JAKARTA, KOMPAS.com – The Publish What You Pay (PWYP) Indonesia coalition says the Constitutional Court’s Decision No. 160/PUU-XXIII/2025 has failed to address the fundamental governance challenges surrounding Indonesia’s mining licensing system.
According to the coalition, the priority allocation mechanism for mining licenses still risks creating opportunities for abuse unless it is accompanied by transparent and accountable implementing regulations.
PWYP Indonesia National Coordinator Aryanto Nugroho said the Constitutional Court’s ruling addresses procedural aspects but leaves broader governance issues unresolved.
“This ruling only addresses procedural issues, not the root of the problem. State control over natural resources must not be held hostage by discretionary authority disguised as affirmative action,” Aryanto said in a written statement on Thursday (July 23, 2026).
The Constitutional Court partially granted a judicial review of the phrase “through a priority mechanism” contained in Article 51(1) and Article 60(1) of Law No. 2 of 2025 on Mineral and Coal Mining (Minerba Law).
Under the ruling, the allocation of Mining Business Permit Areas (WIUPs) through a priority mechanism to cooperatives, micro, small, and medium enterprises (MSMEs), sole proprietorships, and business entities owned by religious mass organizations remains permissible.
However, the Court emphasized that such allocations must be based on clear, objective, transparent, and accountable criteria, and may not be conducted through direct appointment.
PWYP argues that the implementation of the ruling will largely depend on revisions to Government Regulation (PP) No. 39 of 2025, which amends Government Regulation No. 96 of 2021 on the implementation of mineral and coal mining activities.
According to Aryanto, at least three major governance risks must be addressed in drafting the implementing regulation.
First, the assessment criteria could be designed in ways that disproportionately benefit certain parties. Second, without public disclosure of applicants and evaluation results, the selection process will remain difficult for the public to monitor. Third, the absence of mandatory beneficial ownership disclosure could enable hidden actors to exploit the legal status of cooperatives, MSMEs, or religious organization-owned companies to obtain mining licenses.
PWYP also reminded the government that Indonesia, as an implementing country of the Extractive Industries Transparency Initiative (EITI), has committed to ensuring transparency in mining license allocation, including disclosure of applicants and beneficial ownership information.
“The transparency required by the Constitutional Court is not merely about complying with the Constitution. It is also an opportunity to strengthen Indonesia’s commitment to international transparency standards,” Aryanto said.
Meanwhile, PWYP Indonesia researcher Muhammad Adzkia Farirahman warned that granting preferential access to mining permits without adequate environmental safeguards could accelerate unsustainable exploitation of natural resources.
“Providing preferential access without considering ecological interests, environmental protection, and sustainable energy development creates excessive incentives for the exploitation of non-renewable natural resources,” he said.
PWYP therefore urged the government to impose a temporary moratorium on the issuance of new mining permits, including those granted through the priority mechanism, until revisions to Government Regulation No. 39 of 2025 are finalized.
The coalition also called on the government to maintain competitive public auctions as the primary mechanism for allocating mining licenses and to ensure that the drafting of implementing regulations is conducted transparently, inclusively, and free from conflicts of interest.
Source: Kompas