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resident Susilo Bambang Yudhoyono warned on Tuesday that the growing mining permit problems in the country could become a time bomb if the government failed to find the right solution.

“There are so many problematic mining permits [...] there are thousands, not just merely hundreds. We should fix the problems because they have hampered investment,” the President told a press conference after a limited Cabinet meeting on energy held at state-owned oil and gas company Pertamina’s headquarters in Jakarta on Tuesday.

Ministers attending Tuesday’s meeting included Energy and Mineral Resources Minister Jero Wacik, Trade Minister Gita Wirjawan, Law and Human Rights Minister Amir Syamsudin as well as Coordinating Political, Legal and Security Affairs Minister Djoko Suyanto.

The President said the number of conflicts stemming from problematic mining permits had appeared in several areas across the archipelago. For example, last year, a deadly clash occurred between local residents and a mining company in Bima, West Nusa Tenggara due to uncertainties related to mining permits.

The recent legal conflict involving the government of the East Kutai regency in East Kalimantan and British mining company Churchill Mining that has brought the central government before international arbitration, was another example, the President noted.

Yudhoyono said that the mining permit fiasco was a negative result of regional autonomy, “Surely there are also positive effects [of decentralization], but to be honest, we keep seeing problems emerging in this era of economic reform,” he said.

The empowerment of regional economies created more powerful regional governments, he said. With such power, regents often overissued mining permits, leading to overlapping claims, he said.

“Often, new regents issue new permits [at the same location], which can be a time bomb,” he
added.

During the press conference, the President said that he had decided to give governors, as the heads of each provincial government, broader oversight authority over regents or mayors in the issuance of new mining permits.

The number of mining permits issued has increased sharply since the passing of the new mining law in 2009, which allows regency administrations to issue mining permits in their areas.

Since the implementation of the law, the number of mining permits increased to about 10,250 as of August last year, up from only 597 permits in 2009, according to government data.

One result of the significant increase in the number of new permits being issued was that many mining permits overlapped one another since they were issued without a standard mapping system or the procedures that had been laid out by the central government.

The Energy and Mineral Resources Ministry reported that as of May, there have been 1,029 legal cases to emerge from overlapping mining permits issued by regency-level governments.

According to the ministry’s latest data, of the total 10,566 currently active mining permits, only 4,626 had obtained clean-and-clear status, which indicates mining activities are in line with the government’s environmental policies and that all legal requirements, including those on land usage and taxation, have been met.