Indonesia: Omnibus Law - Impacts on Mining Sector

The provided information outlines concerns and criticisms related to two articles in the Mining Sector Job Creation Law in Indonesia, specifically Article 128A and Article 162. The main points of contention include the 0 percent royalty incentive for mining companies engaged in downstream activities and the perceived increase in criminalization of individuals opposing mining business activities.

Article 128A introduces an incentive system, allowing for a 0 percent royalty for coal mining companies involved in downstream operations. Critics argue that this provision benefits coal miners by significantly reducing government income, particularly for regional governments that rely on royalties as part of their revenue.

The article highlights the potential losses for local governments, citing examples of West Kalimantan, South Kalimantan, Papua, and South Sumatra, which receive substantial income from royalties. The concern is that if the 0 percent royalty incentive is implemented, local governments may face a drastic reduction in income from coal mining activities.

Additionally, changes to Article 162 emphasize the criminalization of individuals obstructing or disrupting mining business activities. The revised penalty includes a maximum imprisonment of one year or a fine of up to IDR 100,000,000.

Critics argue that these provisions, coupled with other changes in the mining sector, may have negative consequences, such as the mining of radioactive and nuclear materials and the potential for geothermal mining without clear restrictions. The overall sentiment is that the Job Creation Law, by amending various existing laws, may lead to unfavorable outcomes for local communities and the environment.

These concerns have sparked protests and opposition from various groups, including trade unions, students, and community organizations. The complexity of the legislative process, particularly the formation of government regulations (PP) related to the law, is also highlighted as a challenge in obtaining information and ensuring transparency.

It's important to note that the information provided reflects the perspectives and concerns raised by critics of the Mining Sector Job Creation Law in Indonesia.

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Source : hukumonline.com