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Jakarta Post

New law scraps local govts'€™ power in mining

  • Raras Cahyafitri

    The Jakarta Post

Jakarta   /   Mon, October 6, 2014   /  10:35 am

The new Provincial Administrations (Pemda) Law scraps local administrations'€™ power to issue mining permits, overlapping the 2009 Mining Law, which is likely to be revised.

The Mining Law grants local administrations rights in the mining sector, including issuing permits for mineral and coal mining activities.

However, the Pemda Law has removed all authorities previously granted to regency and municipal administrations. Thus, control over mineral and coal businesses will be in the hands of central and provincial governments.

Both contradicting laws will remain in effect unless one of them is called off, according to law expert Todung Mulya Lubis.

'€œIf one law takes away authority while the other law doesn'€™t do the same, we cannot say that the authorities [of a regency and municipality] have been withdrawn, unless the Mining Law is amended. This shows that we have no clear policy to avoid this overlap,'€ Todung said.

It was up to the government to amend articles in the Mining Law, Todung said.

The House of Representatives passed late last month the Pemda Law, along with the controversial Regional Elections (Pilkada) Law, which scrapped the direct election of regional heads.

Outgoing President Susilo Bambang Yudhoyono issued last week two government regulations in lieu of law (Perppu) to protect direct elections and the local administrations'€™ authorities.

But the Perppu, which will need approval from the House, did not mention the authorization of mining permits, hence articles stipulating no authority in the mining sector for regency and municipality administrations would continue to be effective, Todung said.

The Energy and Mineral Resources Ministry'€™s director general for mineral and coal, R. Sukhyar, welcomed the Pemda Law, saying that the Mining Law, particularly its articles that give power to local administrations in the mining sector, would likely be amended.

'€œThe Mining Law will be adjusted to the Pemda Law as we are now talking about local administrations'€™ authority,'€ Sukhyar said.

The Mining Law was drawn in the spirit of regional autonomy and decentralization policy, giving power to local administrations to regulate their own natural resources. However, after years of implementation, local authorities have been criticized as graft cases have revealed that many high ranking regional officers issued permits to certain firms for personal gain.

Poor coordination among local administrations has resulted in legal battles in national court and international arbitration.

Concerns over environmental issues have also emerged as over 8,800 mining permits have been issued by regency and municipal administrations after 2009, according to Sukhyar.

The scrapping of power for local administrations in the mining sector would also help the central government better manage the sector, which is one of the main contributors to state income.

'€œLocal administrations currently have too much control. Supervision will be far easier as we will only face 34 governors,'€ Sukhyar said.

Indonesian Coal Producers Association (APBI) chairman Bob Kamandanu also supports the Pemda Law.

'€œIn the past few years, local administrations have issued too many permits without following the mining principles, without carrying out proper studies,'€ Bob said.

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