Jakarta, Petrominer – The Indonesian government, in this case, the Ministry of Energy and Mineral Resources (ESDM), has again emphasized its seriousness in supporting transparency for investors who will invest in the Energy and Mineral Resources sector. It is hoped that this transparency of beneficial ownership (BO) can prevent corruption, tax evasion, terrorism financing, and money laundering practices.

To support this effort, the Ministry of Energy and Mineral Resources has issued Ministerial Regulation Number 48 of 2017 concerning the Energy and Mineral Resources Sector Business Supervision. This policy is to complement previously published regulations.

“We have issued Ministerial Regulation No. 48 of 2017 and has been running for about six months. I issued Ministerial Regulation 48 of 2017, where the request for ownership approval. We do not accept unclear Beneficial Ownership,” said Energy and Mineral Resources Minister Ignasius Jonan while attending the Opening Up Ownership Conference in Jakarta, Monday (23/10).

The regulation complements Law Number 4 of 2009 concerning Mineral and Coal Mining and Government Regulation Number 35 of 2004 concerning Upstream Oil and Petroleum Business Activities. The last two regulations have not explicitly stipulated disclosure of ownership and licensing for extractive industry businesses.

Jonan hopes that through Energy and Mineral Resources Ministerial Regulation Number 48 of 2017, it will realize good governance in the Energy and Mineral Resources sector through business supervision. This effort is a mandate of Article 33 of the 1945 Constitution in which the Energy and Mineral Resources sector, which controls the lives of many people, is controlled by the state and utilized for the greatest prosperity of the people.

Become a Pioneer

Commissioner for Corruption Eradication Commission (KPK), Laode M Syarif, explained that strategic programs and sources of state revenue focus on implementing Beneficial Ownership, such as the mining sector. The Corruption Eradication Commission (KPK) collaborates with the Ministry of Energy and Mineral Resources to make an inventory of mining licenses (IUP) that are not clear and clean. The number is quite large, approximately 4,000 licenses.

“The Corruption Eradication Commission hopes that other ministries and state institutions will be able to follow in the footsteps of the Ministry of Energy and Mineral Resources, which has issued its legal umbrella,” said Laode.

On that occasion, Jonan also emphasized that cooperation between institutions is a measure of implementing Beneficial Ownership. Currently, the Ministry of Finance and the Corruption Eradication Commission have taken this step. “To conduct Beneficial Ownership clearance, one of them must enter tax ID in administrative documents so that all data is connected,” he explained.

Disclosure of information on Beneficial Ownership can lead to loss of economic potential and state revenue, one of which is from tax avoidance opportunities by taxpayers. The Expert Staff confirmed this for Tax Compliance, Suryo Utomo.

“With the Beneficial Ownership, it is essential to reduce cases of tax avoidance at least, and all applies to all sectors, not only mining,” said Suryo.

Meanwhile, Deputy II of the Presidential Chief of Staff, Yanuar Nugroho, explained that the government is currently drafting a Presidential Regulation (Perpres) as the legal foundation for implementing Beneficial Ownership. Such a policy is necessary because its implementation will increase a country’s investment level.

“We are currently preparing this Presidential Decree. Currently, there are no sanctions for those who do not declare their Beneficial Ownership. With this Presidential Regulations, we have a foundation and a database so that the Beneficial Ownership scheme can be implemented,” said Yanuar.