TRIBUNPONTIANAK.CO.ID, JAKARTA – Indonesian Civil Society Coalition Publish What You Pay (PWYP), urged President Joko Widodo and Minister of Energy and Mineral Resources (ESDM) Ignasius Jonan to cancel the policy of relaxing mineral exports, both for exporting raw minerals, both for exporting raw materials (ore material) and concentrate.

PWYP Indonesia’s National Coordinator, Maryati Abdullah, in her release on Tuesday (1/17/2017) said, President Jokowi had to revoke Government Regulation (PP) Number 1 of 2017 concerning the Fourth Amendment to PP No.23 / 2010 concerning Implementation of Mining Business Activities Minerals and Coal.

Including also instructing the Minister of ESDM to revoke Ministerial Regulation (Permen) ESDM No.5 / 2017 concerning Increasing Mineral Value Added through Domestic Mineral Processing and Refining Activities and ESDM Ministerial Regulation No.6 / 2017 concerning Procedures for Requiring the Provision of Mineral Sales Implementation Recommendations to Overseas Processing and Purification Results.

Maryati Abdullah mentioned, the three regulations issued on January 11, 2017, provide a way for the government to grant licenses to export nickel and bauxite that have not been refined or low-grade, namely nickel with a level of below 1.7 percent and bauxite that has been leached (both can be categorized as raw material).

Furthermore, this regulation provides an opportunity to change the status of a mining company from a Work Contract (KK) to a Mining Business License (IUP) and Special IUP (IUPK), without going through the process stipulated by Law Number 4 of 2009 concerning Mineral and Coal Mining (Minerba Law ).

“In addition, this regulation also provides concessions for IUPK to export concentrates for the next 5 (five) years,” Maryati said.

Maryati said, “The government has openly issued policies that contradict the mandate of the Minerba Law article 102 and 103 which require mineral and coal companies to process and refine their mining products domestically.

“This is at the same time contrary to article 170, which requires all KK holders who have been producing to purify no later than 5 (five) years since the Minerba Act was enacted in 2009,” he said.

Maryati asserted that the government was also clearly not subject to the Constitutional Court Decision Number 10 / PUU-XII / 2014 which strengthened the domestic processing and refining obligations and stated that the spirit of the Minerba Law was in line with Article 33 of the Basic Law (UUD) 1945 because this obligation directly or indirectly provides the greatest benefit for the prosperity of the people.

Aryanto Nugroho, Advocacy Manager of PWYP added, “The granting of export relaxation of concentrate for the next 5 (five) years, makes a total of 13 (thirteen) years of time given to mining entrepreneurs to build downstream industries since the Minerba Act was passed.

“This relaxation series completes the list of government inconsistencies related to the downstream policy since the issuance of ESDM Ministerial Regulation No. 20 of 2013, ESDM Ministerial Regulation No. 1 of 2014, ESDM Ministerial Regulation No. 5 of 2016 until the issuance of the latest ESDM Ministerial Regulation,” said Aryanto.

Although the Government imposes minimum restrictions on the results of processing and refining, as well as requiring provisions for the processing of export licenses such as the obligation to build a smelter.

This has actually been done before, only, the fact since 2014 there has been no significant development, because the government continues to make easing. From around 6,541 Mineral IUPs, of which 4,019 are Production Operations IUPs, only 26 smelters are ready to operate.

“We suspect that this is an attempt to ‘wash hands’ of the government over the government’s failure to carry out the mandate of the Minerba Law, especially related to downstreaming. In addition, we believe that the series of relaxation rules is an effort to provide convenience and privileges for a number of COW companies and certain companies that produce nickel and bauxite without being processed and refined, “explained Aryanto.

Trigger Natural Damage

The Director of the Swandiri Institute of West Kalimantan, Hermawansyah, revealed that the relaxation policy on mineral exporters will continue to increase the rate of exploitation of natural resources, amid the low carrying capacity of the environment and the vulnerability of social conflicts from mining activities that occur in many areas.

A report from the University of Indonesia Institute of Economic and Community Research (LPEM UI) in 2016 states that the policy of banning exports of raw materials has reduced illegal mining practices.

So, with the opening of the raw mineral export tap, it can certainly trigger the existence of illegal mining. In this report, what is meant by illegal mining is not limited to unlicensed activities, but can be in the form of licensed companies but producing above the quota or mining outside the permitted area, or carrying out bad mining practices.

“In line with the LPEM UI report, the Swandiri Institute together with the West Kalimantan Eyes of the Forest (EoF) network found that 95% of the Mining and Business License (IPU) status is Clean and Clear (CnC) which overlaps with forest areas that do not have a Borrow and Use Area License Forests (IPPKH). We cannot imagine the damage like what else will destroy the earth of West Kalimantan, “said Hermawansyah.

Hermawansyah explained that the policy prohibiting the export of raw and processed minerals is part of an effort to control the issuance of IUP as well as in line with the efforts of the Corruption Eradication Commission (KPK) together with the Ministry of Energy and Mineral Resources to conduct IUP structuring. Until 20 December 2016, there were still around 3,386 IUP Non-CnC status, where around 2000 of them are Mineral IUP.

PWYP Indonesia researcher Rizky Ananda revealed that the relaxation policy on raw mineral exports had broken the promise of the Jokowi-JK government in Nawa Cita, namely the mining sector’s Value Added (PNT) policy.

“The government should be busier to formulate a comprehensive strategy from upstream to downstream to ensure policy implementation in the mineral and coal sector; ensure the progress of all smelter construction; as well as coordinating with relevant ministries for the development of downstream industries, “he added.

Source: here.|In Media, Media Coverage|PWYP Indonesia|January 20th, 2017