Jakarta – Mediaindonesianews.com, The Publish What You Pay (PWYP) Indonesia coalition has criticized several provisions of the Oil and Gas Bill (RUU Migas), which was agreed upon as a legislative initiative of the Indonesian House of Representatives (DPR RI) on August 18, 2026.
The agreement followed a harmonization meeting between the DPR’s Legislation Body (Baleg) and Commission XII on August 15–16, 2026.
PWYP Indonesia argues that updating regulations governing the oil and gas sector will only constitute meaningful governance reform if the principles of transparency and accountability are explicitly enshrined in the law, rather than left to implementing regulations.
PWYP Indonesia National Coordinator Aryanto Nugroho said that several fundamental issues in the oil and gas sector concern contract disclosure, the management of non-tax state revenue (PNBP), oil and gas funds, and Revenue-Sharing Funds (DBH).
“Most of the problems in the oil and gas sector are about transparency and accountability. These principles must be locked into the law,” Aryanto said.
According to PWYP Indonesia, the urgency of strengthening transparency is also reflected in the findings of the 2024 Extractive Industries Transparency Initiative (EITI) Indonesia validation. Indonesia received a score of 67 out of 100, categorized as fairly low, with transparency among the weakest components assessed.
One of the issues highlighted is the lack of full public disclosure of contract and licensing documents.
“That score is proof that transparency can no longer be left to ministry portals or companies’ annual reports. The Oil and Gas Bill must make disclosure mandatory,” Aryanto said.
PWYP Calls for Oil and Gas Contracts to Be Publicly Disclosed
PWYP Indonesia argues that oil and gas cooperation contracts have historically been difficult for the public to access. The Oil and Gas Bill should therefore clearly require their publication.
This requirement should not be limited to the core provisions of contracts, but should also cover environmental obligations, community development, respect for Indigenous Peoples’ rights, and post-operation obligations.
PWYP also highlighted ambiguity surrounding the upstream contract regime following regulatory changes introduced through the Job Creation Law. According to the coalition, business activities have been placed under a business licensing regime, while upstream activities continue to operate through cooperation contracts.
“This ambiguity must be resolved in the Oil and Gas Bill. A contract should remain a contract, and a license should remain a license. Both must be disclosed, rather than being merged under a single administrative label,” Aryanto stressed.
PWYP Indonesia also called for meaningful participation by local communities and Indigenous Peoples in the designation and bidding of oil and gas working areas.
The Free, Prior and Informed Consent (FPIC) mechanism should be guaranteed before an area is designated and offered for oil and gas activities, the coalition said.
Calls for Stronger State Revenue and Regional Rights
PWYP Indonesia also criticized Article 48 paragraph (1) of the draft Oil and Gas Bill, which states that producing contractors are “only required to pay income tax, land and building tax, and non-tax state revenue.”
Aryanto called for the word “only” to be removed, arguing that it could create problems concerning tax and local levy obligations.
PWYP also called for stronger rights for producing regions through an adequate increase in the Revenue-Sharing Fund (DBH) allocation and transparent management of DBH.
According to PWYP, producing regions should receive benefits commensurate with their production contributions as well as the social and ecological risks they bear.
In addition to DBH, PWYP called for reforms to the governance of Participating Interest (PI) in the oil and gas sector. Regional participation rights in upstream activities should be managed through accountable and transparent regionally owned enterprises (BUMD), the coalition said.
ASR Funds Must Be Transparent
Another issue of concern to PWYP is the Abandonment and Site Restoration (ASR) fund, which is intended to finance environmental restoration following oil and gas operations.
PWYP called for mandatory ASR fund provisioning to be explicitly regulated in the Oil and Gas Bill rather than left solely to ministerial or implementing regulations.
The coalition urged that ASR funds be set aside from the beginning of operations, publicly disclosed, and regularly audited by an independent institution.
PWYP referred to findings by the Audit Board of Indonesia (BPK) in its Second Semester 2025 Audit Results Summary (IHPS II 2025), which identified several weaknesses in the management and control of post-operation funds.
“ASR funds are not idle cash, nor are they merely technical costs for closing wells. The Oil and Gas Bill must ensure that these funds are fully used for environmental restoration, addressing the socioeconomic impacts in producing regions, and preparing for the post-oil and gas transition,” Aryanto said.
He emphasized that the polluter pays principle must underpin environmental restoration.
“The state—let alone producing regions or new contractors—must not be forced to bear the ecological legacy left behind by previous contractors,” he added.
Calls for Protection of Community Rights
PWYP Indonesia also raised concerns about land acquisition provisions for upstream oil and gas activities. The coalition rejected any approach that places operational continuity above community rights.
Provisions concerning land prioritization and acquisition, including Article 52, should establish clear mechanisms while respecting the rights of Indigenous Peoples and local communities.
“Energy security must not become an excuse for the dispossession of people’s living spaces,” Aryanto stressed.
Oil and Gas Bill Must Align with the Energy Transition
In the context of the energy transition and climate change, PWYP Indonesia called for the Oil and Gas Bill not to focus solely on increasing oil and gas production or lifting.
According to PWYP, the bill should be aligned with the Energy Law, the National Energy General Plan (RUEN), and Indonesia’s national climate commitments.
Contractors should also be required to internalize the costs of climate change mitigation, implement measurable and documented emissions reductions—including methane emissions—and prepare post-operation plans aligned with the energy transition agenda in producing regions.
PWYP also warned that the use of Carbon Capture and Storage/Carbon Capture, Utilization and Storage (CCS/CCUS) technology must not become a justification for indefinitely extending dependence on fossil fuels.
“If this bill is not aligned with fossil fuel reduction, Indonesia will simply lock itself into price shocks and the climate crisis. True energy security is not built by adding more fossil fuel desks,” Aryanto said.
Concerns Over the Institutional Design of Oil and Gas Governance
Finally, PWYP Indonesia raised concerns about the institutional design of oil and gas governance, including the proposed Special Oil and Gas Business Entity (Badan Usaha Khusus/BUK Migas).
PWYP called for the entity’s revenues and operational budgets to be subject to strong audit standards and transparent public reporting requirements.
The coalition also called for the Oil and Gas Bill to clarify the division of authority and oil and gas trading arrangements in order to prevent institutional overlaps.
“If the new Oil and Gas Bill does not clearly define who has the authority to manage and trade state-owned gas, the state will have many desks but no single accountable command. The bill must close that gap,” Aryanto concluded.
PWYP Indonesia is a civil society coalition working to improve the governance of the energy and natural resource sectors to make them more democratic and inclusive, while strengthening social and ecological justice.
Source: Media Indonesia