Indonesia’s Constitutional Court granted greater power to local administrations to designate areas for mining by amending some articles in the 2009 Mining Law, according to a ruling announced today, Jakarta Globe reported.
The court revised article 6 point 1 of the law to state that local administrations must consult with the parliament in deciding areas for mining, Chief Judge Mohammad Mahfud said in Jakarta. The article earlier dictated that mining areas be decided by the central government after coordination with local governments.
“To meet the democracy principles, local empowerment and regional autonomy, it is fair that the local government has the power” to decide mining areas, according to the ruling, obtained by Bloomberg News. The current regulation “is insufficient to protect the constitutional rights and the regional authority in determining policy on the natural resources in the region, especially for minerals and coal,” the ruling says.
The ruling is the second success by local governments in seeking bigger benefits from abundant coal, nickel and copper resources, after the Supreme Court annulled on Nov. 5 some articles in Energy and Mineral Resources Minister Decree No. 7, which is the supporting rule for the mining law, including article 21 that bans exports of mineral ores.
“It won’t affect existing miners if the ruling is not retroactive,” Leonardo Henry Gavaza, a Jakarta-based analyst at Bahana Securities, said by phone. The decision will potentially complicate the process of new permits, he said.
‘What We Want’
Today’s decision was based on a request from Isran Noor, regent of East Kutai in East Kalimantan province, a coal producing region. Indonesia is the world’s largest exporter of tin and thermal-coal and biggest producer of nickel ore.
“That is exactly what we want, because we’re the ones who know exactly resources in our region,” Noor told reporters at the court after the decision was read. “After this, we can resume issuing mining permits that were halted due to the judicial review.”
The Ministry of Energy and Mineral Resources will study the ruling, Susyanto, the ministry’s head of legal and public relations, said at the court. “We will study the verdicts and consult with other ministries including the Law and Human Rights Ministry,” he said.
The court also ruled that Mining Business Areas, or Wilayah Usaha Pertambangan, WUP, in Bahasa Indonesia, will be designated by local governments, and signed off by the central government, a reversal of the previous regulation.
WUP’s are mining areas in which sufficient geological data has been produced on potential reserves. The ruling applies to mineral and coal areas.