The Ministry of Energy and Mineral Resources (ESDM) stipulates the Work Plan and Expenditure Budget (RKAB) for mineral and coal mining companies to be valid for three years, from the current one year.
This change is related to the Attorney's steps in naming a number of suspects, including the former Director General of Mineral and Coal at the Ministry of Energy and Mineral Resources with the initials RD who was implicated in a corruption case related to the RKAB determination.
ESDM Minister Arifin Tasrif said the RKAB applies to mining companies entering the production phase. He emphasized that the implementation of this new provision will start next year. "Formerly the RKAB for production is now given 3 years every year," said Arifin in Jakarta, Thursday (31/08/2023).
Arifin said, another arrangement is by applying information technology in the process of ratifying the RKAB. This effort is expected to accelerate the ratification of the RKAB and be transparent. He said the improvement of information technology continues to be accelerated because it is targeted to be implemented next year.
It is said, the Ministry of Energy and Mineral Resources handles 6,000 RKAB submissions annually after the stipulation of Law no. 3 of 2020 concerning Mineral and Coal Mining. The regulation allows the authority of the local government to be transferred to the central government in ratifying the RKAB. Arifin said the ESDM Ministry had tried to speed up the process by simplifying the requirements. "We have simplified the 27 requirements into 5," he said.
Separately, the Chairman of the Indonesian Mining & Energy Forum (IMEF) Singgih Widagdo said that the complexity of managing the mining industry is currently very hard to deal with as it is solely the responsibility of the Ministry of Energy and Mineral Resources. The presence of laws and policies in integrating and coordinating the interests of the Government, Corporations and the People, often creates a conflict of interest itself.
The legal issues that must be faced by various officials in various echelons of the Ministry of Energy and Mineral Resources, make it clear and show that managing the mining industry in this political space becomes very complex. Accelerating and facilitating a policy to manage various interests in the mining industry can actually be a potential violation of the law for the officials concerned in the future.
"If this condition is neglected, without substantial improvement, IMEF estimates that there will be a slowdown in investment in the mining sector which will have an impact on reducing state revenues, employment and development equity, as well as economic growth in the next few years," he said.
Singgih said the three-year RKAB was the right step. From the corporate side, investment and return can be calculated more measurably. This applies to mining companies and mining service companies. As for the government, it can optimize the management of national production in the context of export and domestic markets.
However, Singgih reminded the government that in determining national production, they should first consider the map of potential commodity markets, especially coal. Taking into account market parameters, production capacity, geological and mining conditions as well as environmental aspects, it forms the basis for awarding the RKAB.
"Integration of the various parameters that are currently managed by the central government will actually be more optimal in managing natural resources in maintaining the balance of the export market, DMO needs," he said.
Meanwhile, the Executive Director of the Indonesian Coal Mining Association (APBI) Hendra Sinadia said that his party had not officially proposed ratification of the RKAB every three years. APBI is waiting for the latest policy made by the Ministry of Energy and Mineral Resources. "We are waiting for further policies from the Government, including if later the RKAB is 3 years, whether proposed changes can be made every year or what it is," he said.
Image source: Istimewa