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.