The session on Mining Policy paper series was moderated by Ratih Amri, SVP Corporate Secretary, MIND ID. Rizal Kasli, the Chairman of Perhapi, opened the panel in the first session with his presentation on Mining Policy paper series. The key findings of each theme are below.
Theme 1: Boosting Exploration Investment in the Indonesian Mining Sector. Problems identified include declining exploration investment and reserves discovery, fewer greenfield exploration and underdeveloped junior mining companies. The Paper informs the importance to improve divestment obligation policy, resolve land and management issues, strengthen preliminary investigation, encourage participation of junior mining companies, and develop financing strategy and national geological database.
Theme 2: Improving Management of Artisanal and Small-scale Mining (ASM). The subsector faces serious challenges with regards to Occupational Health and Safety (OHS) and environmental risks, social conflict, pragmatic attitude of miners, mineral conservation issue and loss of state revenue. Recommendations to improve the management and governance in ASM include advocacy for formalization, provision of centralized and integrated processing facilities, establishment of Large-Scale Mining- ASM partnership, provision of technical assistance and policy reinforcement regarding illegal practices.
Theme 3: Social and Environmental Transparency. Current issues within this area are lack of legal implications to support public involvement for the Environmental Impact Analysis (EIA) process, information asymmetry on social and environmental performance, and lack of information disclosure regarding contract and licensing to the public. The Paper highlights the need to conduct inclusive public consultation during licensing process with the presence of relevant government officials, develop progressive legal framework, strengthen policies to regulate procedures and cost determination, and create a public platform for transparency of the Environmental Restoration Guarantee Fund.
Theme 4: Mine Inspection Performance. The Paper identifies four problems regarding mining supervision, namely limited number of mining supervisors, lack of synergy between management plans and supervision, complicated bureaucracy system, and low level of public participation. Recommendations include establishing an integrated service and supervision office both at national and local levels, supervising the Beneficial Ownership during Mining Business License ownership transfers, accelerating the integration of the single-ID database mining production monitoring system and implementing standardized procedures for complaint mechanism.
Theme 5: Land Conflicts and Cadastral Licensing Issues in Mining. The key issue in this area revolves around land conflict in mining sector due to the absence of standardized land administration and mining cadaster institution. Thus, it is important to strengthen the existing cadaster system and developing an integrated computerized mining cadaster system.
Theme 6: Mineral Downstream Industry Development. The problems that are found are the lack of optimization with regards to the implementation of mineral downstreaming policy, policy dualism and high financing. Thus, it is recommended for the government to accelerate the formulation of the National Mineral and Coal Management Grand Strategy and the strengthening and better coordination with the Industry side as the driving sector for mineral production; provide incentives for integrated smelters; establish National Strategic Project Monitoring; and strengthen synergy between Ministry of Energy and Mineral Resources and the Ministry of Industry through stronger policy frameworks.
Four commentators then provided their feedbacks to the paper series. Prof. Irwandy Arif, M.Sc., Special Staff for Mineral and Coal Acceleration Governance, Ministry of Energy and Mineral Resources, highlighted the paper series’ coverage on crucial issues that were also previously discussed in the Indonesian Mining Policy Document, which were Mineral and Coal Inventory, Mineral and Coal Management and Utilization, Mineral and Coal Conservation and Monitoring and Evaluation.
Dr. Raden Sukhyar, Independent Mining Consultant, welcomed the good work presented in the paper. He also emphasized the need to clearly define the position of this Mining Policy paper series vis-a-vis the current mining law.
Maryati Abdullah, (then) Senior Advisor at Publish What You Pay Indonesia, underlined the need for mining operations to comply with two guidelines, which are Sustainable Development Goals and Environment and Social and Governance Standards; and engage citizens in transparency efforts.
Balada Amor, Senior Mining Specialist at 欧美日b大片, highlighted three areas that are relevant to the Bank’s engagement in Indonesia and can further generate partnerships among stakeholders, namely promoting gender equality, data mainstreaming through Extractives Industry Transparency Initiative (EITI) and Energy Transition within the context of a Just Transition for All.
The second part of the Webinar “Mining Policy and Building Local Economic Diversification” discussed local economic diversification initiatives that had been implemented by Indonesian mining companies and the ELLED framework. This session was moderated by Balada Amor, Senior Mining Specialist at 欧美日b大片.
Rizal Kasli, the Chairman of Perhapi, shared the association’s study on the existing initiatives by Indonesian mining companies in rehabilitating former mining pits to generate economic diversification at local level, such as by turning it into geoparks and supplying water for fire brigade. Among the initiatives, one is being developed in Kutai Kartanegara District, which increases the significance of the project, considering the new capital city will be located in the same province.
Kelvin Tan then discussed the study findings within the context of ELLED framework. The potential contribution of the mining sector to the development of the new capital city was highlighted as such development would entail various demands that could be supported by the mining sector. This goes beyond extractives, as mentioned previously in the presentation that former mining pits could be used for various functions. Further, mining business locations in some cases can be developed into a Special Economic Zone (SEZ). Coupled with the country’s plan towards a new capital city, this SEZ was seen as being able to provide more opportunities for the locals in the area.
Towards the end of the session, Balada Amor shared her hope that this discussion on local economic diversification could provide more insights on how the works under Natural Resources for Development Program generated broader and stronger local benefit sharing and proliferates economic diversification at sub-national level.