Govt drafts rules on mining authority under autonomy law
JAKARTA (JP): A regulation on the delegation of authority in the mining and energy sector is being prepared to support the implementation of the autonomy law, a senior minister said here on Tuesday.
Minister of Mines and Energy Susilo Bambang Yudhoyono said here on Wednesday that such a regulation was necessary to prevent misunderstandings among the central, provincial and regency governments.
"This regulation is also important to ensure legal and business certainty to investors," Bambang said in a press meeting discussing the ministry's new vision, mission and strategies for the next five years.
The minister said that the regulation would serve as the basis for the implementation of the autonomy law in the mining and energy sector.
Under autonomy as regulated in Law No. 22/1999 on Regional Administration and Law No. 25/1999 on Intergovernmental Fiscal Balance, regions will manage their own affairs.
Last month, Bambang said that despite the region's greater autonomy, the ministry would retain control over important industries affecting the nation's economy.
Under the draft regulation, the ministry would delegate a portion of its authority to provinces and further down to regencies and/or mayoralties.
Provincial administrations will, for example, issue mining permits on core activities such investment, exploration and production in overlapping areas in regencies and/or mayoralties, and at sea within 12 sea miles of their coasts.
Provinces will also plan and control the use of mining and energy natural resources, including the implementation of environmental audits.
They would also train and allocate human resources as well as conduct geological, mineral and energy researches.
Whereas mayoralties and regencies would receive the authority to issue permits on mining core businesses, limited to their respective regions and up to four sea miles of their coasts.
Permits for general oil and natural gas core businesses would also fall under the regency and mayoralty authorities.
Regencies and mayoralties would issue permits on oil and natural gas core businesses within their regions. No explanation was available to specify the range of oil and natural gas core businesses.
The central government, however, would still regulate the use of mineral resources, energy and below earth water reservoirs on a national scale.
It would also regulate contractual terms, mining fees and geographic surveys on mineral resources and energy.
The ministry would handle the regulation of related high technologies and the development of research in the mining and energy sector.
Regulations on fuel, compressed natural gas and natural gas assets would remain under the ministry's authority, including regulations on state income and subsidies.
On the implementation level, the central government would issue permits on main oil and gas core businesses, covering exploration, exploitation, construction of refineries and pipeline transportation of oil and gas.
The ministry would issue permits on electricity core businesses covering cross-province development of transmissions and operation/distribution systems.
It would oversee the implementations of macro policies in the mining and energy sector including setting domestic prices on electricity, fuel, natural compressed gas and natural gas.
The central government will regulate and supervise information systems on mineral and energy resources, and explorations at the outer limits of the Indonesian continental shelf.
It will regulate technical guidance on mining and energy enterprises, human resources, and regulate safety procedures for the mining and energy industry, which include the general safety of electricity workers. (03)