BANTEN — President Prabowo Subianto has established the Coordinating Ministry for Downstreaming and Energy Transition and appointed Energy and Mineral Resources Minister Bahlil Lahadalia to lead it, effective Thursday (1 October). The technical ministries to be placed under the new coordinating ministry have yet to be identified, prompting criticism over what is seen as a hastily designed institutional structure.
Bahlil admitted that he still needed to check the Presidential Regulation governing the establishment of the coordinating ministry. Minister of Investment and Downstreaming and Head of the Investment Coordinating Board (BKPM), Rosan Roeslani, also said he was not yet aware of how coordination involving his ministry would be arranged.
Executive Director of CORE Indonesia, Mohammad Faisal, viewed the establishment of the coordinating ministry as a signal that Prabowo places high priority on downstreaming and energy transition. According to Faisal, the move aims to ensure that both programs can be implemented more effectively, rather than merely placing additional burdens on the State Budget (APBN).
“The establishment of this coordinating ministry indicates that downstreaming and energy transition have been given strong priority,” Faisal told CNNIndonesia.com on Tuesday (6 October).
Institutional Design Considered Inadequate
Faisal criticized the institutional design as seemingly hasty, given the absence of a clearly defined structure of subordinate ministries. He argued that the planning behind the establishment of the coordinating ministry had not been adequately prepared.
“If the coordinating ministry has already been established, but there are still no ministries under it, this means the institutional design has not been properly thought through,” Faisal said.
Faisal also highlighted the risks associated with Bahlil holding concurrent positions within the same vertical chain of command. Bahlil, who also serves as Chairman of the Golkar Party, holds the positions of Coordinating Minister for Downstreaming and Energy Transition and Minister of Energy and Mineral Resources, potentially creating conflicts of interest.
“I hope this is only a temporary arrangement to avoid a vacancy. Going forward, the government needs to consider ensuring that both positions are not held by the same person,” Faisal said.
New Coordinating Ministry’s Responsibilities Considered Overlapping
Director of Economics at the Center of Economic and Law Studies (CELIOS), Nailul Huda, expressed similar doubts. He argued that the responsibilities of the new coordinating ministry overlap with the authority of the Coordinating Ministry for Economic Affairs.
Huda also expressed pessimism about the direction of the clean energy transition. He noted that the individual leading the new coordinating ministry has a track record and strong ties to the mining sector.
“I am actually concerned that ‘energy’ here means further development of fossil energy rather than renewable energy. I therefore believe Bahlil’s appointment will only strengthen his position in determining how energy is used according to his own preferences,” he told CNNIndonesia.com in a separate interview.
He likened the Coordinating Ministry for Downstreaming and Energy Transition to an aircraft carrier steered by a problematic captain. The risk, he argued, is that energy transition policies could veer off course.
“The aircraft carrier will also lose its direction by following smaller ships that were already heading in the wrong direction. None of them will reach the destination of the renewable energy transition because their captain does not share the same objectives,” Huda said.
Contradictions Between Downstreaming and Energy Transition Agendas
The Publish What You Pay (PWYP) Indonesia Coalition has highlighted the fundamental contradiction between downstreaming and energy transition agendas housed under a single ministry. Downstreaming is closely associated with the processing of minerals and coal, whereas the energy transition requires reducing dependence on fossil fuels.
The establishment of this coordinating ministry further expands the number of ministries in the Red and White Cabinet. For businesses in the energy and mining sectors, the lack of clarity surrounding the coordination structure could potentially slow down licensing procedures and policy consultations, which have traditionally been handled through the Coordinating Ministry for Economic Affairs.
Source: BantenKlik.com