The oil and gas industry in Indonesia is one of the pillars of the national economy. This is shown through its contribution to state revenue which reached Rp. 320.25 Trillion of a total of Rp 1,537.2 Trillion in the realization of the 2014 Revised State Budget (APBNP), or equivalent to 20.8% of total state revenue (MoF, 2015). This sector also provided a multiplier effect by creating new jobs for 889,400 people in 2014 (SKK Migas, 2015).
Unfortunately, the large role of the oil and gas sector is not supported by a comprehensive legal framework. Law No. 22 of 2001 concerning Oil and Gas (Oil and Gas Law) which is the main reference for oil and gas industry activities has been asked three times (3) material tests to the Constitutional Court (MK). The Constitutional Court’s decision reflects many problems in the Oil and Gas Law. Mainly, the Court highlighted the weakening of the state’s position as a contractor which contradicts Article 33 of the 1945 Constitution of the Republic of Indonesia. Other problems include mismanagement of natural resources in the absence of oil and gas management and utilization roadmaps, inefficient cost recovery, and various other problems.
Publish What You Pay (PWYP) Indonesia Coalition initiated by the Indonesian Center for Environmental Law (ICEL) compiled the draft Oil and Natural Gas Bill (RUU) proposed by civil society. The proposed civil society is expected to provide insight alternative in the preparation of Oil and Gas Law which is in accordance with the constitution and favor of the public interest. The process of drafting this bill also included a series of in-depth discussions and interviews with experts, academics, civil society, and the government for approximately 11 months. A total of 11 key issues included in this bill, namely oil and gas management planning, upstream oil and gas institutional models, regulatory bodies, managing SOEs, petroleum funds, domestic market obligations, reserve funds, cost recovery, participating interests, protection from the impact of oil and gas activities, and the system information and participation.
Drafting Team: Nisa I. Nidasari, Rizkita Alamanda, Dessy Eko Prayitno, Henri Subagiyo, Maryati Abdullah, Aryanto Nugroho, Haryani Turnip, Elizabeth Napitupulu
Years: 2015
Publisher: PWYP Indonesia
Download: PDF – Google Drive