Jakarta – The Indonesian Publish What You Pay (PWYP) Coalition reminds the government to consistently use the national development plan, energy policy, and climate change control agenda as a consideration in evaluating the 2019 mineral and coal mining (minerba) Budget Work Plan (RKAB) which submitted by the contract holder and mining business permit (IUP).

As stipulated in the Energy and Mineral Resources (ESDM) Ministerial Regulation (Permen) Number 11 of 2018 concerning Procedures for Granting Areas, Licensing and Reporting on Mineral and Coal Mining Business Activities, IUP holders (and PKP2B) are required to submit the 2019 RKAB at the latest 45 days before the end of 2018.

The National Coordinator of PWYP Indonesia, Maryati Abdullah explained that the annual RKAB evaluation process is a critical moment in determining the direction and placing the mining industry appropriately in the national development strategy. The government must be consistent in controlling production as a conservation effort along with increased business guidance, regulation, and supervision – as proclaimed by the Government in the 2015-2019 ESDM Ministry Strategic Plan to carry out the RUEN (National Energy General Plan) policy direction.

Because the RKAB is actually an instrument of government control and supervision of the compliance of business actors. Not only that, but RKAB is also a determinant of national production and sales targets. Therefore, it is important to put the RKAB as a document that does not stand alone but must contribute to the development strategy and national energy policy.

Both the 2015-2019 RPJMN and RUEN mandate a limit on coal production to a maximum of 400 million tonnes in 2019. So the RKAB must be in line with the two policies. So that they do not negate each other as has happened so far. Table 1 describes the 2015-2019 Ministry of Energy and Mineral Resources Strategic Plan matrix in question.


Tabel 1. Coal Management Policy in the ESDM Ministry’s Strategic Plan 2015-2019


No Policy Action Plan
1 Optimization of mineral and coal production
  • Controlling mineral and coal production in the context of conservation
  • Coordination of business development, regulation and supervision
  • Evaluation of coal reserves and resources balance
  • Production determination per province
2 Increase in domestic coal allocation
  • The increase in DMO coal is around 27% per year, in 2019 it is 60% of the national coal production plan
  • The percentage decline in coal exports by 14% per year
  • Preparation of the national coal balance
  • Supervision of the implementation of DMO coal on PKP2B and Mining permit
3 Optimizing state revenues
  • Renegotiation of KK and PKP2B
  • Variation, verification, and collection of financial obligations
  • Increased supervision


Source: Directorate General of Mineral and Coal, 2018


Production targets that are out of control and continuing to pursue export market demands are no longer reasonable and should be stopped. This is because it will actually trigger more massive coal production and do not pay attention to the balance of reserves and nature conservation. For example, the incident last November 29, which went viral, about the buried houses due to landslides in Sanga Sanga – East Kutai, shows a portrait of coal mining activities that do not pay attention to community safety. “Therefore, to fulfill the sustainable Nawacita program, controlling coal production for the national interest and public safety is absolutely necessary!” concluded Maryati.

Rizky Ananda, a coal policy researcher at PWYP Indonesia added, “The RKAB evaluation process, especially in terms of determining coal production targets, is a test point for the Indonesian government’s commitment to tackling climate change. The urgency to push the climate change agenda from the energy sector is getting stronger, considering that one of the biggest emitters in Indonesia is the energy sector, one of which comes from coal power plants. The results of the analysis of the Brown to Green report prepared by Climate Transparency and the Institute for Essential Services Reform (IESR) also stated how sectoral policies, especially the energy sector in Indonesia, are not in line with efforts to tackle climate change as stated in the Paris Agreement. This can be seen from the emissions from the energy sector in Indonesia which increased by 18% in the 2012-2017 period (Enerdata, 2018) “.

“The climate change agenda in the energy sector must be carried out starting from the upstream side, namely starting from controlling coal production. This policy has been adopted in RUEN which should be designed to support the energy transition to low-carbon energy and efforts to mitigate climate change. The problem is the synchronization of RUEN with derivative policies at the technical level, such as the policy for determining the national coal production target determined by the results of the RKAB evaluation, “Rizky explained.

Meanwhile, Aryanto, Advocacy Manager at PWYP Indonesia, emphasized that the RKAB evaluation must also consider the compliance of IUP holders in fulfilling the coal domestic market obligation (DMO). In accordance with the Ministerial Decree (Kempen) ESDM No. 23 K / 30 / MEM / 2018, sanctions for cutting production in 2019, namely a maximum of four times the realization of the 2018 DMO, will be applied to permit holders who do not meet the DMO obligations of 25%.

“This is where we are waiting for the results of the work of the DMO verification team which is responsible for verifying the fulfillment of the coal DMO, because the recommendation of the verification team is the basis for imposing sanctions on the 2019 production quota cut. In fact, the government should have published the names of companies that have not met the DMO target, so that the public can participate. supervise, “said Aryanto who is also the CSO representative at EITI Indonesia.

What’s more, the Ministry of Energy and Mineral Resources has just launched the Minerba Online Monitoring System (MOMS), a real-time and accurate monitoring system for mining production and sales of mineral and coal mining. “Improving this internal system must be followed by efforts to open up to the public. The main thing is to encourage transparency of production data because production data is a key determinant of state revenue, “he concluded.