Mining firms in limbo under regional autonomy<\/p>\n
JAKARTA (JP): Six months after the implementation of regional
\nautonomy, unprepared local governments have left mining firms
\nadrift in legal limbo, the Indonesian Mining Association (IMA)
\nsaid on Wednesday<\/p>\n
IMA executive Kosim Gandataruna said in a report to
\nlegislators that the decentralization of powers over mining came
\ntoo quickly and lacked preparation.<\/p>\n
"As a consequence of this hastiness, a legal vacuum has
\nemerged and with it the investment climate has deteriorated,"
\nKosim said at a hearing with House of Representatives' Commission
\nVIII, which among other things overseas mining affairs.<\/p>\n
Regional autonomy is based on two 1999 laws that gave the
\ncountry's regions greater authority to manage their own
\nadministrative and financial affairs.<\/p>\n
Foreboding the impact they have had on the mining sector,
\nmining firms had warned the government against decentralizing
\nmining powers to unprepared regions.<\/p>\n
In response, the government promised to grant only prepared
\nregions full autonomy over the mining sector.<\/p>\n
But no presidential decree regulating this requirement has
\nbeen issued to date.<\/p>\n
Mining firms were also facing new fiscal regulations that
\nimposed numerous levies as local administrations tried to raise
\nas much local revenue as possible.<\/p>\n
"The cumulative effect of all this is stagnation, or even
\ndramatic regression in the exploration, development and
\nexploitation of Indonesia's mineral resources," he said.<\/p>\n
The IMA's bleak prognosis for the mining industry came after
\nsome 20 foreign and local mining firms were reported earlier this
\nyear to have stopped prospecting.<\/p>\n
The association has blamed this development partly on the
\nlegal uncertainty created by an obsolete mining law.<\/p>\n
Kosim said the government must replace the present central-
\nadministration-orientated Mining Law No. 11 of 1967 with a new
\none reflecting the decentralized industry.<\/p>\n
Legal uncertainties also led to security problems as law
\nenforcement deteriorated, he added.<\/p>\n
Security threats arose from various sources such as demands
\nfor land compensation payments, environmental problems and labor
\ndisputes.<\/p>\n
Giant coal miner PT Kaltim Prima Coal in East Kalimantan has
\nbeen unable to maintain production at its normal rate due to a
\nseries of blockades by its workers and local residents.<\/p>\n
Meanwhile, the activities of illegal miners have been
\ninterfering with the mining operations of gold mining company PT
\nAneka Tambang in West Java, as well as a number of coal mining
\ncompanies in East Kalimantan.<\/p>\n
Kosim said the reform era had brought to the surface public
\ndemands for more transparency, greater revenue sharing, more
\nlocal participation in the mining sector and better community
\ndevelopment programs.<\/p>\n
He also urged the government to improve the quality of its
\nhuman resources both at the local and central levels.<\/p>\n
The government should review the existing regulations in the
\nforestry, fiscal and environmental sectors that impacted upon the
\nmining industry, he added.<\/p>\n
"A comprehensive overhaul has to be carried out simultaneously
\nand within a short space of time to restore the conducive
\nconditions that have proven to be the key to the rapid
\ndevelopment of the mining sector over the past three decades," he
\nsaid.<\/p>\n
Among these success factors were Indonesia's mineral wealth,
\npolitical and social stability, law and order, and a conducive
\ninvestment climate, he said.<\/p>\n
Another IMA member, Bob Parsons, suggested that the government
\nremove the mandatory divestment requirements from future
\ncontracts of work with foreign mining firms.<\/p>\n
"The foreign investor puts in the money up front and takes all
\nthe risks, and then once the risk has been taken they find
\nthemselves in a position where they have to divest. That's not an
\nattractive set of rules," he explained.<\/p>\n
He said that this requirement was not necessary as it only
\ndiscouraged new investment in the highly risky mining industry.<\/p>\n
According to him, the host country should focus on tax
\npayments, job creation and community development by mining
\ninvestors. (bkm)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/mining-firms-in-limbo-under-regional-autonomy-1447893297",
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