Mining powers transferred to provincial administrations

JAKARTA (JP): Central government will authorize some provincial administrations to supervise the mining industry in their respective areas on a temporary basis, as the regencies there are thus far considered not ready to carry out the job, a senior official of the Ministry of Energy and Mineral Resources has said.

Under Autonomy Law No. 22/1999 and the Intergovernmental Fiscal Balance Law No. 25/1999, both of which took effect as of Jan. 1 this year, regency administrations took over mining supervision from central government.

But, Wimpy S. Tjejep, the director general of geology and mineral resources, said many regencies were not yet ready to take over mining supervision due to lack of skilled human resources and modern infrastructure.

"In such a situation, the supervision of the existing mining contracts will be carried out by the provincial administrations on behalf of the central government," Wimpy said Monday evening following a business dinner entitled "Indonesian Mining Policy in the Era of Regional Autonomy. Resolving the Uncertainties", organized by mining and oil news provider Petromindo.Com.

The implementation of regional autonomy has caused confusion among mining investors given the fact that the autonomy law is in conflict with previous Mining Law No. 11/1967 that gives the central government the right to manage the mining industry.

Mining investors are also concerned with the fact that many regencies lack skilled human resources and modern infrastructure to carry out the supervision.

Some 20 foreign and local mining companies have reportedly suspended their operations, citing the uncertainties arising from the implementation of the autonomy law.

Many banks have also reportedly declined to channel loans to mining firms wishing to invest in the country for similar reasons.

Wimpy said the government's policy to give the provinces rights to supervise the mining industry was expected to be able to address the investors' concerns.

"So far, there is no problem. We hope the regency administrations can accept the policy," Wimpy was quoted by Antara as saying.

Wimpy did not name the provinces that will be authorized by the government to carry out the mining rights.

Legislator Emir Moeis, who is a member of the House of Representatives Commission VIII for environmental, science and technology affairs voiced support for the government's policy.

"The policy has a positive goal. It is the best solution for the transition period," he said.

Under the autonomy law, regencies can issue mining permits and regulations and receive 80 percent of mining royalties. (03)