years since the Minerba Law came into force, he said, work contract holders are obliged to restore and refining them domestically. Unfortunately, violations continue to occur. First, when the Minister of Energy and Mineral Resources Jero Wacik issued Minister of Energy and Mineral Resources Regulation number 1 of 2014, namely, granting three-year export permits to IUP holders and work contracts.
With various requirements such as guaranteed growth, commitment to building a smelter and so on. In fact, until now it is not clear. In 2017, this was not implemented and then there was another relaxation for five years with the same requirements. "There are 10% export duty obligations, smelter construction and so on," he said.
By issuing these two regulations, it seems as if the government is inconsistent and flouting the law. Moreover, it is clear that changing the CoW to a special mining business permit (IUPK) has the potential to perpetuate large mining operations such as PT Freeport with mechanisms that do not comply with the Mining and Coal Law.
"There is a tendency to secure, provide comfort for Freeport even though the company has many violations."
He said that the 2011 divestment of Freeport shares should have been 51%, but until now this has not happened. The government is predicting that it will take over the freeport, even though the smelter obligation alone is not working.
When the government wants to buy shares, he said, the price is very expensive. “We are not anti-foreign investment, but we must be fair. "If it only damages the environment, it has the potential to exacerbate social conflict in Papua, in my opinion it should be considered."
Indonesian Publish What You Pay (PWYP) Coordinator Maryati Abdullah highlighted current mining governance. Natural wealth, he said, is very important to increase the added value of the domestic economy. It can also provide employment opportunities and increase state revenues in the long term. So, he said, the fiscal deficit excuse used by the government in issuing these two regulations is illogical.
“This relaxation is a latent danger. We are faced with the demands of a global market where there is still high demand for raw materials. There is also unpreparedness on the government's side. The political process is not going well. If you want to relax and go against the mandate of the law, you should revise the law or issue a Perppu. "Not by issuing two regulations which are actually full of intervention," he said.
Technical regulations in the form of regulations are not enough to simply revise the three main articles (102, 103 and 170) of the Minerba Law. Namely articles 102,103 and 170.
Based on PWYP records, there are 6,541 IUPs, 3,041 IUPs for production operations. Around 2,500 IUPs still exist non-clear and clean. There is an obligation for them to build processing and refining industries within the country. Unfortunately, many are not ready to build smelters, there are fundamental problems such as overlapping with conservation forests, not paying taxes, not having NPWP, not paying reclamation guarantee funds and so on.
"I think this fundamental problem has begun to be addressed by the Corruption Eradication Commission together with the Ministry of Energy and Mineral Resources and the regional government."
On the other hand, some industries are ready to build smelters. Since the end of 2016, there are 26 smelters ready. “Antam has built a smelter. About 34 should reach the ready-to-operate phase. The government must pay attention to this."
Yusri Usman from the Center of Energy and Resources Indonesia said that at the start of Joko Widodo's administration, he had high hopes regarding the implementation of the downstream process for the mineral and coal industry. However, he said, facts are different from promises.
"Based on the facts I found, both the contents of the PP and the ESDM regulation are clearly and clearly in conflict with the Mineral and Coal Law. It is clearly proven that the government is losing to foreign corporations. In fact, the contents of all the changes to the PP and the candy do not strengthen the law, they actually weaken it. "The government has violated the law," he said.
By issuing these two regulations, the government has actually discriminated against mining companies that have built smelters. This company should be protected by the government, not accommodating large mining companies which actually have many violations.
Murdani, Executive Director of Walhi West Nusa Tenggara (NTB) said that the Minister of Energy and Mineral Resources Regulation was issued to worry in the midst of crazy mining exploitation.
"Portrait around the mine, people living in poverty."
The two pieces of candy, he said, were an attempt by the government to deny the constitution they had made themselves. He assessed that the losses would appear to be much greater than the government's profits from tax and non-tax revenues.
According to Nurdani, before revising the regulations, the principal thing the government should do is an environmental audit of both the CoW and other mining permits. The goal is to measure the mining capacity and environmental support of the mine.
“This aspect is almost not part of the government's considerations. "Not to mention the issue of welfare and justice for the communities around the mine," he said.
![[Mongabay] Longgarkan Ekspor Mineral Mentah Pemerintah Dinilai Tak Konsisten Jalankan UU, Begini Sikap Pakar dan Pegiat Lingkungan](../../../../media/upload/users/5549bc9cc1742281138b4567/images/chris38.jpg)
Forests in Morowali are deforested for nickel mining. Dredging has stopped since the ban on raw mineral exports. There are several companies that are preparing smelter plants. With this relaxation in exporting raw materials, it is not impossible that the demolition of forests and land for mining without paying attention to the environment will again be massive. Photo: Christopel Paino
Danger sign
Article 33 Extractive Industry Division Coordinator Ermy Ardhyanti said that the change from KK to IUPK resulted in companies being able to mine in state reserved areas which contain strategic and conservation mines.
“This is a danger sign, we must pay attention to it. "Giving back the extension of raw mineral exports, the Indonesian mining paradigm goes back to the 16th century, when Portuguese sailors came and took our gold."
When the Minerba Law was issued, there was a clause that there had to be domestic refining, he said, which was actually a step forward. With endless relaxation, the government became inconsistent in implementing the law and it was only annulled through a regulation. "So this is a violation of the law by candy."
He quoted the Ministry of Environment's 2013 research on Net Capital Value or Natural Capital. Based on this research, Indonesia is actually more profitable if it doesn't mine. “The escalation of damage to the mining environment is so acute. "The losses far outweigh the benefits in terms of economic growth, taxes and state revenues."
Debby Manalu, Jatam campaigner, said that the release of the two candies shows that the government is afraid of companies.
Hermawan Eriadi from the Alumni Family of the Indonesian Muslim Student Action Unit said that these two pieces of candy were considered sudden. The lobbying is not from civil society or BUMN but outside.
“The lobby is strong. "After it came out, civil society, including academics, were called and asked for their opinion to approve the candy."
File a lawsuit
Civil society organizations plan to submit a judicial review of this regulation. “There are 20 affiliated institutions that are participating in submitting material tests. Not only individuals, national figures are ready to join. "The government must defend the people, not defend unfair foreign companies," said Ahmad.
Now, the legal team is finalizing the lawsuit materials. They are collecting information from legal, environmental, economic and other experts. “It will be attached to the lawsuit materials. "There have been three experts who have provided written statements."
Bisman Bakhtiar, Executive Director of the Center for Energy and Mining Law Studies (PUSHEP), said the same thing. He said that a judicial review at the Supreme Court was the right moment.
Legal certainty, he said, is almost non-existent, including in the mineral and coal mining industry.
"Almost all KESDM regulations specifically for the Director General of Minerals and Coal always cause problems. This problem causes the state, people and mining industry players to suffer losses. "As a result of this expensive legal certainty, there are many economic, political, legal, environmental and other losses," he said.
Executive Director of Indonesian Resource Studies (IRESS) Marwan Batubara said, the lawsuit judicial review relevant because the Minerba Law has been canceled with lower level regulations, namely PP and candy.
He is worried that if the PP leaves, conditions will actually get worse because of the relaxation of raw mineral exports for five years. According to him, foreigners will try in various ways to prevent Indonesia from building smelters.
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