Govt won't replace contract of work system

The government has no immediate plans to replace the current contract of work system in the mining industry with a business license system, according to secretary general of the Ministry of Mines and Energy Djoko Darmono.

Djoko admitted that some people had been suggesting to replace the contract of work (COW) system because of the various weaknesses of the system.

"But things which are not optimal (in the COW system) can still be fixed," Djoko was quoted by the Republika daily as saying on Friday.

He said that the COW system could also be fit into the new autonomy law, which provided the regional administration with more authority in managing economic affairs and resources.

He added that future COW contracts might no longer be signed by the central government, but the regional government because of the implementation of the new autonomy law.

Executive director of the Indonesian Mining Association PL Coutrier said earlier that the COW system would be replaced with the business license system following the implementation of the new autonomy law and the new fiscal balance law between the central and regional government. (*)