Jakarta – A number of civil society organizations under the Publish What You Pay (PWYP) Indonesia Coalition have raised concerns about the accelerated process of the House of Representatives (DPR RI) in deliberating the Oil and Gas Bill (RUU Migas). Following a meeting between the Legislative Body (Baleg) and Commission XII on Monday, April 13, 2024, the DPR is now preparing to establish a Working Committee (Panja) to discuss a complete overhaul of the existing Oil and Gas Law.
The PWYP Indonesia Coalition emphasizes that amid geopolitical uncertainty and the looming climate crisis, this bill must not merely serve as an administrative instrument but must provide concrete solutions to national energy vulnerability.
Alleged Procedural Flaws and Lack of Transparency
The Indonesian Parliamentary Center (IPC) strongly criticizes the bill’s status: it is not included in the National Legislative Program (Prolegnas) yet is being forced through as a DPR initiative.
“Legally, the Law on the Formation of Laws and Regulations (UU P3U) requires every bill to go through the Prolegnas stage. Forcing the Oil and Gas Bill through the open cumulative mechanism without transparent urgency sets a bad precedent. The DPR should instead focus on finalizing the Climate Change Control Bill (RUU PPI) and the Renewable Energy Bill (RUU EBET), both of which already have clear mandates in the Prolegnas,” said IPC researcher Arif Adiputro.
Net Importer Status Amid Geopolitical Conflict
PWYP Indonesia National Coordinator Aryanto Nugroho stressed that the Oil and Gas Bill must embody a clear vision of energy sovereignty. Indonesia has been a net oil importer since 2008, with consumption reaching 1.5 million barrels per day while reserves continue to decline.
“The current uncertainty due to conflicts in the Middle East demonstrates how fragile our energy security is. The Oil and Gas Bill must not focus solely on attracting upstream investment but must also address how to reduce import dependence. If this bill is not aligned with fossil fuel reduction and energy transition agendas, Indonesia will remain trapped in global energy price volatility,” Aryanto stated.
Alignment with Energy Transition and Climate Justice
PWYP Indonesia urges that the Oil and Gas Bill must not operate in isolation but should align with energy transition and climate justice agendas. The bill must appropriately position the oil and gas sector amid the energy crisis without further increasing Indonesia’s dependence on fossil fuels.
For instance, provisions on Carbon Capture and Storage (CCS) in the bill must not be used as a shield for oil and gas companies to continue production without clear net-zero emission commitments.
Meanwhile, the Indonesian Center for Environmental Law (ICEL) highlights inconsistencies in the bill, which still prioritizes an extractive paradigm, contradicting national climate commitments. The bill prioritizes upstream oil and gas activities over other land uses, including protected forests and conservation areas.
Furthermore, the regulation risks prolonging dependence on high-emission fossil energy, particularly natural gas with high methane concentrations. Methane has a significant environmental impact, and the lack of methane emissions controls in the draft indicates that the bill is not aligned with national emissions-reduction targets and climate justice principles.
“Indonesia’s dependence on fossil commodities amid global geopolitical fluctuations shows that energy security can no longer be narrowly defined as supply fulfillment. The Oil and Gas Bill must go beyond increasing upstream production by integrating concrete energy transition strategies aligned with national climate commitments. This is crucial given the significant risks of methane emissions in the gas sector. Without strong alignment between oil and gas regulation and climate justice, Indonesia risks exposure to global market shocks and losing momentum to build sustainable energy independence for future generations,” said Sylvi, ICEL researcher.
Transparency and Accountability
The Oil and Gas Bill must address current challenges in the sector, including governance issues such as transparency, accountability, and high levels of corruption.
The bill must ensure public access to information regarding documents and processes in awarding production-sharing contracts, while respecting stakeholders’ interests as regulated under Article 17 of the Public Information Disclosure Law (UU KIP).
The bidding and contract award processes must be more transparent and fair, with the government expected to provide clear and open justifications for its decisions.
Corruption Risks vs Policy-Making Fear
Regarding institutional strengthening through a Special Business Entity (BUK) for oil and gas, PWYP Indonesia raises serious concerns. Aryanto highlighted the increasing number of energy sector officials being prosecuted.
“We see a paradox: on one hand, this sector is highly vulnerable to corruption due to massive financial flows; on the other hand, there is a risk of ‘criminalization’ that makes officials hesitant to make strategic decisions. The Oil and Gas Bill must provide a solution through a strong system of checks and balances, not merely legal protection that could lead to immunity,” he emphasized.
Aryanto also criticized the plan to grant BUK authority to directly collect Non-Tax State Revenue (PNBP), as stipulated in Article 48 of the draft.
“PNBP must go directly to the state treasury to prevent leakage. The BUK must not become a ‘state within a state’ or a new hub of corruption. Transparency of beneficial ownership in every oil and gas contract must be mandatory to prevent conflicts of interest.”
Oil and Gas Fund for the Future
Regarding the Petroleum Fund, the coalition urges that it not be used solely for fossil exploration but be specifically allocated to renewable energy development and energy diversification.
“The fund must be managed accountably. We do not want it to be depleted, financing fossil dependence while the world is moving toward clean energy. This fund should be a transition capital, not a tool to indefinitely extend the life of fossil energy,” Aryanto concluded.
Additional Information:
Based on the draft received by the coalition, the Oil and Gas Bill consists of 30 key regulatory points, representing amendments and additions to the current law. The draft contains 20 chapters and 104 articles, compared to the existing law’s 14 chapters and 68 articles.