Constitutional Court: Mining Permits for Universities and Ormas Cannot Be Direct Appointments

The Constitutional Court (MK) has ruled that the granting of Mining Business Permits (IUP) to universities, cooperatives, and religious community organisations cannot be conducted through direct appointment. The court stated that the priority allocation of mining permits must be based on clear, objective, transparent, and accountable parameters.

This is stipulated in Decision Number 160/PUU-XXIII/2025 concerning the material review of Law Number 2 of 2025 on the Fourth Amendment to Law Number 4 of 2009 on Mineral and Coal Mining (Minerba Law). The petitioners, including Abdullah Faqih, Pendi, Abdullah, Iqro Katsir, Alif Alvian, and Mawaddi Hamid, challenged the phrases ‘by way of auction’ or ‘by way of priority’ in the granting of mining business permit areas (WIUP) for mineral and coal to business entities, cooperatives, and organisations owned by religious groups. They argued that the provisions created legal uncertainty and injustice, preventing the utilisation of mineral and coal resources for the greatest prosperity of the people as mandated by the 1945 Constitution.

The court partially granted the petition. Constitutional Justice Enny Nurbaningsih stated that the priority mechanism for granting permits must be accompanied by clear parameters through an objective, transparent, and accountable assessment process, rather than direct appointment. She cautioned that without clear parameters, subjectivity could dominate, leading to increased environmental damage. The court also noted that while the constitution does not prohibit universities from engaging in profit-oriented activities, their involvement must remain within the framework of the tridharma—education, research, and community service—and not as direct business managers. The court warned that direct management of mining operations could cause universities to lose their strategic position as guardians of national morality and environmental sustainability.

Chief Justice Suhartoyo, reading the verdict, declared that the phrase ‘by way of giving priority’ in several articles of the Minerba Law is conditionally unconstitutional and lacks binding legal force unless interpreted as ‘a priority mechanism that can only be granted with clear parameters through an objective, transparent, and accountable assessment process, so that the granting of priority is not understood as a direct appointment.’ The ruling also applied the same conditional interpretation to the phrase ‘receives priority’ in Article 75 paragraph (3) of the law.