The Civil Society Coalition Publish What You Pay (PWYP) Indonesia urged the government to be consistent in not implementing a policy of easing the export of raw materials and mineral concentrates. Because of the information, the government will again relax the ban on natural mineral exports due to the possibility of delayed smelter projects from the schedule.

PWYP Indonesia National Coordinator Aryanto Nugroho said that if the raw mineral export ban is relaxed again, it will be a step back in efforts to encourage increased added value within the framework of accelerating energy transition and sustainable development. This step also contradicts President Jokowi’s statement on Wednesday (21/12/2022), which said that starting June 2023, the government would ban bauxite ore exports.

“And encourage the domestic bauxite processing and refining industry,” he said in his statement Friday (17/2).

PWYP Indonesia emphasized that the export relaxation policy plan contradicts the mandate of Law No.3 of 2020 concerning Amendments to Law No.4 of 2009 concerning Mineral and Coal Mining. As is known, Article 103 of Law 3/2020 requires holders of a Mining Business License (IUP) or Special Mining Business License (IUPK) at the stage of mineral production operation activities to process and/or refine minerals mined domestically.

This step will also conflict with Article 170A paragraph (1) of Law 3/2020, which states, “Holders of KK, Production Operation IUP, or Production Operation IUPK for metal minerals which: a. have carried out Processing and Refining activities; b. in the process of building Processing and/or Refining facilities; and/or c. have carried out Processing and/or Refining cooperation with other companies. Has carried out Processing and/or Refining cooperation with holders of Production Operation IUP, other Production Operation IUPK, or Production Operation IUP specifically for Processing and Refining or other parties carrying out Processing and/or Refining activities, may sell certain unrefined metal Mineral products in a certain amount abroad within a maximum period of 3 (three) years from the date this Law comes into force “. As is known, Law 3/2020 will come into force in June 2023.

For Aryanto, the policy also contradicts the Constitutional Court (MK) decision No.10/PUU-XII/2014, strengthening the obligation of domestic processing and refining. The Constitutional Court’s decision also states that the spirit of the Minerba Law is in line with Article 33 of the 1945 Constitution. “Because this obligation directly or indirectly provides maximum benefits for the prosperity of the people,” he said.

Aryanto said that the plan to relax the ban on raw mineral exports would add to the list of government inconsistencies that should accelerate the realization of mineral downstreaming. From issuing Ministerial Regulation (Permen) of Energy and Mineral Resources (ESDM) No.20 of 2013 concerning the Second Amendment to Permen ESDM No.7 of 2012 concerning Increasing Mineral Added Value Through Processing and Refining Activities.

Then Permen of ESDM No.5 of 2016 concerning Procedures and Requirements for Providing Recommendations for Implementing Mineral Sales Overseas of Processing and Refining Results, PP No.1 of 2017 concerning the Fourth Amendment to Government Regulation No.23 of 2010, the Implementation of Mineral and Coal Mining Business Activities. Furthermore, Permen of ESDM No.25 of 2018 concerning Mineral and Coal Mining Business, to Permen of ESDM No.17 of 2020 concerning Procedures for Granting Areas, Licensing, and Reporting on Mineral and Coal Mining Business Activities.

“14 years since Law Number 4 of 2009 was issued, the time given for the government and business actors to build a downstream industry. Until today, downstream progress is still not on target, which does not mean that the solution is a policy of relaxing raw mineral exports.” He said.

He suspects that the slow development of minerals downstream is because the government continues to relax. Relaxation of mineral exports has an impact on increasing the rate of exploitation of natural resources. The easing back of the raw mineral export faucet can disrupt efforts to reform and organize IUPs in Indonesia. In addition, it results in massive forest land clearing from irresponsible mining practices.

For PWYP, Aryanto continued, with the opening of the raw mineral export faucet having the potential to trigger the existence of illegal mining. According to him, illegal mining is not limited to unlicensed activities but can take the form of licensed companies. But producing above the quota, mining outside the permitted area, or running lousy mining practices.

Aryanto also reminded us that the mineral downstream policy should be consistent with the energy transition objectives for adaptation and mitigation of climate change impacts and achieving the Sustainable Development Goals (SDGs). Namely, minerals will be increasingly needed for energy transition needs.

“It does not mean justifying massive mineral exploitation. The principles of a just energy transition must remain a guideline in its implementation,” he said.

Previously, President Joko Widodo (Jokowi) alluded to the European Union’s subtlety so that partnerships carried out with ASEAN countries are based on equality; there should be no coercion. In particular, it is hoped that there will be no more parties who feel entitled to dictate the sovereignty of other countries and consider the standards used by their countries better than the policies of their partner countries.

“If you want to build a better partnership, then the partnership must be based on equality; there must be no coercion, no more parties that always dictate and always think that my standards are better than yours,” Jokowi said at the ASEAN-EU Partnership Summit in Brussels on December 14.

In early 2021, the European Union, and the Indonesian government, through the World Trade Organization (WTO), issued a policy to ban nickel ore exports in early 2020. At the end of November, Indonesia finally decided to lose to the European Union regarding the lawsuit at the WTO. The Jokowi government did not budge by filing an appeal.

Source: Online Law