Govt proposal on royalties' split gets widespread supports<\/p>\n
JAKARTA (JP): Minister of Mines and Energy Kuntoro
\nMangkusubroto's proposal to split the government's royalties from
\nmining, oil and gas operations with the producing provinces has
\nreceived widespread support from legislators.<\/p>\n
F.X. Soejitno of the Armed Forces faction and Djusril Djusan
\nof the Golkar ruling party agreed yesterday with Kuntoro that the
\ncountry should have a law to allow provinces to get part of the
\nroyalties from the development of their natural resources.<\/p>\n
But, they said, such a law should also leave the central
\ngovernment sufficient royalties to finance the development of
\nprovinces with fewer natural resources.<\/p>\n
\"Indonesia is a unitary state, not a federal state. Provinces
\nwhich lack natural resources, like West Sumatra and Nusa
\nTenggara, should also be given chances to develop along with
\nthose rich in natural resources,\" Djusril said.<\/p>\n
Soejitno said such a law should appease the growing protests
\nfrom people in several provinces who are demanding a part of the
\nearnings from oil, gas and mining operations in their regions.<\/p>\n
\"I think protesters in such remote provinces like Aceh and
\nIrian Jaya are not actually demanding political separation. They
\nare only demanding that the central government give them a fair
\nshare of the earnings from their areas,\" Soejitno said.<\/p>\n
Soejitno said House Commission VIII for the state budget and
\nscience and technology was preparing a bill on the balancing of
\ncentral and provincial finance which would, among other things,
\nregulate the sharing of royalties from mining, gas and oil
\noperations between the central and provincial administrations.<\/p>\n
Protests have been raised for years by people in several
\nprovinces about the fact that they do not receive part of
\nearnings from the development of natural resources.<\/p>\n
The protests have intensified since the downfall of Soeharto,
\nwho paid little attention to the complaints.<\/p>\n
Some government critics are now warning about possible
\nnational disintegration if the central government does not heed
\nthe provinces' demands.<\/p>\n
Under current production sharing contracts (PSC) with oil and
\ngas contractors, the government receives between 75 percent and
\n90 percent of their output.<\/p>\n
Under current contracts of work (COW) with mining contractors,
\nthe government receives taxes and royalties.<\/p>\n
The earnings from oil and gas operations, as well as tax and
\nroyalties from mining companies are at present pooled into the
\nstate budget and then distributed to the provinces with little
\nregard to their contribution to the state budget.<\/p>\n
Furthermore, provincial administrations only receive half of
\nthe land and building tax with all other taxes going wholly to
\nthe central government.<\/p>\n
Kuntoro said his ministry had made a regulation which obliged
\nthe holders of mining contracts signed since 1995 to send 80
\npercent of the royalties to local authorities and only 20 percent
\nto the central government.<\/p>\n
But the regulation has not been implemented because it is in
\nconflict with another governmental regulation requiring that the
\nroyalties be delivered to the central government before being
\nredistributed to the provincial administrations.<\/p>\n
Soejitno said the 80 percent-20 percent split was fair enough
\nand could be applied to other sectors like oil and gas. (jsk)<\/p>",
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