JAKARTA, KOMPAS – The management of the energy and mineral resources sector in 2018, which is seen as a political year, should be watched out for. It is hoped that that year there will be no loopholes that will benefit rent-seekers. Besides, a mining permit moratorium needs to be implemented. That was the view raised in a year-end discussion on evaluating the energy and mineral resources sector (ESDM), Friday (22/12), in Jakarta. The speakers for the discussion were the National Coordinator for Publish What You Pay (PWYP) Indonesia Maryati Abdullah, the Advocacy and Network Manager for PWYP Indonesia Aryanto Nugroho, the Director of the Indonesian Parliamentary Center Ahmad Hanafi, the Manager for Economic Governance of Transparency International Indonesia Wahyudi, and the Director for the Institute for Essential Services Reform Fabby Tumiwa.

Maryati argues that what needs to be watched out for in 2018 is raising funds for political interests. Fundraising can be done either through imports of crude oil or fuel oil (BBM) or other transactions in the energy and Moneral Resource (EMR) sector. The EMR sector has become one of the significant sources of accumulated capital raising. “Beware of the political year in 2018, do not let the practice of rent-seeking in this sector arise,” she said.

Maryati gave an example of Pertamina Energy Trading Ltd (Petral) practice, a PT Pertamina business unit (Persero) for importing crude oil and BBM. Procurement by Petral is suspected through a long chain, resulting in inefficiency. Since Pertamina Integrated Supply Chain took over Peter’s role, there have been savings of 30 US cents to 40 US cents per barrel.

Meanwhile, Aryanto said, his party encouraged the issuance of mining business permits to be stopped until the political year had passed. This is because granting permits by the regional government can become a political trading tool ahead of the simultaneous regional head elections in 2018.

“Do not let mining permits be sold out for political purposes. Therefore, the moratorium on mining permits must really be implemented,” he said. In line with Aryanto, Wahyudi emphasized that the potential for gratuities for mining permit-issuing officials in the regions is quite enormous. Meanwhile, regarding the National Legislation Program, Ahmad doubts that the Energy and Energy and Mineral Resources sector law revision will be completed in 2018. Next year, he said, the House Of Representatives (DPR) members could be more busy campaigning for regional head elections simultaneously.

Positive results

In the electricity sector, according to Fabby, the government has successfully realized several positive achievements. These achievements include an increase in the electrification ratio and improved electricity supply reliability in some areas where blackouts had previously occurred. “As for the oil and gas sector, the one price fuel oil (BBM) program implemented in remote, outermost, and frontier areas is very positive in creating price justice,” said Fabby.

He added another thing that needs to be improved: the ease with which regulatory changes occur in the Energy and Mineral Resources (EMR) sector. According to him, this creates uncertainty for the business climate and confuses investors. Another challenge in the electricity sector is how to increase the growth in demand for electricity in the country. This year’s electricity demand growth is estimated to be around 4 percent or lower than last year’s realization, which reached 6 percent.

On a separate occasion, yesterday, entrepreneurs who are members of the Association for New and Renewable Energy and Energy Conversion met with Vice President Jusuf Kalla and Minister of Energy and Mineral Resources Arcandra Tahar at the Vice President’s Palace, Jakarta. These new and renewable energy investors and developers ask the government to revoke implementing the build, use, handover (BOOT) scheme for new renewable energy power plants.

The reason is that the scheme, which requires power plants to be handed over to the state after the contract expires, is detrimental to investors. “We, from the businessmen, want the regulation that regulates the obligation to transfer (assets) to State Electricity Enterprise (PLN) to be revoked,” said the Head of Law, Policy Advocacy and Regulation of the Indonesian Renewable Energy Society Paul Butar Butar. Apart from that, continued Paul, business people also object to calculating the capacity cost contract price on the selling price of electricity based on the investment value appreciated for at least 20 years. Responding to the proposal, Arcandra said that the government is currently reviewing the Renewable Energy Association proposal.