Now Attentions Turn to the Implementing Regulations of the New Mining Law

ICMA WEBSITES – EDITORIAL (4 AUGUST 2020)

Now Attentions Turn to the Implementing Regulations of the New Mining Law

                Industry hailed the enactment of the Law No. 3 of 2020 on the Amendment of the Law No. 4 of 2009 on Mineral and Coal Mining (“New Mining Law”). Miners issued the positive reaction to the New Law as it provides certainty not only for holders of Coal Contract of Work (CcoW) and Contract of Work (CoW), but also for Mining Business Permit (IUP) and Special IUP. With the issuance of the Law No 3 of 2020 which took effect since 10 June 2020, holders of the 1st generation of CcoW at least have assurances that their future investments would continue. However, implementation of the Law is crucial as the Law, as typical with other laws in the Indonesian law regime, covers only general provisions. Therefore detail provisions will be regulated in the form of government regulations (PP) and possibly with other lower hirarchy of regulations such as Presidential regulation and ministerial regulations.

                The New Mining Law sets out the strict timeline for the issuance of the implementing regulations, which is 1 (one) year after the enactment of the Law. In this case, the deadline would be on the 10th of June next year. However, in the case of mining authority, whereby the authority to manage mineral and coal in the New Law is in the hand of the Central Government, the implementing regulation should be issued earlier. The Law No. 3 of 2020 maintains that regional government should not issue any IUPs (moratorium) for 6 months and until the issuance of the implementing regulation (PP). This provision that perhaps trigger the sense of urgency in the central government (ESDM) that PP (s) should be finalized by December 2020. Informal statements on the timeline have been issued by senior officials from the Ministry as quoted by media. In the recent meeting with the Directorate General of Mineral and Coal, such timeline was mentioned as well.

                With the standpoint of the Government is already clear on the timeline, the focus next would be on the drafting process. Industry associations have the concern over the process of the regulatory drafting, whereby stakeholders granted access only in the final stage of the drafting process. In the other words, the final decision of a draft regulation has been decided by the Government, and stakeholders have minimum access to give inputs. It is like a mere formality on many public consultations or socializations or other terms used by the government. Therefore it is important that access for stakeholders to provide inputs should be given from the earliest phase as possible. In this case, we appreciated an initiative taken by the Technical and Environmental Directorate at the DGMC in the discussion over the revision of  the PP 78 of 2010 on Reclamation and Mine Closure. In first, kick-off, meeting between the regulator and industry associations discussed the outline and important provisions that should be detailed in the new PP (regulation). We hope the Ministry would apply the same approach in the drafting process of the other 2 new PPs.

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