Urgent Call for Reform in Mining Governance, Especially in Oversight Mechanisms
Jakarta, July 20, 2025 – The Publish What You Pay (PWYP) Indonesia coalition has spotlighted the failure of oversight systems in the mineral and coal mining sector (minerba), which has allowed illegal coal mining operations to persist in the Ibu Kota Nusantara (IKN) area and the Tahura Bukit Soeharto conservation area for nearly a decade since 2016. While the uncovering of these activities by the National Police’s Criminal Investigation Agency (Bareskrim Polri) deserves praise, this case exposes glaring gaps in mining governance, resulting in state losses of Rp5.7 trillion comprising Rp3.5 trillion in coal depletion and Rp2.2 trillion in forest damage. PWYP Indonesia urges the government to take responsibility and implement urgent reforms to improve mining governance, particularly in oversight, to prevent illegal practices that harm the environment and deplete national resources.
PWYP Indonesia researcher Adzkia Farirahman (Azil) stated, “This isn’t just an isolated incident it’s a clear sign of systemic failure in mining sector oversight. How could illegal mining operate for so long in a national priority area like IKN without early detection? We demand a thorough investigation into the potential involvement of related parties, including miners, transportation providers, shipping agents, licensed companies, port operations, and relevant officials.”
The case came to light through a Bareskrim Polri operation that seized 351 containers of illegal coal, heavy equipment, and arrested three suspects. The perpetrators used forged documents from companies like PT MMJ and PT BMJ to smuggle coal to ports. The modus operandi involved collecting illegal coal at stockpile sites or warehouses, packaging it in sacks, and then shipping it via sea containers from the Kariangau Terminal (KKT) in East Kalimantan (Kaltim) to Tanjung Perak Port in Surabaya. To deceive authorities, the perpetrators used official documents from companies holding Production Operation Licenses (IUP) during shipments from the Balikpapan terminal, making the coal appear to come from legal mining operations.
Buyung Marajo, Coordinator of Pokja 30 Kaltim a member of the PWYP Indonesia coalition offered sharp criticism from a local perspective: “We commend Bareskrim Polri for exposing the circulation of coal from illegal mining in Kaltim, but this is not an isolated case. Many other illegal coal trafficking and mining activities in Kaltim remain untouched. It’s not just the three suspects involved; authorities must thoroughly investigate who else is benefiting from this crime. This case also proves the weakness of oversight and law enforcement in Kaltim when dealing with law-breaking mining corporations, especially illegal ones. This includes the East Kalimantan Regional Police (Polda Kaltim), local government, the IKN Authority, and other law enforcement agencies. The public shouldn’t be left wondering why it took Bareskrim Polri to uncover this issue.”
Buyung noted that a statement from the Minister of Energy and Mineral Resources (ESDM), Bahlil Lahadalia, claiming that the ministry’s oversight is limited to licensed mining operations, is irrelevant and unnecessary. It also highlights the minister’s inability to mitigate similar incidents in other regions. “It’s worth noting that this case involved official documents from IUP-holding companies used as a requirement for shipment. These documents were used to make the coal appear as if it came from legitimate mining operations, when in fact it was sourced from illegal mining,” he emphasized.
Azil urged the Ministry of ESDM to immediately evaluate and improve mining governance, particularly in oversight mechanisms, including implementing early detection systems. “Considering that these illegal mining activities have reportedly been ongoing since 2016 in a conservation area, it raises serious questions: Is this a form of deliberate neglect?” Azil asked.
Azil also highlighted that illegal mining in conservation areas like Tahura Bukit Soeharto not only causes financial losses to the state but also accelerates environmental degradation, increases carbon emissions, and hinders sustainable energy transition efforts. Azil called for a comprehensive audit of all IUPs around IKN, with strict sanctions for companies proven to be involved in document forgery. Strengthening digital monitoring systems, integrated with field verification, and enhancing transparency and community involvement in oversight are also critical steps.
Furthermore, Azil pointed out the ineffectiveness of the Illegal Mining Task Force (Satgas) formed by the IKN Authority (OIKN) and law enforcement agencies on September 5, 2023. Tasked with strengthening prevention and addressing illegal mining in IKN, in line with the vision of a low-carbon forest city aiming for carbon neutrality by 2045, the task force has failed to detect or stop large-scale illegal operations like this one, which have been ongoing since 2016 predating the task force’s formation. Buyung emphasized the need for a thorough evaluation of the task force’s implementation, including inter-agency coordination and concrete outcomes, to avoid the perception that prevention efforts are mere formalities while environmental damage in conservation areas like Tahura Bukit Soeharto continues unabated.
About PWYP Indonesia
PWYP Indonesia is a civil society coalition dedicated to promoting democratic and inclusive governance in the energy and natural resources sector to achieve social and ecological justice. Comprising 31 civil society organizations at the national and regional levels, PWYP Indonesia works to represent public interests from a civil society perspective and enhance the capacity of affected communities to contribute sustainably to energy and natural resource management at the local, national, and global levels.
Contact Information:
– Buyung Marajo, Coordinator of Pokja 30 Kaltim – buyung@tenggarong.com
– Azil, Researcher at PWYP Indonesia – farirahman@pwypindonesia.org