INILAHCOM, Jakarta – The Ministry of Energy and Mineral Resources installed five structural Echelon I officials on Thursday last week. There are two strategic Echelon I positions that are often in the public spotlight, including the Director General of Oil and Gas, and the Director General of Mineral and Coal.

The Minister of Energy and Mineral Resources, Sudirman Said trusted the chair of the Director General of Oil and Gas to I Gusti Nyoman Wiratmaja, while Bambang Gatot was elected to hold the position of Director General of Minerba.

Publish What You Pay (PWYP) Indonesia reminded that the two DGs prioritize a number of homeworks that are still pending to be completed. Maryati Abdullah, PWYP Indonesia’s National Coordinator said, in the oil and gas sector, the new Director General must put Nawa Cita as a guide for oil and gas management in Indonesia, especially related to energy security strategies and lack of inventory of national oil and gas reserves.

“In addition, the Director General of Oil and Gas is also important to oversee the acceleration of the revision of the Oil and Gas Law and ensure that all its substances are in accordance with the constitution and have a strong alignment with the interests of the people,” Maryati said, Sunday (05/10/2015).

According to Maryati, the Oil and Gas Draft Bill must contain a number of amendments to the agenda, the upstream oil and gas institutional model that allows for checks and balances as well as adjusting the mandate of the Constitutional Court ruling. Next is guaranteeing the fulfillment of the right to information, participation and community access to the industry along the extractive industry process chain, including the openness of the PSC contract, lifting information, state revenue and transparent crude oil sales/purchases.

“The establishment of sovereign wealth funds and petroleum funds as funds from oil and gas revenues which are set aside and managed accountably to support the government’s agenda for welfare and energy development. In addition, there is an obligation to pay attention to community concerns around the mine in consideration to extract or to not extract the oil and gas reserves, including the rights of indigenous peoples, “explained Maryati.

In addition, the Director General of Oil and Gas must also be the commander in an effort to prevent oil and gas mafia practices that are suspected of playing in every value chain of the upstream and downstream oil and gas industries. One of them is related to the practice of rent-seeking in managing participating interests for the region.

“Based on data from the Special Task Force for Upstream Oil and Gas Activities (SKK Migas) there are at least 25 oil and gas block contracts that will expire in the next five years, so that in the future issues related to regional interests towards participating interest will be a lot of discussion,” said Maryati.

Aryanto Nugroho, Advocacy Manager and PWYP Indonesia Network explained, for the mineral and coal sector that must be the focus of attention, among others related to downstreaming and increasing mining value added, renegotiation of Contract of Work (KK), and structuring mining licenses and enforcing environmental and social standards from mining activities. The Director General of Mineral and Coal must immediately complete the renegotiation process of the KK and the Coal Mining Concession Work Agreement (PKP2B) in a transparent and accountable manner.

He added, until the renegotiation deadline given Law No. 4/2009 on Minerba, it turned out that only 1 KK signed the amendment, 20 KK and 21 PKP2B agreed and signed an MOU, 8 KK and 12 PKP2B still agreed on part of the contents of the MOU and 5 KK and 9 new PKP2B agreed to the draft of the amendment of a total of 34 KK and 73 PKP2B.

“The renegotiation is mainly related to 6 strategic issues: the size of the work area; continuation of mining operations; state revenue; processing and refining obligations; divestment readiness; the obligation to use domestic mining workers, goods and services,” said Aryanto

Related to mining governance problems, Agung Budiono, Program Manager of Forest and Land Management of PWYP Indonesia said, the government must immediately complete the arrangement of 4,296 Mining Business Licenses (IUP) which are still in Non CNC status, overlapping mining areas with forest and plantation areas up to supervision of the implementation of reclamation and post-mining guarantees. Non-tax state revenue (PNBP) in the mining sector were not yet optimal, both from royalties and land rent must also get attention.

“Based on the calculation of PWYP Indonesia, the potential lost from land rent payments in 2009-2013 in 12 provinces alone reached Rp 919.18 billion,” he said. In addition, continued Agung, the new Director General of Mineral and Coal must also continue to work with the KPK which has been running well in coordination and supervision in the Minerba sector.

Maryati added, both the Director General of Oil and Gas and the Director General of Mineral and Coal must ensure re-implementation of the Extractive Industries Transparency Initiative (EITI) commitment as stated in Presidential Regulation No. 26 of 2010 concerning Transparency of State and Regional Revenues Received from the Oil and Gas Extractive Industries and Mining Sector.

“The Ministry of Energy and Mineral Resources has an important role in restoring Indonesia’s status as an EITI Compliant Country which was declared suspicious by the International EITI Board on February 26, 2015, because it was considered too late to publish the EITI report for the 2012-2013 period,” he said. [jin] – See more at: