KPK’s intact supervision to help regulating mining sector

KPK’s intact supervision to help regulating mining sector

By Thomas R. Sembiring & Donald Haromunthe

Harsh criticism of the Corruption Eradication Comission (KPK) on the poor management of minerals and coal in Indonesia would likely to be continued. Performing its fourth of five main duties, (i.e to enhance any actions anticipating corruption), the national non-structural board then facilitate a meeting that invited the stakeholders in mining business to discuss related issues that prevent any potential loss of the goverment resulted from the illegal mining and export. In the meeting at KPK’s headquarter with 107 miners holding the so-called mining contract of works (KK’s) and coal mining contract of works (PKP2B’s) in Jakarta lately, various responses were coming from both the government and the mining companies sides.

Government speaks

The urgency of KPK’s supervision affirmed by Director General of Forestry Area Planning Ir. Muhammad Said as saying that there are some problems in mining areas that are potential to break the forestry law. “We pay serious attention on this mining sector thus making the KPK’s supervision is needed”, said Said. Furthermore he exposed some statistics that there had been about 1.3 million hectares of current mining concessions locating in conservation forest zone that by law should be forbidden. He also added that so far many of mining companies are not equipped with Taxpayer Registration Number (NPWP) meaning that this is a serious problem in terms of tax revenue. “Without NPWP, State revenue from tax are hard to afforded,” Said uttered emphasizing the importance to revise the regulation of mining areas based on the arranged baseline.

Inline with the above concern, Ministry of Energy and Mineral Resources warned miners in the country to settle their royalty and land reclamation fund arrears by end of October, or would be declared in default status that could lead to mining contract termination. Director General of Mineral and Coal R. Sukhyar said that option for the government to terminate the contract of miners failing to fulfill their financial obligations to the state is stipulated in both the KK and PKP2B contracts. Paul Lubis, Secretary of the Directorate General of Mineral and Coal previously said that the total coal royalty arrears for the period of 2006-2013 stood at Rp 1.5 trillion.

Talking about the government revenue from mineral and coal sector, Head of Indonesia Taxation Authority, Fuad Rahmany pacifically argue as saying that generally the KK and PKP2B licenses holders have been already registered. Thus, problematics in this sector arise relatively on the different interpretation upon the regulations.

“More serious matter are against the IUP (Mining License) holders”, said Fuad reasoning that until nowadays many of the IUP holders had obtained the license from the local goverment but they do not obey the regulation when running their mining activities. To figure it more clearly, Fuad admitted that some mining companies are out of tax screening, or even worse, no tax payment complied. This happened on illegal mining activities conducted by either having no NPWP or obscuring the concession sites, Fuad added without disclosing any statistics.

Companies listen

Bob Kamandanu, Chairman of Indonesia Coal Mining Association (ICMA) told Coal Asia that he welcomed the KPK’s supervision to eradicate illegal mining. Therefore, he insisted that KPK should be consistent in its good will and commitment to stop illegal mining. Bob hope that KPK will help fixing the tax rules among other issues to prevent any possibly rising image against government as creating unfair generalization. “Many miners are to take dilematic decision whether to prioritize employees’ salary payment or the royalty for government instead”, he added.

Bob also recited KPK’s notion to repair the weak governmental governance in mining sector. Calling the government analogically as parents, Bob voiced that miners’ aspiration need to listened back as well.

Many of undisclosed representations mining companies shared their appreciation and availability to cooperate in a drive to better consiousness on running mineral and coal mining business in terms of obedience on the regulation, attention to the enviromental concern and pro-people corporate governance.

Two-way communication

KPK holds firm in its duty to facilitate the meeting as part of promoting the mining firms to follow the existing law and regulations. No statement or decision on details of enhancing the illegal mining eradication are published by the KPK until the writing of this article.

“It is interesting and worth-noted that the private stakeholders that we invited feel that this meeting is a two-way communication” said Busyro Muqoddas, Deputy Chairman of KPK, responding to the press crowding and awaiting for next KPK’s action.


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