JAKARTA – Indonesian Civil Society Coalition Publish What You Pay (PWYP), urged the government not to return to the policy of relaxing mineral mining especially for concentrate exports. The government must be obedient and consistent to carry out the mandate of article 102 and 103 of Law Number 4 of 2009 concerning Mineral Mining and Coal (Mimerba Law) which requires mineral and coal companies to process and refine domestic mining products. Also includes complying with and consistently running article 170 which requires all work contract holders for those who have been in production to purify no later than 5 (five) years from the enactment of the Minerba Act.

The policy of relaxation of mineral exports has been re-enacted by the government as the mineral concentrate concentrate deadline approaches on January 12, 2017. The Government through Acting, ESDM Minister Luhut Binsar Panjaitan plans to reopen the concentrate export tap through the revision of the Minerba Law and an evaluation of all regulations derived from the Minerba Act. The government’s reason is to keep the mineral industry running amid falling commodity prices. In addition, it provides an opportunity for mining companies to seek additional funding for smelter construction, bearing in mind the progress of smelter construction does not show significant development. Until June 2016, the total construction of new smelters reached 27 units, namely eight nickel smelters, two bauxite smelters, one manganese smelter, 11 zircon smelters, one lead and zinc smelter, two kaolin smelters and two zeolite smelters (Ministry of Energy and Mineral Resources, 2016).

PWYP Indonesia’s National Coordinator, Maryati Abdullah stated “(8) eight years of time that has been given by the government for downstreaming, which is 5 (five) years after the Minerba Law (2014) and 3 (three) years after the ESDM Ministerial Regulation (Permen) No. 1 The year 2014 regarding Increasing Mineral Value Added through Mineral Processing and Refining Activities, should have been more than enough to carry out downstream obligations. If the government provides relaxation of concentrated exports for the next 5 (five) years, then a total of 13 (thirteen) years time will be given to carry out downstreaming. Of course this will be a bad precedent where again the government is actually not compliant and inconsistent in carrying out the laws and other policies. ”

Relaxation of the downstream policy by the government began when the government issued Ministerial Regulation No. 20 of 2013 which gave time for a Mining Business License (IUP) to conditionally export raw minerals until January 12, 2014. Furthermore, the government also issued Ministerial Regulation No. 1 of 2014 which gave space for companies, especially holders of Contracts of Work, to export conditional mineral concentrates until January 2017. “Finally, the government issued ESDM Regulation No. 5 of 2016 concerning Procedures and Requirements for Providing Recommendations for the Implementation of Overseas Mineral Processing and Refining Processes. ‘guessing’ makes it easy for holders of contract of work to export concentrates even though the conditions in the previous regulation, namely the ESDM Ministerial Regulation 11/2014, were not fulfilled. ” Maryati explained.

Maryati Abdullah said that the downstreaming policy could not be interpreted only as a ban on the export of raw or processed minerals (raw material), but was part of an effort to arrange IUPs which amounted to thousands with the status of Non Clean and Clear (CnC); protect Indonesia’s current and future natural resources through a mechanism to increase the added value of mining products. This policy is important for Indonesia which has been dependent on its economy for exports of raw materials. Downstreaming will provide added value to the industry which consequently increases state revenues, tax revenues and non-tax state revenues. Including making a significant contribution to economic growth in general through the trickle down effect of the downstream industry.

“The Policy of Increasing Added Value is one of the promises in the Jokowi – JK Government Program Nawa Cita so that government consistency is needed in its implementation. In addition, the government must not ignore the Decision of the Constitutional Court Number 10 / PUU-XII / 2014 which strengthens domestic processing and refining obligations and states that the spirit of the Minerba Law is in line with Article 33 of the 1945 Constitution because this obligation is directly or indirectly provide maximum benefits for the prosperity of the people. So, it is clear the choice for the current government is subject to and compliant with the provisions of the Minerba Law and the Constitutional Court Decision, “added Maryati.

PWYP Indonesia Communications Manager, Agung Budiono said that now is not the right time for the government to re-discuss the relaxation of concentrate exports. “What is needed now is a comprehensive strategy from upstream to downstream to ensure the implementation of policies in the mineral and coal sector; ensure the progress of all smelter construction that is currently underway, including ensuring the implementation of the smelter construction obligations for Contract of Work holders; carry out intense coordination with ministries related to the development of downstream industries including mitigation of environmental and social issues due to the development of downstream industries. ” explained Agung.

Agung Budiono also reminded the government to carry out strict supervision of the “rat” ports which are often used by mineral mining entrepreneurs who export raw materials secretly. Improving the supervision system of ports which become the exit for mineral and coal products; develop and develop port aspects integrated with IT standards. This also includes aspects of law enforcement against companies that are proven to carry out illegal exports.

In Media, Press Conference | PWYP Indonesia | September 25th, 2016