After the enactment of Local Government Act, mining licensing authority which is previously owned by the regency is fully drawn to the province. In another hand, this Act does not mention about the change of state and local revenue management, especially revenue generated from natural resource.

Dewi Putriani, Head of Energy and Mineral Resource (EMR) Agency in East Java, also Head of ADPESDMPI (Association of EMR Agency in Indonesia), spoke about the consequences and readiness of province government in adopting Local Government Act in mining sector.

“Delegation of authority to the province is followed by delegation of mining permits document from the regency. Now, 100% data of mining permits in East Java has been transferred to the province. We are benefitted by Coordination and Supervision of KPK in mineral and coal sector, in collecting the mining permits document,” said Dewi in a Focus Group Discussion entitled, “Mining Revenue After the Enactment of Local Government Act,” in Solo (16/3).

Dewi continued, by the delegation of authority, the responsibility of province is also getting bigger. However, it doesn’t followed with adequate fiscal incentive to conduct the function and authority.

“Province’s authority is only limited to issue mining permits, while monitoring authority is run by central government, and the tax is given to regency/city. This should be followed by revenue policy change, particularly on non metallic mineral and rocks tax sharing between regency and province,” said her.

In another hand, Nasrullah from Ministry of Finance, underlined that natural resource sharing mechanism, including mining sectors, still refers to by origin principle. However, it’s possible to change it following the current situation.

“Province government actually can suggest the change of revenue sharing between regency and province. Although the process will take time,” said Nasrullah.

The discussion was attended by several delegations from Energy and Mineral Resource Agency from Central Kalimantan, South Sumatra, Central Java, academicians and CSOs i.g: SAMPAN West Kalimantan, Prakarsa Borneo, and FITRA East Java. The discussion is part of serial FGD to oversee the mining licensing reform. [RAWSR]