March 4, 2015, Editor Cundoko

MigasReview, Jakarta – Publish What You Pay (PWYP) has encouraged the Oil and Gas Governance Reform Team (TRTKM) to submit a draft revision of the Law on Oil and Gas (Law on Oil and Gas) No.22 / 2001 version of civil society to the government to be passed in parliament.

PWYP Indonesia National Coordinator Maryati Abdullah rate, Law 22/2001 has given birth to a new institution called BP Migas with the status of BHMN, so it cannot conduct business activities. Third, Law 22/2001 causes the mismanagement of Indonesia’s natural resources which causes failure in making the oil and gas industry a buffer for national energy security.

According to Maryati at the TRTKM office, Jakarta, on Tuesday (3/3), the mismanagement of oil and gas was marked by the absence of oil and gas management and utilization roads, the presence of oil and gas mafia, and inefficiency of operational costs (cost recovery).

“Fourth, Law 22/2001 creates a national energy policy that tends to be sectoral and is oriented only to the aspect of income, not to national security in the energy sector. Fifth, Law 22/2001 forgets downstream activities and tends to upstream oil and gas activities, “said Maryati.

For this reason, Maryati proposes the material for regulating the revision of the Civil Society’s Oil and Gas Law which contains arrangements for responding to the problems of Law 22/2001.

She also seeks to synergize it with environmental protection and management, the principle of transparency and participation which includes, including oil and gas management planning.

“The planning includes first, a comprehensive approach to upstream and downstream activities. Second, synchronize various government policy plans related to meeting national energy needs. Third, aligning the oil and gas utilization and management policy with policies in the environmental, spatial, land sector sectors, “explained Maryati.

Furthermore, according to Maryati, the upstream oil and gas institutional model are no longer in accordance with the Constitutional Court’s decision as the state carries out overall management of oil and gas so that the state controls oil and gas resources as national wealth. Furthermore, the organizers of the regulation and management functions by the Minister of Energy and Mineral Resources are managed by upstream oil and gas business activities, which are then carried out by KKKS together with BUMD, cooperatives, and private legal entities or permanent establishments.

However, said Maryati, the regulatory function must be through the preparation of regulations and legislation as well as granting permits. What also needs to be done is concerning the management function that must be carried out by SOEs. Finally, there is a supervisory function to supervise upstream and downstream oil and gas activities.

“So the supervisory body must consist of five people representing elements of the government, SOEs managing/business entities, civil society, academics, and the business world,” explained Maryati.

Then, continued Maryati, the existence of a petroleum fund, funds from oil and gas revenues that were set aside and managed accountably for independence and energy security.

“So the petroleum fund aims to divert fossil energy into clean and renewable energy; for the development of oil and gas infrastructure such as refineries, natural gas distribution networks, liquefied natural gas terminals and others; and activities related to the search for new oil and gas reserves, “said Maryati.

Furthermore, Maryati revealed, the existence of a random market obligation (DMO) must be prioritized to meet domestic oil and gas needs, and the magnitude of the DMO was determined by the government every five years by taking into account the DPR’s consideration.

Furthermore, said Maryati, the existence of a new upstream oil and gas institutional model and cost recovery carried out by the managing SOE. The closure in determining and detailing cost recovery so far is suspected to provide opportunities for collusion and corruption practices as confirmed in the BPK audit findings in 2013. At that time it was found that the cost deviation payment cost deviation amounted to the US $ 221.5 million (Rp2.25 trillion) in the period 2010-2012.

“The application of transparency is the key to increasing the accountability of cost recovery calculations paid to KKKS,” said Maryati.

In the revision of the Oil and Gas Law, according to Maryati, it is necessary to have a tasting interest (PI). However, the problem that often occurs in PIs is that regions are not able to take all PI rights unless they hold a private sector. This makes the goal of the PI, which is to involve and provide benefits to local governments, regional companies, and residents to be unmet.

The revision of the Oil and Gas Law encourages BUMDs to borrow from financial institutions such as the Government Investment Center (PII) or issue bonds to raise funds from the public. “In addition, BUMDs that can take PIs are BUMDs with 100% capital ownership controlled by regional governments,” said Maryati.

The revision of the Oil and Gas Law also needs to protect the impact of oil and gas activities aimed at aspects of occupational health and safety, the environment, and land acquisition.

Furthermore, the revision of the Oil and Gas Law must have an information and participation system to guarantee information disclosure and community participation in oil and gas activities in Indonesia.

“The aspect of information disclosure and participation has become an important element in realizing state administration in accordance with the principles of good governance. Therefore, the revision of the Oil and Gas Law encourages the strengthening of information disclosure and community participation in the management and protection of oil and gas, “she said.

Meanwhile, Head of the Oil and Gas Governance Reform Team (TRTKM) Faisal Basri said, his party would accommodate all the draft revisions of the Oil and Gas Law both from the DPR, the government, PT. Pertamina (Persero), as well as the civil society version.

“We will mediate all input from the draft revision of the Oil and Gas Law to be followed up,” she concluded. (aw)

Source: MigasReview