KPK Will Review Contracts of Work in Regions

JAKARTA, KOMPAS – The practice of corruption of natural resources especially in the mining sector related to licensing collusion and misappropriation of state revenue, is increasingly widespread. President Joko Widodo should form an anti-mafia task force in the mining sector to eradicate it.

Anti Mafia Mining Coalition activists explained this in Jakarta, Sunday (7/12). This coalition includes a number of organizations, including the Indonesia Corruption Watch, the National Secretariat of FITRA, Indonesian International Transparency, Chairperson of the Muhammadiyah Central Community Empowerment Council, Publish What You Pay (PWYP) Indonesia, and Auriga.

PWYP Indonesia Coordinator Maryati Abdullah explained, Indonesian mining governance is still weak. From 10,648 of mining business permits in 2014, 4,672 licenses (43.87 percent) were problematic.

The number of troubled mining permits has jumped sharply in the last five years as mining business growth in regions with natural resource wealth (SDA). The Anti-Mafia Mining Coalition notes that mining business permits only reached 2,500 in 2009.

Maryati said that 1.37 million hectares of mining permits were in conservation forest areas. This violates Law Number 41 of 1999 concerning Forestry which prohibits mineral and coal mining activities in conservation areas.

Corruption practices related to the exploitation of natural resources mostly involve the licensing authorities, namely the heads of regions and officials of the relevant ministries.

“Law enforcement officials need to be more serious in handling cases of natural resource crimes in the mining sector,” said Maryati.

Separately, the Head of the Financial Transaction Reports and Analysis Center (PPATK) Muhammad Yusuf said, the mining sector is one of PPATK’s focuses in tracing money laundering practices. So far, PPATK has found many suspicious transactions related to mining.

Bribery mode

The KPK also alleged that the bribery mode to the Chairperson of the Bangkalan Regency of the House of Representatives, East Java, Fuad Amin Imron occurred in many areas that received natural resource revenue-sharing, both minerals, coal, as well as oil and gas. One mode is to use local companies that should get a share of revenue sharing, but in reality only be used by private parties for their interests.

KPK Deputy Chairman Bambang Widjojanto revealed, the KPK suspected the bribery mode of PT Media Karya Sentosa (MKS) to Fuad could not be separated from the gas ration for Bangkalan District obtained from Pertamina Hulu Energi West Madura Offshore. The Regional Government-owned Regional Company of Bangkalan Regency that received the allotment even gave it to PT MKS which was allegedly full of collusion.

Bambang said, the KPK would invite a number of relevant stakeholders, such as the Ministry of Energy and Mineral Resources and the Special Task Force for Upstream Oil and Gas Activities, to review mining contracts of work in the regions, especially in areas receiving production allotments. (FAJ/BIL)

The printed version of this article was published in the Kompas daily edition of December 8, 2014, on page 3 with the title “Corruption SDA Marak”.