Jakarta — The Publish What You Pay (PWYP) Indonesia Coalition has taken a critical stance toward Constitutional Court Decision No. 160/PUU-XXIII/2025, which declared the phrase “through a priority mechanism” for cooperatives, individual enterprises, micro, small, and medium enterprises (MSMEs), and business entities owned by religious mass organizations in Article 51(1) and Article 60(1) of Law No. 2/2025 on the allocation of Mining Business Permit Areas (WIUP) to be conditionally constitutional, provided that such priority is granted only through clear, objective, transparent, and accountable parameters, rather than through direct appointment.
As a matter of principle, PWYP Indonesia maintains that an open auction mechanism is the most merit-based, fair, and least corruption-prone instrument for managing non-renewable natural resources. Any form of priority mechanism still carries the risk of becoming a vehicle for expanding new mining frontiers amid the country’s persistently weak governance.
On one hand, the ruling returns the debate to its most fundamental question: state control over natural resources is not merely about who receives a permit, but whether the process itself can be held accountable to the public.
“This ruling addresses procedure, not the root of the problem. State control over natural resources must not be held hostage by discretion disguised as affirmative policy,” said Aryanto Nugroho, National Coordinator of PWYP Indonesia.
The Trap of Technical Regulations and the Risk of Opacity
The Constitutional Court’s decision risks becoming little more than a paper formality if the implementing regulations—particularly the revision of Government Regulation (PP) No. 39/2025 on the Second Amendment to PP No. 96/2021 concerning the Implementation of Mineral and Coal Mining Business Activities—are drafted without meaningful public participation and adequate transparency.
Aryanto identified at least three loopholes that could reduce the parameters of “objective, transparent, and accountable” to mere procedural rhetoric. First, assessment criteria could be tailored in a way that only certain parties are capable of meeting them, without any fair basis for comparison. Second, without publication of the list of applicants and assessment results, the selection process among priority applicants would remain difficult for external parties to verify. Third, without mandatory disclosure of beneficial ownership, the status of cooperatives, MSMEs, or religious organization-owned business entities receiving priority could become a façade for large corporations or financiers that are not actually entitled to such affirmative treatment.
These risks are not hypothetical. The enactment of Law No. 2/2025, the Fourth Amendment to the 2009 Mineral and Coal Mining Law, itself faced strong criticism and opposition from various groups, including the PWYP Indonesia Coalition, because it was deliberated rapidly, outside the 2025 National Legislative Program (Prolegnas), and with minimal public participation. If the revision of its implementing regulation follows the same pattern, a regulation intended to guarantee transparency could instead emerge from a process that is itself opaque.
“As an implementing country of the Extractive Industries Transparency Initiative (EITI), Indonesia is also expected to comply with internationally agreed standards. Requirement 2.2 of the 2023 EITI Standard obliges implementing countries to disclose the process, criteria, and list of applicants in every mining license allocation, including beneficial ownership information. Yet in the 2024 EITI Validation, the International EITI Board gave Indonesia a score of only 67 out of 100 for its implementation—a clear warning about structural problems ranging from data inconsistency to weak policy follow-up. In other words, the transparency required by this Constitutional Court ruling is not only a matter of domestic constitutional compliance, but also an opportunity to narrow the gap between Indonesia’s international commitments under the EITI and the actual practice of mining licensing governance,” Aryanto added.
Not a New Concern
Muhammad Adzkia Farirahman (Azil), Researcher at PWYP Indonesia, emphasized that the issue examined and decided by the Constitutional Court is not new. Similar concerns have existed since the controversy over the direct extension, without auction, of Contracts of Work (KK) and Coal Contracts of Work (PKP2B) under Law No. 3/2020, which amended the 2009 Mineral and Coal Mining Law.
“The facilitation offered through a fast-track priority scheme, without adequate consideration of ecological interests, environmental protection, and sustainable energy development, creates excessive incentives for the exploitation of non-renewable natural resources,” Azil said.
A Moment to Reform Governance, Not Expand New Permits
While awaiting the completion of the revision of PP No. 39/2025, PWYP Indonesia urges the government to impose a temporary moratorium on the issuance of new mining permits under any scheme until objective, transparent, and accountable parameters are genuinely in place and publicly verifiable.
This moment should also be used to follow up on the findings of the Forest Area Enforcement Task Force (Satgas PKH), which identified 4,265,376.32 hectares of forest areas with mining openings operating without Forest Area Borrow-and-Use Permits (IPPKH) and has taken enforcement action against dozens of problematic mining companies.
PWYP Indonesia warns that lands reclaimed or controlled through Satgas PKH enforcement must not end up being redistributed as new priority WIUPs without undergoing the same objective, transparent, and accountable standards. Otherwise, the enforcement effort would merely shift the opportunity for abuse of authority from one gateway to another rather than closing it.
PWYP Indonesia’s Position
In response to this ruling, the PWYP Indonesia Coalition urges the government to:
- Impose a moratorium on new mining permits, including those granted through priority mechanisms, while the implementing regulation is being revised, and simultaneously follow up and publicly disclose the status of law enforcement related to Satgas PKH findings on problematic mining permits.
- Maintain open auctions as the primary standard of extractive governance and ensure that the revision of PP No. 39/2025 is drafted transparently, participatively, and free from conflicts of interest.
- Guarantee public disclosure of the criteria, scoring system, list of applicants, and assessment results used to determine priority status, including mandatory disclosure of beneficial ownership data, in line with Requirements 2.2 and 2.5 of the 2023 EITI Standard, which Indonesia has committed to implement.
- Ensure the fulfillment of Free, Prior and Informed Consent (FPIC) for affected communities as a mandatory and disqualifying condition in the allocation of priority WIUPs.
- Conduct independent environmental compliance and financial audits and publish the results regularly for all prioritized WIUP implementations.
- Make public the criteria, applicant lists, assessment results, and beneficial ownership information for every WIUP granted through a priority mechanism, consistent with Requirements 2.2 and 2.5 of the 2023 EITI Standard.
The debate over who deserves state affirmative treatment most should not obscure the larger question: does mining governance genuinely break the cycle of extractive dependency and distribute its benefits fairly, or does it merely transfer advantages from one privileged group to the next?
Media Contacts
Aryanto Nugroho
National Coordinator, PWYP Indonesia
aryanto@pwypindonesia.org
Muhammad Adzkia Farirahman (Azil)
Researcher, PWYP Indonesia
farirahman@pwypindonesia.org