Extractive Industries Transparency Initiatives (EITI) is a global initiative implemented in 55 countries, including Indonesia, to encourage transparent and accountable governance of the oil, gas, and mining sectors implemented in 55 countries, including Indonesia. EITI is present based on concerns about managing the extractive resource sector in several countries that could have been more optimal in improving people’s lives, leaving environmental and social problems. EITI aims to encourage collaboration between stakeholder groups in improving extractive sector governance. The implementation of EITI in Indonesia is regulated in Presidential Regulation (Perpres) Number 26 of 2021 concerning Transparency of State and Regional Revenues obtained from the Extractive Industry and further updated through Perpres Number 82 of 2020 concerning the Committee for Handling Coronavirus Disease 2019 (Covid-19) and National Economic Recovery.

In the context of governance of the mineral and coal mining sector (Minerba), Indonesia is entering a new phase through the ratification of Law (UU) Number 3 of 2020, which is an amendment to Law Number 4 of 2009 concerning Minerba Mining. One of the impacts of this regulatory change is the withdrawal of local government authority in mining management, both in licensing and supervision. Meanwhile, the implementing regulations mandated by Law Number 3 of 2020 have yet to be issued. It makes the situation of mining governance a gray area that has the potential to cause many new problems in the field.

These problems are also faced by East Kalimantan Province (Kaltim), one of the largest coal-producing provinces in Indonesia. For example, the rampant illegal mining that escapes supervision and prosecution. On the one hand, there are only 30 mining inspectors in East Kalimantan to supervise 430 operating Mining Business Licenses (IUP) (MEMR, 2021). Publish What You Pay (PWYP) Indonesia and Pokja-30, in collaboration with the EITI Indonesia Secretariat, the Ministry of Energy and Mineral Resources (MEMR) held a Multi-Party Forum on the Socialization of EITI Indonesia Report: Collaborative Social Accountability for Improving Mining Sector Governance in East Kalimantan Province on Wednesday, July 21, 2021, online. This activity is also a forum for disseminating the 8th EITI report and a diagnostic study of mining license governance issues conducted by PWYP Indonesia and Pokja-30.

This activity began with the presentation of the results of PWYP Indonesia’s scoping study related to the diagnosis of mineral and coal mining licensing governance issues, by which the findings also explained the problems of mining licensing governance in Aceh and Indonesia in general. Rizky Ananda, PWYP Indonesia Researcher, conveyed his conclusions, including:

  1. Regulatory issues consist of inconsistency and weak enforcement of regulations.
  2. Limited personnel, authority, and budget impact in institutional matters.
  3. Transparency aspects relating to closed licensing processes and constraints on access to information.
  4. Vulnerable community participation is still at the representation stage due to the limited space and vulnerable community capacity.
  5. Weak control and coordination functions that reflect the decentralization of mining licensing.

Furthermore, Sampe L. Purba, Expert Staff to the Minister for Economy and Natural Resources, also the Head of the EITI Indonesia Secretariat, conveyed the development of EITI implementation. Indonesia itself has just published the 81st EITI Indonesia report for the 2018 fiscal year, which is quite different from the previous year’s account due to the impact of the COVID-19 pandemic. Still, the spirit of extractive industry transparency is maintained as a form of a mandate that has been given. This 2018 EITI report or flexible report still refers to the 2019 EITI Standard but eliminates data reconciliation activities. Implementing EITI reporting standards in Indonesia is affected by government policies handling Covid-19 and national economic recovery.

The report contains contextual information that provides a comprehensive overview of the legal framework and governance mechanisms of the oil and gas and mineral and coal sectors, types of contracts/permits and license processes, as well as payments and outcome schemes between companies and the government at the central and local levels and the extractive industry in Indonesia in the form of effects on production and state revenues and efforts made by the government to overcome the impact of the Covid-19 pandemic. This report also provides information on allocating Community Development and Empowerment (CDE) funds to corporate social responsibility.

In response, Sunindyo Suryo Herdadi, Director of Mineral and Coal Program Development and Directorate General of Mineral and Coal, MEMR, conveyed the efforts and innovations that have been made. Among them, the openness of mining permit data where the public can access mining permit data through MODI (Minerba One Data Indonesia); innovation in mining supervision guidance from regulatory harmonization between the Job Creation Law 11/2020 and the Minerba Law 3/2020; online licensing innovation; and integration of many applications. Despite the efforts that have been made, it is recognized that mining management has some challenges going forward. Among them is verification of permits issued by local governments in the context of transferring authority to the center, issuance of non-metal mineral and rock IUPs, structuring inactive permit holders, mining without permits (PETI), ex-mining pits, and downstream.

Meanwhile, Azwar Busra, Head of the Mining Division of the East Kalimantan Energy and Mineral Resources Agency, shared the (field) problems faced in East Kalimantan: license data that is not synchronized with the central government and the rampant PETI in active concession areas as a result of suboptimal supervisory performance. Distant concession areas and the limited mining inspectors and budget were cited as causes of this supervision problem. The need for collaboration with civil society was also raised, especially with implementing regulations or policies in the field.

PERHAPI representatives emphasized the urgency of regulatory issues in the mining sector, including inconsistencies and weak law enforcement. The need for data disclosure, especially on reserves and prospects for auctioned concession areas, was also conveyed. While APBI highlighted the importance of public involvement in discussing derivative regulations from Law Number 3 of 2020, it also raised good practices carried out by companies in environmental management so that the narrative that emerged to the public was more balanced.

Representatives of civil society organizations who attended conveyed many notes. Among them are the process of handling complaints related to the impact of mining, where there is a tendency to “throw responsibility” between agencies, and the handling is slow. Also, the follow-up of expired licenses, law enforcement against PETI, handling of ex-mining pits, and the performance of information disclosure could be more optimal (the public needs information on company compliance and AMDAL documents, not just license area). Meanwhile, residents of the mining circle were represented by a women’s group from Sungai Payang Village. The significant issues raised by residents are waste management due to mining activities, land acquisition, and PETI.

In this multi-stakeholder forum discussion, all stakeholders were active in expressing their opinions. The organizers also responded and recorded complaints submitted by participants, which are expected to make the mining sector in East Kalimantan even better.

  1. The 8th EITI Indonesia Report can be downloaded through the following link: https://eiti.esdm.go.id/laporan-eiti-indonesia-8-2020/