KedaiPena.com – The Publish What You Pay (PWYP) Indonesia coalition has taken a critical stance on Constitutional Court Decision No. 160/PUU-XXIII/2025, which declared the phrase “through a priority mechanism” for cooperatives, sole proprietorships, micro, small, and medium enterprises (MSMEs), and business entities owned by religious mass organizations in Article 51(1) and Article 60(1) of Law No. 2 of 2025 to be conditionally constitutional, provided that Mining Business Permit Areas (WIUPs) are granted only through clear, objective, transparent, and accountable criteria, rather than direct appointment.
In principle, PWYP Indonesia maintains that competitive public auctions remain the most merit-based, equitable, and corruption-resistant mechanism for allocating rights to exploit non-renewable natural resources.
The coalition argues that any form of priority allocation still risks becoming a vehicle for expanding new mining frontiers amid Indonesia’s persistent governance failures.
At the same time, the Court’s ruling returns the debate to its most fundamental question: state control over natural resources is not simply about who receives a permit, but whether the process can be publicly justified and held accountable.
“This ruling only addresses procedural issues, not the root of the problem. State control over natural resources must not be held hostage by discretionary authority disguised as affirmative action,” said Aryanto Nugroho, National Coordinator of PWYP Indonesia, in a statement received by the editors on Friday (July 24, 2026).
The Trap of Technical Regulations and the Risk of Secrecy
PWYP Indonesia warns that the Constitutional Court’s decision could become little more than a paper formality if its implementing regulations—particularly the revision of Government Regulation (PP) No. 39 of 2025, the second amendment to Government Regulation No. 96 of 2021 on the implementation of mineral and coal mining activities—are drafted without meaningful public participation and transparency.
Aryanto identified three major loopholes that could reduce the Court’s requirement for “objective, transparent, and accountable” criteria to little more than procedural rhetoric.
First, assessment criteria could be carefully tailored to benefit only certain applicants while excluding others on unequal grounds.
Second, without public disclosure of applicants and evaluation results, the selection process among priority applicants would remain virtually impossible for independent parties to verify.
Third, without mandatory beneficial ownership disclosure, cooperatives, MSMEs, or companies owned by religious organizations could merely serve as fronts for larger corporations or investors that are not actually entitled to preferential treatment.
According to PWYP, these concerns are not hypothetical.
The enactment of Law No. 2 of 2025, the Fourth Amendment to the Mineral and Coal Mining Law, faced widespread criticism—including from PWYP Indonesia—for being rushed through Parliament, discussed outside the 2025 National Legislative Program (Prolegnas), and lacking meaningful public participation.
If the implementing regulation is drafted using the same approach, a regulation intended to guarantee transparency could itself emerge from an opaque process.
“As an implementing country of the Extractive Industries Transparency Initiative (EITI), Indonesia is obligated to comply with internationally agreed standards. Requirement 2.2 of the 2023 EITI Standard requires implementing countries to disclose licensing procedures, selection criteria, lists of applicants, and beneficial ownership information for every mining license allocation,” Aryanto explained.
However, during the 2024 EITI Validation, Indonesia received a score of only 67 out of 100, highlighting persistent structural shortcomings ranging from inconsistent data to weak policy follow-up.
“In other words, the transparency required by the Constitutional Court is not merely about complying with Indonesia’s Constitution. It is also an opportunity to close the gap between Indonesia’s international commitments under the EITI and the reality of mining license governance,” Aryanto added.
Not a New Concern
PWYP Indonesia researcher Muhammad Adzkia Farirahman (Azil) emphasized that the issues addressed in the Constitutional Court ruling are far from new.
He traced the problem back to Law No. 3 of 2020, which allowed the direct extension—without competitive auctions—of Contracts of Work (CoWs) and Coal Contracts of Work (PKP2B).
“Granting preferential access through a ‘fast-track’ priority mechanism, without adequately considering ecological interests, environmental protection, and sustainable energy development, creates excessive incentives for the exploitation of non-renewable natural resources,” Azil said.
A Momentum to Reform Governance, Not Expand Mining Permits
While awaiting the completion of revisions to Government Regulation No. 39 of 2025, PWYP Indonesia called on the government to impose a temporary moratorium on all new mining permits, regardless of the allocation mechanism, until objective, transparent, and accountable criteria are fully established and publicly verifiable.
The coalition also argued that this period should be used to complete follow-up actions on the findings of the Forest Area Enforcement Task Force (Satgas PKH), which identified 4,265,376.32 hectares of forest land opened for mining activities without the required Forest Area Borrow-and-Use Permit (IPPKH) and has already taken enforcement actions against dozens of problematic mining companies.
PWYP warned that land reclaimed through the Task Force’s enforcement efforts must not simply be redistributed as new priority WIUPs without applying the same objective, transparent, and accountable standards.
Otherwise, the government would merely shift opportunities for abuse of authority from one licensing mechanism to another rather than eliminating them.
PWYP Indonesia’s Recommendations
In response to the Constitutional Court ruling, PWYP Indonesia urges the government to:
- Impose a temporary moratorium on all new mining licenses, including those allocated through the priority mechanism, until implementing regulations have been revised.
- Publicly disclose the status of law enforcement actions related to problematic mining permits identified by the Forest Area Enforcement Task Force (Satgas PKH).
- Maintain competitive public auctions as the primary mechanism for allocating mining licenses.
- Ensure that revisions to Government Regulation No. 39 of 2025 are drafted transparently, inclusively, and free from conflicts of interest.
- Guarantee public disclosure of selection criteria, evaluation methodologies, applicant lists, and assessment results used in determining priority status, including mandatory beneficial ownership disclosure, in accordance with Requirements 2.2 and 2.5 of the 2023 EITI Standard.
- Ensure that Free, Prior and Informed Consent (FPIC) of affected communities is treated as a mandatory prerequisite for granting priority WIUPs.
- Conduct independent environmental compliance audits and financial audits of priority WIUP implementation, and publish the results regularly.
- Disclose to the public the criteria, applicants, evaluation outcomes, and beneficial ownership information for every priority WIUP allocation, consistent with Indonesia’s commitments under the 2023 EITI Standard.
PWYP concluded that the debate over who deserves preferential treatment should not overshadow a much more fundamental question:
Does Indonesia’s mining governance genuinely reduce dependence on extractivism and distribute its benefits fairly, or does it merely transfer privileges from one favored group to another?
Source: Kedai Pena