Mon, 20 Aug 2001

Minister targets five new laws in energy and mineral sectors

JAKARTA (JP): Minister of Energy and Mineral Resources Purnomo Yusgiantoro says that he intends to create five new laws, relating to oil and gas, electricity, mining, geothermal and energy resources, during the remaining period of his tenure.

The laws are part of his effort to establish a stronger foundation for the development of the country's mining and energy sectors in the future, Purnomo said.

"Before I leave this office, I hope all the bills will become law," Purnomo told the Jakarta Post in an interview on Thursday.

Purnomo is among the few Cabinet members of former President Abdurrahman Wahid retained by President Megawati Soekarnoputri.

He said the bills relating to the oil and gas, and electricity sectors had been submitted to the House of Representatives early this year and were now being debated by House and government representatives.

Meanwhile, the draft mining law has been completed by the ministry and will be submitted to the House for deliberation after first being approved by the President.

Regarding the bills on geothermal resources and energy, Purnomo said that the House had indicated its intention to draft the bills.

Many investors have called on the government to replace existing laws governing the energy and mineral sectors on the grounds that they are no longer compatible with current economic, social and political conditions, including the government's decentralization policy.

The new oil and gas law will replace the Oil and Gas Law No 44/1960 and the Pertamina Law No 8/1971, while the new electricity and mining laws will replace the Electricity Law No 15/1985 and the Mining Law No 11/1967 respectively.

Under the oil and gas bill currently being debated at the House, the government aims to scrap the decades-long monopoly held by Pertamina within the oil and gas sector and liberalize the country's downstream oil sector, which foreign investors have thus far been prohibited from operating in.

The bill proposes that Pertamina be converted into a limited liability company, while its regulating and management authorities controlling the oil and gas sector be taken over by two independent bodies, a regulating body and an executive body.

Purnomo has repeatedly said the new law will make Pertamina a stronger company, more capable of competing with other organizations in the international market.

Several analysts and legislators have predicted that the bill will be passed into law by the House next month but Purnomo refused to outline any timeframe for the current deliberation process.

Former president BJ Habibie's administration also tried to replace the Pertamina Law, however the proposed bill failed to gain approval from the House due to strong lobbying by Pertamina at the House.

Analysts say that the content of the bill currently being debated at the House has many similarities to Habibie's unsuccessful bill, but the government would easily gain approval from the House on this occasion because Pertamina has not appeared to make any move to oppose the new draft.

The electricity bill currently being debated at the House aims to establish a pricing system for the country's electricity sector based on market competition and gradually lift the decades-long monopoly held by state electricity company PT PLN.

The bill stipulates that the government will form a regulating body to supervise the sector and ensure fair competition. (iwa)