Ratification of the Minerba Bill on Amendment to Law…
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Ratification of the Minerba Bill on Amendment to Law Number 4 of 2009 Concerning Mineral and Coal Mining

The House of Representatives of Republic Indonesia has officially ratified the Mineral and Coal Mining Bill (the Minerba Bill) into the Law at the Plenary Meeting, on Tuesday 12 May 2020. The Minerba Bill draws a lot of polemic from various society. Besides the discussion which was deemed too fast and is carried out in the situation of handling the Covid-19 pandemic, there are a number of articles which are also considered to be beneficial only to certain parties.

One of the articles that attracts attention is because it is considered to provide very large benefit, even more to the coal companies which their period of Coal Mining Work Agreement (PKP2B) will expire soon. Under the Minerba Bill, there are provisions regarding the extension of operating licenses for companies holding Coal Mining Work Agreements (PKP2B) that were not previously stipulated in the old Minerba Act (UU Minerba). The articles in the Minerba Bill passed in Commission VII show how companies are given various facilities, including automatic extension for PKP2B permit holders without reducing the area and through the auction. The provisions of Article 169 A in the new Minerba Bill stipulate that KK and PKP2B are granted a guarantee of extension to Production Operation IUPK as a Continuation of Contract / Agreement after fulfilling the requirements with the provisions: contracts / agreements that have not yet received an extension are guaranteed to get 2 (two) times the extension in the form Production Operation IUPK as a Continuation of Contract / Agreement Operation respectively for a period of no longer than 10 years as a continuation of operations after the end of the KK or PKP2B taking into account the efforts to increase state revenue.

In Article 1 Paragraph 28 (a) of the Minerba Bill, regulates new provisions concerning the Conception of the Mining Law Area which had not previously been regulated in the Minerba Act. In the Minerba Bill, the Mining Legal Area is regulated not only covers the land area but also the sea, which covers all land space, sea space, including space within the earth as a single unit, namely the Indonesian archipelago, land under water, and continental shelf. In the implementation of the Reclamation which is carried out throughout the stages of the Mining Business, holders of IUP or IUPK are required to carry out the management of the final ex-mining pit with the most extensive limits in accordance with statutory provisions. With this provision it is possible that the closure of a former mine pit to be limited and not completely closed.

The Minerba Bill is also seen to have no space and options for civil society to refuse mining activities in their lives or environments. In Article 162 the Minerba Bill stipulates that anyone who blocks or interferes with Mining Business activities can be sentenced to a maximum imprisonment of 1 (one) year or a maximum fine of Rp100.000.000,00 (one hundred million rupiah). Besides the initial draft of the Minerba Bill also abolished the provisions of the punishment for the corrupt officials in granting IUP, IPR, or IUPK that were contrary to the Law. In Article 165 of the Minerba Act previously stipulated provisions regarding criminal sanctions of a maximum of 2 (two) years or a maximum fine of Rp200.000.000,00 (two hundred million Rupiah) for officials who abuse their authority in issuing licenses. However, the provisions of Article 165 have been abolished in the new Minerba Bill and causes many people concerning that the removal of the provisions will provide protection for state officials in issuing problematic mining licenses.


Suria Nataadmadja & Associates Law Firm

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