Jakarta – President Jokowi must stop the planned Revision of Government Regulation (PP) No. 1 of 2014 concerning the Implementation of Mineral and Coal Mining Business Activities proposed by the Acting. Minister of Energy and Mineral Resources Luhut Binsar Panjaitan. Through this revision of PP No. 1/20142014, the government will reopen, not only tap mineral concentrate exports, but bauxite ore, nickel and mineral exports rarely up to a maximum of 2021.

Khalisah Khalid, Head of the WALHI Network Campaign and Expansion Department stated that “Civil society organizations consider this policy will only benefit mining corporations, show the country’s dependence on mining” false “economies and continue to serve the mining industry which is draining natural resources, destroying the environment and threatening safety the citizens. WALHI sees a strong conflict of interest among public officials who propose a revision of PP 1/2014 “. Planned revision of Plt. The Minister of Energy and Mineral Resources is actually contrary to the President’s commitment.

Revision Plan PP 1/2014 is the umpteenth time a violation of Law No. 4 of 2009 concerning Mineral and Coal Mining (Minerba Law), specifically articles 102 and 103 which require mineral companies to process and refine domestic mining products. This also includes violations of Article 170 of the Minerba Law which requires all holders of Contracts of Work (CoW) who have been producing to purify no later than 5 (five) years after the Minerba Act was enacted. The Head of the Campaign for the Mining Advocacy Network (JATAM), Melky Nahar, said that a series of violations of the Minerba Law began since the issuance of ESDM Regulation No. 20 of 2013 which gave time for Mining Business Permits (IUP) to conditionally export raw minerals until January 12, 2014, to be continued with the issuance of PP No 1/2014 and Minister of Energy and Mineral Resources Regulation No. 1 of 2014 which gave concessions to the export of mineral concentrates until 2017.

Then the issuance of Minister of Energy and Mineral Resources Regulation No. 11 of 2014 which tolerates export easing through the percentage of smelter development progress, where one of the conditions for companies to obtain export permit recommendations is the smelter construction progress to reach 60 percent. Finally, the government issued Permen ESDM No. 5 of 2016 which removed the conditions for the smelter development progress requirements to get an extension of mineral exports. The issuance of the regulation will coincide with the proposal to extend the export of concentrate by PT Freeport Indonesia, where the progress of the smelter only reaches 14%.

“The series of easing policies made PT Freeport Indonesia obtain an export quota of 4.55 million tons of concentrate. Of the 4.55 million tons of concentrate, PT Freeport Indonesia produces 1,016 million pounds of copper and 1,663,000 t oz (troy ounces) of gold, with total money reaching USD 256 billion or Rp 3,328 trillion, equivalent to twice the Indonesian State Budget.

Aryanto Nugroho, Advocacy and Network Manager, Publish What You Pay (PWYP) of Indonesia explained that the revision of PP 1/2014 in addition to being in conflict with the Minerba Act also contradicted the ruling of the Constitutional Court (MK) Number 10 / PUU-XII / 2014 which strengthened the position of article 102 and 103 of the Minerba Act and emphasizes the importance of downstreaming. “Besides that, it is against the national economic strategy on downstreaming which is part of the Government’s political promises in the 2014 elections in the Jokowi-Jk nawacita and contradicts the RPJMN which is the strategic direction of medium-term development (5 years),” said Aryanto.

According to Aryanto, the relaxation of concentrate and ore exports has the potential to ravage the ongoing mining sector structuring process, including the Korsup KPK program with the Ministry in the Minerba sector, as well as the transition process for the transfer of regional licensing authority from the Regency to the Province. The reason is, there are still 2596 Mineral IUPs that are still Non-C & C because of administrative issues, overlapping spatial and spatial arrangements, and do not fulfill financial obligations and allocation of funds for environmental and post-mining rehabilitation. As is known, almost 90% of Minerba IUP based on preliminary data from Korsup Minerba KPK does not allocate reclamation & post-mining guarantee funds. In fact, in East Kalimantan alone, there are around 3,000 former mining pits, which have claimed up to 25 lives, most of them children of the nation’s future generations.

“Relaxing mineral exports will re-ignite the rate of exploitation of natural resources on a large scale, which accelerates the destructive force of the environment, minimizes safety standards, and causes humanitarian tragedies.” Aryanto explained.

Aryanto added, instead of carrying out the moratorium promise as Jokowi had stated several months ago, easing the mineral export tap actually caused injustice to some economic actors who had built smelters. “This situation is certainly increasingly leading to the uncertainty of regulation in trying and can provoke further demands,” he explained.

Rachmi Hertanti, Executive Director of Indonesia for Global Justice (IGJ), explained that the relaxation of the export of raw minerals reopened by the Government of Indonesia would lead to discriminatory treatment for investors who had built smelters in Indonesia. Not to mention, the imposition of export tax (at a certain percentage) attached to the relaxation policy is also identified as export restriction in the context of non-tariff barriers. This certainly opens up the potential of Indonesia to be again protested at the WTO or sued by foreign investors to an international arbitration institution by using the International Center for Settlement of Investment Disputes (ICSID) mechanism.

“When the policy of prohibiting export of concentrates was implemented, Indonesia was strongly protested at the WTO, even having been sued by the ICSID by Newmont. But do not assume that the application of the relaxation of the export of raw minerals today will dispel the protest. The potential to be sued in the WTO or ICSID is very open to Indonesia due to the implementation of this discriminatory policy, “Rachmi stressed.

The National Coordinator of the Mining Advocacy Network (JATAM), Merah Johansyah Ismail, stressed that this policy of easing exports would exhaust the Indonesian raw mineral reserves for sale until 2021. The chain of environmental damage and threats to people’s safety will also be longer. This revised plan is only for the country and the people to lose potential revenue from the added value of the smelter construction. In this context, Freeport is the most profitable mining company.

The government must repent of leaving dependence on the false economy of mining that perpetuates the depletion of natural resources and threatens the safety of the people. If these violations are not stopped, then President Jokowi will prove himself to be a ‘servant’ to the mining industry and PT Freeport.

In Media, Press Conference | PWYP Indonesia | October 11st, 2016