Jokowi criticizes Jonan over regulations discouraging investment
Tuesday, July 25 2017 - 02:44 AM WIB
Petromindo|Dasir
President Joko Widodo (Jokowi) reprimanded Minister of Energy and Mineral Resources Ignasius Jonan, and Minister of Forestry and Environmental Affairs Siti Nurbaya over new ministerial regulations which have discouraged badly needed investment.
Jokowi made the criticism on Monday at a cabinet meeting. ?In the new ministerial regulations, both in the forestry and environment, (and) in the energy and mineral resources sectors, for example, I noticed that in the (past) one to two months, the response of investors were not good because (the regulations) are considered hampering investment,? Jokowi said as quoted by kompas.com.
The president reminded ministers to be careful when issuing regulations so as not to discourage investment, crucial to help accelerate economic growth. He said that ministers must discuss any new regulations with various stakeholders first.
Minister Jonan has been under criticism from players in the energy and mining sectors following the introduction of new ministerial regulations. In the oil and gas sector, a new regulation to apply gross split scheme in new oil and gas contracts has been criticized by industry players.
In the mining sector, smelter companies have protested regulation that allows the export low grade nickel ores and washed bauxite. In the power sector, a ministerial regulation limiting the electricity tariff from renewable-based power plants at 85 percent of the electricity supply cost (or BPP) of PLN has also been protested by industry players saying that it would undermine investment in the country?s renewables sector.
Recently, Minster Jonan issued a new ministerial regulation that requires companies engaged in energy and mining sectors to obtain minister approval in changes in the companies? board of directors and share ownership.
Deputy Minister of Energy and Mineral Resource Arcandra Tahar said on Tuesday that the ministry will reevaluate regulations that are seen to hamper new investment. ?There are 42-43 ministerial regulations that we will reevaluate,? he said. (*)