Indonesia issues new guidelines for obtaining forest land-use permit

Indonesia has issued a new forestry guideline which is expected to simplify and give a clear time frame needed to obtain an essential forest-land use permit, allowing miners to speed up the development of mining resources, said a senior official at the forestry ministry.

Regulatory issues, including lengthy process to obtain necessary permits for mining exploration and production, have slowed mine expansion to increase supply and hampered explorations for building up reserve in Indonesia.

Indonesia is the world?s top thermal coal exporter but it only have 20 billion tonnes of mineable coal reserves or roughly a third of Australia?s coal reserve at above 70 billion tones which could risk long-term production outlook to meet both overseas and domestic demand.

Under the new regulation, miners will now apply directly to the forestry minister who will then review and decide within 20 working days whether to accept or reject an application for the forest land-use permit, said Bambang Soepijanto, Director General of Forestry Planning at the Forestry Ministry in an interview ahead of Coaltrans Asia Conference in Bali this week.

?If miners had submitted all the required documents and their application was accepted, the minister would issue a principal permit within 125 working days,? said Bambang.

?It is a breakthrough to specify the exact time needed to process the permit,? he added.

Energy and mining companies need to obtain the forest-land use permit from the forestry ministry before they start exploration and production in forest areas.

Other businesses that need to obtain the permit include oil and gas activity, geothermal, telecommunication, power plants and infrastructure projects such as roads and highways for public transportation and shipments of production output.

After receiving the principal permit, miners will need to wait for another 90 days before they receive the actual permit, said Hudoyo, the Director of Forest land-use permit at the Forestry Ministry.

?Miners will still need to fulfill some requirements before they get the actual permit including deciding the forest border. It will take 215 working days in total to process and issue the permit,? he said.

Based on the new regulation, miners now only submit application for the forest land-use permit to the forestry minister and do not have to send copies of their application to several officials in the ministry, Hudoyo added, a move that will help cut red tapes.

Miners have complained of lengthy process and bureaucracy to obtain the forest-land use permit because of unclear time frame to issue the permit.

?The regulation is intended to remove much of the uncertainty and reduce much of the delay which is presently associated with obtaining the permit,? said Bill Sullivan, licensed foreign advocate at Christian Teo Purwono & Partners, in his paper.

?However, whether or not these objectives are realized depends very much on how the regulation is implemented in practice,? said Sullivan.

The complicated process of obtaining the forest land-use permit have made investors cautious when acquiring mines in Indonesia.

Some miners preferred to acquire only a mine that has a valid forest land-use permit to avoid lengthy process to obtain the permit.

?One of the most important business conditions for us would be not to have to go through permit procedures with the forestry authorities," Dharma Djojonegoro, the firm?s chief executive officer of PT Ancora Indonesia Resources (AIR) told CoalAsia.

"Dealing with the forestry authorities can be really complicated. The mines we would acquire would already have the required permits, especially those from the Ministry of Forestry,? said Dharma.

STRICTER REFORESTATION RULE
While simplifying process to obtain permit, miners will be subject to a tighter replanting requirement under the new regulation, including a requirement to complete reforestation in their mining concession when their license revoke by the goverment.

Mining firms must carry out reforestation in the areas inside and outside of its concession at the same size of the area used for their activity, said Bambang.

?If a company has a permit to exploit a 1,000-hectare part of the forest, it is responsible to rehabilitate the 1,000-hectare area inside its concession and another 1,000 hectares outside its concession,? he said.

Miners will still have to fulfill its reforestation obligations even though its forest land-use permit has been revoked.

?For a long time, we have only known that mining causes severe environmental damages. Now we have turned it around,? he said. (Fitri)