Oil, gas bill's revenue sharing plan criticized
Oil, gas bill's revenue sharing plan criticized
JAKARTA (JP): Several academics criticized the oil and gas
bill currently being debated by the House of Representatives for
its unclear revenue sharing formula between the central
government and provincial administrations.
"The bill does not stipulate a clear-cut revenue sharing
mechanism from oil and gas operations to provincial
administrations," Daud Silalahi, a law professor at Bandung's
University of Padjadjaran, said in statement issued at the
conclusion of a one-day seminar held on Friday in the West Java
capital of Bandung.
The seminar on the oil and gas bill, organized by the
University of Padjadjaran, featured a number of noted speakers,
including law professor Bagir Manan, Djuhaendah Hasan, professor
of culture Kusnaka Adimihardja, economist Ahmadi Rilam and oil
technology expert Arsegianto.
The proposed bill states "the government's share and
earnings... are shared by the central and provincial governments
whose sharing formula is determined in accordance with the
existing law".
Daud also criticized the bill for lacking clear protections
for national oil and gas companies amid the domination of foreign
firms, and for failing to promote the role of small and medium-
size businesses and cooperatives in the country's oil and gas
industry.
"The oil and gas bill is still colored with a centralistic
frame of mind. (It) does not contain... democratic views which
put more emphasis on the public's participation (in the oil and
gas sector) in accordance with the sociocultural life of the
community."
The issue of revenue sharing has gained prominence following
protests in several provinces over the allegedly unfair
distribution of revenue between the central government and the
provinces.
People in the natural resources-rich provinces of Aceh, Riau
and Irian Jaya have demanded a greater portion of revenue from
their natural resources. Some people in these provinces are
calling for independence from Indonesia unless their demands are
met.
The gas operation of United States-based Mobil Oil Corp. in
Aceh and the oil operation of PT Caltex Pacific Indonesia in Riau
have been the targets of demonstrations over the past several
months. Local people are dissatisfied with the companies, which
they claim do nothing to improve the welfare of the local
community.
Under the current revenue sharing system, all oil revenue goes
to the central government. From the central government the
revenue then is distributed to the provinces through the state
budget, regardless of the oil contribution of each province.
The House also is debating a government-sponsored bill on
fiscal balance between the central government and local
administrations.
This bill also has sparked criticism for having no clear-cut
revenue sharing formula between the central government and
provincial administrations.
Defending the bill, finance minister Bambang Subianto said
the government would use a separate regulation to determine local
administrations' share of income from natural resources in their
area.
Analysts say the unclear revenue sharing formulas in the two
bills demonstrate the government's lack of commitment in
empowering provincial economies.
They say such a lack of commitment is opposed to moves by the
government to increase the autonomy of provinces.
According to rumors, a major aid donor has pressured the
central government to retain the majority of revenue from natural
resources, particularly oil and gas, to ensure the government
will be able to repay its debt. (jsk)