Jakarta, CNN Indonesia – The non-governmental organization Publish What You Pay (PWYP) Indonesia has urged the government to increase supervision in all aspects of the coal business, both production lines, exports, and the obligation to fulfill domestic needs (Domestic Market Obligation / DMO).
PWYP coordinator Maryati Abdullah said that no less important, supervision also includes traceability of coal commodities.
“Traceability must know the origin of goods, who are the miners, who trade and supplies anywhere. There must be certified,” said Maryati in a discussion on “Strategic National Coal Management” at the Aryaduta Hotel, Jakarta, Thursday (4/10).
Maryati revealed that the lack of supervision has resulted in the loss of potential state revenue. The reason is, there is a gap for business actors not to provide reports according to the reality on the ground. Currently, the system used in the payment of revenue from the coal sector still uses a self-assessment scheme by related corporations.
“Royalties are paid in advance before the coal is shipped, but verifying the quantity and shipment we cooperate with the Ministry of Transportation, Ministry of Industry, Customs and Excise, Ministry of Trade, Ministry of Energy and Mineral Resources, and Ministry of Finance,” he said.
On the other hand, human resources to carry out verification audits and evidence of violations are also deemed insufficient. For that, the government needs to increase human resources in the field of supervision.
“If we don’t have many hands to manage, we don’t need to give lots of coal permits,” he said.
In addition, Maryati also criticized the law enforcement efforts for business actors who commit violations that are still weak. For example, in the case of exports that exceed the permitted quota and the problem of placing the Export Proceeds in the country.
“We must have the courage to enforce the law if any company that exceeds the quota is given a warning and is suspended,” he said.
Maryati reminded that the coal sector should have a positive and constructive role in the country’s fiscal. In this case, strengthening the country’s foreign exchange reserves, considering that most of the coal production is exported.
However, based on the information he received, there were still many companies that did not place their export products in Indonesia. In fact, the coal sector has many incentives and convenience in exporting.
Separately, Indonesia Corruption Watch (ICW) researcher Firdaus Ilyas also confirmed that the lack of supervision has opened up loopholes for irregularities. As has been described some time ago, based on ICW’s study of the mineral and coal business in Indonesia, during the 2006-2016 period, it was found that there were indications of unreported of export coal transactions of US $ 27.062 billion or the equivalent of IDR 365.2 trillion (assuming an exchange rate of IDR 13,500 per US dollar).
The unreported transaction resulted in an indication of state losses, both from the coal company liability for income tax and royalties, amounting to Rp133.6 trillion.
“This is only part of our coal business process chain. We haven’t seen the domestic trade mechanism, licensing, and all kinds, “he said.
Not to mention the problem of illegal levies given by business actors to related government officials to streamline coal shipping documents.
“It could be the bribery chain or facilitation payments are not only in sectors that are directly related to the trade ministry but also its supervision, namely police officers, soldiers, and marine patrols,” he said.
Firdaus assessed that the coal sector’s PNBP contribution, which ranges from Rp. 30 trillion to Rp. 40 trillion, is still insufficient to offset potential state losses and indirect industrial impacts such as environmental and health damage.
“It is time for the government to make major revisions to the management of our coal and mining in general,” he said.
For this reason, the government needs to be firm, for example, in an effort to return indications of state losses. The PKPK also needs to step in to follow up on indications of corruption and lawlessness in the coal sector.
“We also ask the Corruption Eradication Committee to encourage relevant technical ministries to help restore indications of state losses,” he said.
In the medium and long term, the government needs to improve coal business governance, from licensing to supervision. According to Firdaus, the government needs to change the view that the coal business is only about extraction but is a business that needs to be managed carefully and responsibly.