The rules for mass organizations managing mines are now complete (2024)

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The regulations covering religious organizations to manage mines are now complete. What are the rules?

JAKARTA, KOMPAS — President Joko Widodo has completed regulations covering community organizations to manage coal mines. After Government Regulation Number 25 of 2024, Presidential Regulation No. 76/2024 was issued.

Presidential Regulation (Perpres) No. 76/2024 regarding Amendments to Perpres No. 70/2023 concerning Land Allocation for Investment Arrangement was signed by President Joko Widodo on July 22, 2024, and immediately published on the same day. This regulation is accessible for download on the setneg.go.id website.

The presidential regulation includes articles 5A, 5B, and 5C added between articles 5 and 6. Article 5A states that priority offers for the ex PKP2B (coal mining business agreement) areas can be given to business entities owned by religious social organizations (ormas). The special mining business license area (WIUPK) is valid for five years.

As for Article 5B, it regulates the Investment Minister as the authorized party to determine, offer, and grant WIUPK to organizations' owned businesses. Article 5C stipulates that the majority of ownership in the organization's business must be held by the organization itself. The organization's shares cannot be transferred without the approval of the minister responsible for energy and mineral resources governance.

Also read: BKPM: PBNU Submits Application for Coal Mining Permit in East Kalimantan

This presidential regulation complements Government Regulation No. 25/2024 concerning Amendments to Government Regulation No. 96/2021 concerning the Implementation of Mineral and Coal Mining Business Activities. This new regulation adds Article 83A between the previous Articles 83 and 84. This addition emphasizes that WIUPK can be offered as a priority to organizational business entities.

As for Law Number 3 of 2020, it stipulates that the granting of IUPK is prioritized only for state-owned enterprises and regional-owned enterprises. This is because some of the revenue generated by state-owned enterprises/regional-owned enterprises will return to the country and be used for the benefit of the community. Private business entities, on the other hand, can obtain IUPK by participating in the WIUPK auction.

If priority is given to business entities owned by mass organizations, it can be questioned why, what the rationale is.

Law professor from Gadjah Mada University in Yogyakarta, Rikardo Simarmata, considers that the issuance of regulations that cover organizations that manage mining activities needs to be examined from two perspectives. The first and most important perspective is the political legal perspective.

"If we give opportunities to individuals or groups who are politically and economically vulnerable or have limited access, it can be seen as favoring those individuals or groups. However, is that a consideration in granting mining rights to organizations? It is to check their reasoning (whether their reasons align with policies). If it is not met, then the reason for the policy is politically practical or narrow political interests," he said.

Rikardo explained that so far, non-governmental organizations (NGOs) have not had any evidence in their efforts to manage mines. Even with Law No. 3/2020, NGOs can enter as mine managers without having to issue new regulations, namely by having a private business entity. However, these NGO-owned private business entities do not have priority in managing mines like state-owned enterprises and regional-owned enterprises.

Also read: Why Community Organizations' Rights to Manage Mines Reap Criticism

In Government Regulation No. 25/2024 and Presidential Regulation No. 76/2024, it is emphasized that organizations' business entities can also be prioritized as WIUPK managers. The problem, of course, lies in the arguments that justify the need for organizations to receive priority in managing WIUPK.

"If priority is given to organizations' business entities, it can be questioned why and what the rationale is. Does this organization represent a large group so that it gives priority to the organization and benefits a lot of people? Then, is the organization truly based on the masses or not, and does the organization periodically transparently convey its income and expenses to the public so that there is no suspicion that the organization is owned by only a few people," said Rikardo.

As an example, there was a policy in the past of granting 100-hectare forest management rights (HPH) to small-scale leaders at the regional level, which could be given to cooperatives.

In fact, according to Rikardo, the license is held by the cooperative, but it is the sugar kings who operate it. The same thing is feared to happen in the policy of granting Coal Mining Business Work Permit to social organizations.

So far, only Nahdlatul Ulama has applied for coal mining management rights. This religious organization will receive a share of the former coal mine of PT Kaltim Prima Coal owned by the Bakrie business group in East Kalimantan. However, other religious organizations are being cautious and tend to reject this offer.