Publish What You Pay (PWYP) Indonesia held a discussion and launched a report on licensing reform and improvement of Indonesia’s mining governance (7/12). Currently, mine governance is considered to be showing quality improvement. The report entitled “Mineral and Coal Mining Coordination and Supervision,” released by PWYP Indonesia, mentioned several positive achievements related to this issue.
One of the Mineral and Coal Mining Coordination and Supervision follow-ups is that the government will block 2509 Mining License (IUP) as of 31 December 2017 because their operations do not meet the compliance elements. Starting from 2014 to 2017, the government has succeeded in reducing the number of Non-CNC licenses from 6042 to 2517 licenses, equivalent to 48.42%.
Furthermore, the improvement of mining governance can also be seen from the government’s policy innovation. An example is a breakthrough in launching an online-based mining governance system. In this case, the government issued the electronic Non-Tax Revenue (E-PNBP) application, intended to facilitate royalties and fixed fees for mining companies.
In this regard, the government is also trying to issue innovations in the aspect of online licensing. Heri Nurzaman, Secretary to the Director-General of the Mineral and Coal Directorate of the Ministry of Energy and Mineral Resources, said that online licensing is intended to simplify the permit application procedure and to encourage transparency in the licensing process. This policy is also expected to encourage the creation of integrated and synchronized data between institutions, between levels of government, both central and regional.
Governance and issues
Apart from a series of positive notes, aspects of Indonesia’s mining governance still have some serious problems. During the discussion session that discussed this report’s contents’ ins and outs, it was stated that there were severe problems regarding the mining business license area. There are mining business license areas that are included in protected forests and conservation forest areas. Until 2017, no less than 3.81 million hectares were included in protected forest areas, and 803.3 thousand hectares were included in conservation forest areas.
The problems do not stop there. Another problem lies in the lack of potential tax revenue sources from the mineral and coal mining sector. PWYP Indonesia Advocacy and Network Manager Aryanto Nugroho explained that only half of the 10,584 mining licenses have Taxpayers Identification Number (NPWP) and report the tax return (SPT). “This problem causes the government to suffer significant losses, reaching six trillion rupiahs per year, as a result of many mining entrepreneurs not paying their tax obligations,” he said.
Challenge
The mining sector’s future arrangement will face a list of problems that must be resolved immediately and a series of challenges that are absolute to be faced. At the Corruption Eradication Commission (KPK) Representative Discussion session, Dian Patria, Chairman of the Corruption Prevention Team for Natural Resources of the Corruption Eradication Commission (KPK), revealed that the fierce commitment and full support of all related agencies on this issue are critical the success of the national mining sector arrangement. Without the cooperation of various agencies such as the Corruption Eradication Commission, the Ministry of Energy and Mineral Resources, the Ministry of Environment and Forestry, the Regional Government, efforts to restructure the mining sector will run slowly and be partial, making it difficult to solve the problem to its root.
In this regard, PWYP Indonesia’s National Coordinator, Maryati Abdullah, encourages various stakeholders to build more positive synergies, especially in the aspect of understanding mining sector governance. According to him, this is necessary so that government performance can run more optimally. [AP].