OFFSHORE Indonesia – The issue of oil and gas mafia is still a public concern to this day. Various attempts have been made by the government to close the space for the oil and gas mafia, ranging from an overhaul of officials in the oil and gas sector institutions to form an oil and gas governance reform team. The effort should be appreciated. However, Indonesia’s Civil Society Coalition Publish What You Pay (PWYP) considers that the root cause of the rampant practice of rent in the oil and gas sector is due to the legal umbrella in the oil and gas sector which still has many gaps. In addition, the House of Representatives (DPR) which until now still continues to postpone discussions regarding the revision of the Oil and Gas Law.

The PWYP Coalition prepared a draft revised version of civil society’s alternative Oil and Gas Law which was coordinated by the Indonesian Center for Environmental Law (ICEL) in an effort to close the space for oil and gas mafia. This draft revision of the Civil Society Law version offers a number of points including changes in the upstream institutional model, the fulfillment of the right to information and public access to the oil and gas industry, the formation of petroleum funds, community involvement in the process of determining Work Areas, and planning aspects.

Nisa Istiqomah, Researcher of the Indonesian Center for Environmental Law (ICEL) said in the draft version of this civil society it offers a number of main points of change. First, changes in the upstream oil and gas institutional model that allows the process of checks and balances while adjusting to the Constitutional Court’s decision mandate. This institutional model places the policy and oversight functions of the government and the function of oil and gas management to SOEs. “It is hoped that with this model, strong institutions can be formed, do not overlap in terms of authority, strengthen the state’s position in the management of oil and gas, and do not create rent opportunities for oil and gas mafia, so that all aspects of state control that are mandated by Article 33 of the 1945 Constitution can be implemented clearly,” she said.

Second, one of the points pushed to close the gap for the oil and gas mafia in the revision of the Oil and Gas Law is to guarantee the fulfillment of the right to information, participation and public access to the industry along the extractive industry process chain including the opening of KKKS contracts, calculation of DBH, real-time lifting data, oil and gas production data, sales and revenues of state-owned oil and gas, AMDAL documents, etc. “The EITI (Extractive Industry Transparency Initiative) mechanism will also be endorsed more strongly in the revision of the Oil and Gas Law,” she said.

Maryati Abdullah, PWYP Indonesia’s National Coordinator said that the third input point from other civil society was the formation of the Petroleum Fund, as a fund from oil and gas revenues which was set aside and managed accountably to support the government’s agenda. “The goal is for three things, the transfer of fossil energy to clean renewable energy; development of oil and gas infrastructure such as refineries, natural gas distribution networks, liquid natural gas terminals, etc; and activities related to new oil and gas reserves,” she explained.

Aiden Yusti, Chairperson of the Institute for the Empowerment of Democratic Action – a member of the PWYP Indonesia coalition – added that community involvement was in the process of determining the Working Area. There is an obligation to pay attention to community concerns around the mine in consideration of extracting or not extracting oil and gas reserves, including the rights of indigenous peoples. “In addition, the fulfillment of regional rights in participating interests (PIs) also needs to be managed with BUMD governance and strong capital strategies, so that the right of regional PIs becomes a political hunt for new rents that are more beneficial to investors than the public,” said Aiden originating from Riau, which is known for oil and gas-rich regions.

Finally, Carolus Tuah from the East Kalimantan Working Group 30 – PWYP Indonesia coalition member – said that the planning aspect must also be a concern. According to him, based on discussions by civil society oil and gas management must be based on integrated oil and gas planning with several things including policies to meet national energy needs as mandated by the Energy Law; “Apart from those aspects of environmental management planning and natural resources and spatial planning. This oil and gas planning should also be part of the RPJM and RPJP,” said Tuah.

To note, the discussion of the revised version of the alternative Oil and Gas Law for civil society began on 28 February 2014 and continues. The method used in preparing the draft is a focus group discussion (FGD) with civil society coalition friends and experts, as well as interviews. | Wednesday, 17 December 2014 16:37:00 WIB