Press Release Development Study Forum: Royalties and Cost Calculations for Mining Activities

On June 9 2017, Article 33 Indonesia held a discussion through the FKP (Development Study Forum) at the Swiss-Belresidences Kalibata Hotel. FKP is the result of a consortium consisting of various institutions in Indonesia, in collaboration with the Indonesia Project which is under the auspices of the Crawford School of Public Policy – ANU College of Asia & the Pacific – an institution that organizes a series of research-based policy forums discussing research results related to specific policy topic issues in Indonesia. The institutions that are members of the consortium take turns every month to host the forum. This forum is free and open to the public. For this June, Article 33 Indonesia is hosting this discussion activity. The theme this time is Royalties and Cost Calculations for Mining Activities.
Mining sector royalties have been considered a source of state and regional revenue. The existence of royalties and their long-term nature with a high level of certainty have made the payment scheme by mining companies considered the right step, but has been controversial. Royalty schemes are a burden for entrepreneurs but do not appear to contribute to improving the environment damaged by mining activities.
First speaker Kanti from Article 33 Indonesia pointed out that the government's efforts to increase state revenues from the mining sector have not been accompanied by a balanced study regarding the burden of environmental damage that needs to be addressed, even though more than half of mining permits are in areas with high ecosystem service value.
Meanwhile, the burden of health costs and access to drinking water that must be borne by communities around mining areas will be greater than that borne by communities around non-mining areas, as calculated from health statistical data by the second speaker, Sandy J Maulana from Article 33 Indonesia .
Octa Fredi, a student of the MPKP FEB UI program as the third speaker, explained the method for determining the value of environmental losses that has been recommended in the Minister of Environment Regulation and compared environmental restoration obligations that have been applied to mining companies in other countries.