Constitutional Court Rules Mining Permits for Mass Organisations Cannot Be Directly Appointed, Bahlil Prepares Derivative Regulation

Jakarta, CNBC Indonesia - Minister of Energy and Mineral Resources (ESDM) Bahlil Lahadalia has stated that his ministry plans to issue a derivative regulation following the Constitutional Court’s (MK) ruling that the granting of Mining Business Permits (IUP) to cooperatives, MSMEs, and religious mass organisations (Ormas) cannot be done through direct appointment. According to Bahlil, the regulation will take the form of a Ministerial Regulation (Permen) or Ministerial Decree (Kepmen). He confirmed that the MK ruling does not eliminate the phrase ‘priority offering’, but rather requires that the granting of permits be carried out through a more transparent mechanism. ‘In the MK decision, it is stated that the priority offering remains. Appointment does not necessarily mean it must be without a mechanism; there are rules, so we will create a derivative regulation in the form of a Permen or Kepmen. So priority is still given. It does not cancel the priority, but the governance must be improved so that the principles of transparency and accountability are truly implemented,’ Bahlil said at the State Palace. ‘And I think what the MK decided is good, because we all want transparency,’ he added. The Constitutional Court officially ruled that the granting of Mining Business Permits (IUP) to religious mass organisations and MSMEs cannot be done through direct appointment. The decision aims to ensure the mining permit process follows fair procedures. This follows a judicial review of the phrase ‘priority offering’ for mass organisations, universities, and cooperatives as stipulated in Article 51 (1) and Article 60 (1) of Law Number 2 of 2025 concerning the Fourth Amendment to Law Number 4 of 2009 on Mineral and Coal Mining. The MK ruling, registered as Decision Number 160/PUU-XXIII/2025, stated that the phrase ‘priority offering’ in the Mineral and Coal Mining Law cannot be interpreted as an automatic right to obtain a permit without a strict procedure. The court emphasised that the priority offering must be based on clear parameters through an objective, transparent, and accountable assessment process to prevent the mechanism from being misunderstood as a direct appointment that ignores proper selection standards.