Mines ministry too vital to be phased out: Bambang

JAKARTA (JP): The mining and energy sectors, because of their strategic natures, should continue to be overseen by the central government, Minister of Mines and Energy Susilo Bambang Yudhoyono said on Monday.

The ministry should be retained to regulate strategic policies, although it would have to delegate much of its current authority to the regions under the new regional autonomy law, the Army lieutenant general said.

The ministry oversees the oil and gas industries, which generate much of the country's foreign exchange reserves and the government's tax income. It also manages the electricity industry.

While the ministry has transferred supervision of state electricity company PT PLN to the office of the state minister of investment and state enterprises development, it still retains control over Pertamina, the state-owned oil and gas company.

Speaking during a break in a meeting to hammer out the ministry's new vision, mission and strategy, Bambang said the government was studying which activities should continue to be performed by the ministry and which should be delegated to regional administrations.

"We're studying whether oil, coal or gas can be classified as strategic industries," he said.

Regional Autonomy Law No. 22/1999 and Intergovernmental Fiscal Balance Law No.25/1999 empower provinces to manage their own affairs, a task natural resources-rich provinces have been clamoring for.

Bambang defined strategic industries as those which affected the lives of a large number of people or played a major role in the nation's economy.

The Ministry of Mines and Energy is currently drafting bills for the oil and gas sector, the mining sector and the power sector, taking into consideration the two new laws.

The government's decision to delegate only a part of the ministry's authority to the regions stands in contrast to the policy of the Central Investment Coordinating Board (BKPM), which has delegated all of its non-mining and non-finance investment authority to regional BKPM offices.

A number of observers have called for the Ministry of Mines and Energy and the central BKPM to be phased out once the autonomy law comes into effect next year.

Economist Rizal Ramli, however, said the Ministry of Mines and Energy was vital and called for a study on how much authority should be delegated to the regions.

"The government must maintain the ministry since in the mining sector there are some issues that fall under national policy," he said. (03)