The issue related to Omnibus Law Job Creation Bill is continue, in terms of procedure, process, and substance. This topic was discussed in the Media Discussion organized by PWYP Indonesia within “The Polemic on Job Creation Bill in Mineral and Coal Sector” on Monday (24/2) in Jakarta. Aryanto Nugroho, Advocacy Manager of PWYP Indonesia, who served as a moderator, opened the discussion by inviting several speakers from representatives of the local government, central government, and civil society organization.

Deri Dariawan ST. as a representative of the Banten Provincial Government Energy Agency said that the local government as an extension of the central government was not in a position to accept or reject the Job Creation Bill. He told about the condition and the authority of the management of mineral and coal mining through Law No.4/2009, which is based on the administrative area. However, for matters of policy such as Norms, Standards, Procedures, and Criteria (NSPK) is completely central authority. The provisions were then updated through Law No. 23/2014, the regional government is no longer has authorities in the forestry, marine, energy and natural resources sectors. The provincial government authority (after Regional Government Bill) is now limited to 7 things, including the determination of mining business permit area (WIUP), issuance of IUP permits (metal, non-metal and rock), community mining permit (IPR), Benchmark mine pricing (non-metal and rock), and mining services.

Regarding to Job creation Bill in the ESDM sector, Deri admitted that there were many changes in terms of substance. In general, He said that based on his evaluation in the area, there were mining management issues, especially from the aspect of supervision and control. This is related to the indication of leakage of state revenue, environmental damage, social conflicts, and Mining Without Permit (PETI). “Regarding to these 4 things, there is a weakness in supervision and control. Thus the rules are good, but lacking in implementation” Deri said.

As a non-renewable natural resource, Deri also reminds the central government to review the bill so it could prevent exploitation of the natural resources that have an important role in capital development. “If the spirit is only for investment purpose, then this SDA will certainly run out faster than expected”. On the other hand, exploitation through opening an investment will certainly affect environmental change. “The minimum function of the post-mining is environment will change” he added.

Looking into detail, Deri explained that if the Job Creation Bill passed, then there will no authority for regional government in terms of licensing, supervision, and guidance services because it would be taken by the central government. “The question is whether the central government is ready in terms of human resources, infrastructure, methods and so on. Because if in the regions, the direct impact is there will be many Government Organizations (OPD) disappear”. For this reason, there are at least three things must be ensured for the regions such as “regional government should receive financial benefits, the environment should not be damaged, as well as realization of the interests from indigenous and local communities related to land and income ”

Meanwhile, Prof. Irwandy Arif as Special Staff of the Ministry of Energy and Mineral Resources in his presentation explained that the background of the draf Creating Job Bill is related to the current conditions due to the hyper-regulation problem, Indonesia’s low competitiveness, employment needs, and global uncertainty. Therefore, the purpose of the Creating Job Bill is to support the achievement of economic growth (growth); economic equality (inclusiveness); economic security (resilience); and economic competitiveness.

Source: Presentation of Prof. Irwandy Arif, February 2020, Jakarta

Translation of data presentation from Prof Irwandy Arif: Currently, there is complexity and obesity regulation, which are 4,451 central regulations and 15,965 local regulations. Regulation and institution become the main barrier besides fiscal, infrastructure, and human resources. A current income per capita Rp. 4,6 million/month. Indonesia will be 5 biggest world economies in 2045 with gross domestic product up to 7 trillion U.S. Dollars by income per capita Rp 27 million/month.

Regarding the polemic about the substance of the article in the Job Creation bill, Prof Irwandi urged to public to not worry because it would be regulated in the provisions of the legislation/derivative regulation (Peraturan Pemerintah/PP). “If the interpretation is wrong, then everything (looks) wrong.” He said. Also, the draft law is a draft after all, so it is still open for society who wants to give input.

Besides representatives from the Regional and Central Governments, this discussion was also attended by representatives from civil society organization namely Maryati Abdullah as National Coordinator of PWYP Indonesia and Muhammad Iqbal Damanik, Recearcher of Auriga Nusantara. In the discussion, Maryati Abdullah gave a general view on several aspects of the Job Creation Bill. She said several articles have logical fallacy with each other, thus containing contradictions. Meanwhile, Iqbal said that the polemic on the Creating Job Bill could be ended by withdrawing the draft and involving wider public participation.

Maryati Abdullah worrying about the recentralization of all licenses in the natural resources sector to the central government. This is seen as incompatible with reform values ​​and is feared to reduce political economic cohesion between the center and the regions. This view is based on the importance of the Region who being given a discretion in managing their economic potential as a form of appreciation for the right ownership of local communities. If there have been problems seen such as overlapping, lengthy procedures, or the existence of extortion or conflict of interest (local political relations – licensing of natural resources), then this discretion should be accompanied by strict terms and conditions, not by revoking it all.

Maryati also believes that this bill requires further adjustments, for example related to the provisions regarding balance funds in the natural resources sector, as well as the many delegations of regulations to PPs (Government Regulations) which can actually create new legal uncertainties, where this is contrary to the goals of the Omnibus Law itself. In addition, the community looks that the provisions for eliminating DMO obligations are not appropriate if all license holders are required to increase the value added/downstream in the country. In addition, the ease of procedures for the extension of PKP2B (Coal Mining Concession Work Agreement) which reportedly can increase state revenue is not in line with the provisions that can provide up to 0% royalty incentives to permit holders who carry out downstream integration and the utilization of mineral and coal in the country. For this reason, the Job Creation Bill requires a more in-depth study both in terms of sector context and its future impact. (WC/AA)

Other news about this Media Discussion can also be seen at: