Executive Summary of Presidential Instruction Re Moratorium On The Granting Of New Licenses

INTRODUCTORY NOTES
This Summary & Analysis is intended as an overview only of Presidential Instruction No. 10 of 2011, dated 20 May 2011, re Moratorium on the Granting of New Licenses and the Improvement of Primary Natural Forest and Peat Lands Management (?Presidential Instruction 10/2011?).

This Summary & Analysis reflects our current understanding only of Presidential Instruction 10/2011 and is subject to change as that understanding develops and evolves.

Many of the points made in this Summary & Analysis are necessarily speculative in nature and subject to further clarification and confirmation. Accordingly, it would be prudent not to rely solely on this Summary & Analysis but, rather, to seek specific legal advice with respect to any issue concerning Presidential Instruction 10/2011 before making a material business decision regarding the same. CHRISTIAN TEO PURWONO & Partners would be pleased to assist you in this regard. Our contact details are set out below.
Address : CHRISTIAN TEO PURWONO & Partners
The Indonesia Stock Exchange Building
Tower II Floor 14 Suite 1405
Sudirman Central Business District
Jakarta 12190 INDONESIA
Telephone : [62-21] 515 0280
Facsimile : [62-21] 515 0281

Please contact, in the first instance, Mr. Bill Sullivan, Licensed Foreign Advocate (email: bsullivan@cteolaw.com and mobile: [62-21] 81585060978) or Ms. Nurvita Kristianty Siregar, Senior Associate (email: nksiregar@cteolaw.com and mobile [62-21] 818482777).

EXECUTIVE SUMMARY
1. For the purpose of reducing Greenhouse Gas Emissions, the President has instructed various authorities to take all necessary action to support a moratorium on the issuance of new licenses for the utilization of Primary Natural Forests and Peat Lands except in the case of:
(i) applications that have already received an Approval in Principle License from MoFor;
(ii) the implementation of vital national development, such as geothermal, oil and gas, electricity, rice and sugar cane fields;
(iii) extension of existing Forest Utilization Business Licenses and/or Forest Area Utilization Permits (i.e., Rent Use Permits) provided that the relevant business licenses (e.g., IUPs/CCoWs/CoWs) are still valid; and
(iv) Ecosystem restoration.

2. ?Primary Natural Forest? is a term which is commonly understood as referring to natural forest areas which have never been the subject of any logging activities. However, there is no legal definition of ?Primary Natural Forest?. Accordingly, the determination of whether or not a Forest Area is Primary Natural Forest is to be made by having regard to the Indicative Map attached to Presidential Instruction 10/2011.

3. The Indicative Map is to be revised and updated every 6 months.

4. The Indicative Map is not at all clear.

5. It is tolerably clear, however, that all types of Production Forest, as well as Areas for Other Purposes, may include areas of Primary Natural Forest. Accordingly, President Instruction 10/2011 will prevent the issuance of Rent Use Permits for mining activities in that part, if any, of Production Forests and Areas for Other Purposes which comprise Primary Natural Forest or Peat Lands.

6. The moratorium is for 2 years from 20 May 2011. (ends)

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