“Dan terjadi lagi… Kisah lama yang terulang kembali..”

The lyrics of Noah’s song Separuh Aku might describe case after case of corruption that ensnares officials in the mineral and coal mining sector. Most recently, on August 9, 2023, the Attorney General’s Office (AGO) of the Republic of Indonesia officially detained Ridwan Djamaluddin, former Director General (Dirjen) of Minerals and Coal of the Ministry of Energy and Mineral Resources (ESDM) and several other officials as suspects in the alleged corruption of nickel ore mining in Mandiodo Block, North Konawe, Southeast Sulawesi (Sultra).

Whereas not long ago, the Corruption Eradication Commission (KPK) had also named at least 10 suspects in manipulating bureaucratic performance allowances at the Directorate General of Mineral and Coal in mid-June this year.

This continuous and repeated corruption case shows that the mineral and coal mining sector is still prone to corruption.

The Publish What You Pay (PWYP) Indonesia coalition urged law enforcement officials to thoroughly investigate the alleged corruption case, whose state losses were estimated at Rp 5.7 trillion. The AGO must explore if there is involvement of other officials, business people, politicians, and other actors. Investigate if there are parties who benefit from the flow of money, including if you have to apply the criminal offense of money laundering and corporate crime for companies involved in this case. PWYP Indonesia also urges the AGO to be transparent to the public in handling this corruption crime.

PWYP Indonesia urges President Jokowi and the Minister of Energy and Mineral Resources to improve governance in a comprehensive and integrated manner.

This case confirms that corruption in the mineral and coal mining sector is categorized as “state capture,” where corruption is not merely administrative involving bribes or facilitation payments, but corruption through its roots, namely corruption through regulations. The AGO said that this case originated from a limited meeting to discuss and decide to simplify the assessment aspects of the work plan and cost (RKAB) of mining companies, as regulated by the Minister of Energy and Mineral Resources Decree Number: 1806K/30/MEM/2018 dated April 30, 2018.

This type of corruption, which can create and change policies to advance the interests of certain groups, should be the Government’s concern.

Prevention efforts must begin to focus on preparing regulations and licensing policies in the mineral and coal mining sector. The government must ensure that the process of formulating policies and regulations is transparent and participatory, not only decided in limited meetings that involve certain officials and business people. But it must be opened to the public, including the involvement of civil society groups and affected communities.

PWYP Indonesia also reminded that one of the problems triggering “state capture” is the lack of attention to the rampant potential for conflicts of interest in the mineral and coal mining sector, for example, concurrent positions of ministry officials as commissioners of BUMN or mining companies.

This case also opens the veil of the “iceberg” of problems related to the vulnerability of corruption in managing mineral and coal mining RKAB. From the data of the Ministry of Energy and Mineral Resources (August 2023), which recorded 31 holders of Contracts of Work (KK), 59 Coal Contracts of Work (PKP2B), 9 Special Mining Business Licenses (IUPK), 852 Mineral Production IUPs, 908 Coal Production IUPs, for example, required DG Minerals and Coal officers to review the RKAB. Although there is already a digitized system, the large number of RKABs that must be checked with review officers opens several gaps, such as protracted queues of RKABs and others. If it is associated with guidance and supervision, that still needs to be stronger.

Contact person:
Aryanto Nugroho, PWYP Indonesia National Coordinator
aryanto@pwypindonesia.org
081326608343