PSCs want more freedom, BP Migas wants to keep authority

PSCs want more freedom, BP Migas wants to keep authority

Riyadi Suparno, The Jakarta Post, Yogyakarta

The atmosphere at a weekend meeting between upstream oil and
gas authority BP Migas and production sharing contractors (PSCs)
was that of PSC executives trying to secure more freedom, while
BP Migas officials worked to keep their authority intact.

The main point of contention between the two sides were four
standard operating procedure drafts on community development
(CD), community relations (CR), public relations and providing
information in emergency situations.

In all four of the drafts, BP Migas requires PSCs to get
clearance from it before executing any programs.

In the drafts on community development and community
relations, for instance, all programs must be approved by BP
Migas, and their implementation conducted only after receiving
clearance. The PSCs also must file regular reports with BP Migas.

Any failure to observe these procedures would put the PSCs at
risk of losing money, as the costs of the programs would no
longer be recoverable under a cost recovery scheme.

Some PSCs' general affairs executives attending the two-day
meeting here expressed concern over the rigidity of the drafts on
community development and community relations.

The draft on community development, for example, demands that
all of the programs go through BP Migas, while in reality the
PSCs deal mostly with local people and administrations.

The draft regulations on public relations and providing
information in emergency situations, the PSCs are not allowed to
release any information to the media without prior approval from
BP Migas.

All information must be provided by BP Migas or PSC officials
only after getting approval from BP Migas. This also applies to
emergency situations such as oil spills, bombings, terrorist
attacks and even labor actions.

A number of PSC general affairs officials expressed disbelief
over the limitations placed on the dissemination of information,
especially as the country enjoys unprecedented levels of freedom
of expression.

The draft regulation on public relations even governs
seemingly insignificant matters. For example, the appointment of
a public relation consultant must be approved by BP Migas.

Officials at BP Migas have answers for all of these concerns.

On the appointment of public relations consultants, for
example, one BP Migas official said he was disappointed when he
found one PSC had hired an expatriate public relations
consultant.

"Should we hire an expatriate to do work that we know better,
such as public relations?" he said.

The general answer for all the concerns was given by Bangun
Usman Harahap, deputy chairman for general affairs at BP Migas.

Bangun reminded all participants of the meeting that BP Migas
was the only institution with the authority to monitor and
supervise the operation of the PSCs.

In addition, the oil and gas sector remains under the control
of the central government, therefore local administrations cannot
make final decisions on any PSC operation, including community
development and community relations programs.

Apparently dissatisfied with this response, one representative
of the PSCs raised the issue of the contractors being given more
freedom during a session with Minister of Energy and Mineral
Resources Purnomo Yusgiantoro.

"We have one request, Mr. Minister. Could you give us more
freedom to govern ourselves and to work with any party whom we
consider necessary," the representative said to the minister, to
the applause of other participants.

When the minister asked for other questions or requests, one
of the participants said, "That one request is enough for us."

The minister responded that the request would have to go
through BP Migas. "I will ask Pak Bangun to report to me if the
request can be met."

BOX

Main points of BP Migas' draft regulation on Community
Development

* Mission of Community Development: Community Development
programs aim to support the smooth operation of PSCs and to help
the government empower the people through partnership.
* Goal: To improve the social and economic productivity and
capability of people living in the PSCs' operation areas.
* Community Development principles: Community Development must
not be given in the form of cash; every Community Development
program and its implementation must be approved by BP Migas;
Community Development programs may not be designed based on
political, ethnic or religious considerations.
* Stages of Community Development: Collecting information on the
people's needs; drafting indicators of success; analyzing real
and potential needs for Community Development programs; putting
Community Development programs in the Work, Program and Budget
planning; implementing Community Development programs, with PSCs
given authority to spend up to Rp 100 million for these programs;
filing monthly, half-yearly and yearly reports to BP Migas on the
implementation of Community Development programs.
* Priority of Community Development programs: People directly
affected by PSCs' operations (up to 15 kilometers from the point
of PSCs' activities) and, secondly, people indirectly affected by
PSCs' operations.
* Sanctions: If BP Migas finds irregularities in the
implementation of Community Development programs (not in
accordance with BP Migas guidelines), the costs for said programs
will be declared unrecoverable under the cost recovery scheme.