Local administrations cannot impose mining levies as they like
Friday, March 9 2001 - 04:30 AM WIB
Local administrations must be careful in pursuing more income from mining sector, and therefore they must abide by Government Regulation (PP) No. 25 on regional autonomy whenever they want to introduce new levies, an official said in Yogyakarta on Thursday.
The director general of geology and mineral resources at the Ministry of Energy and Mineral Resources, Wimpie S. Tjetjep, said that many local administrations did not realize that many rulings that they had produced were not in conformation with PP No. 25.
He noted that article 8 of PP No. 25 clearly stipulates that all contracts signed by the central government and mining investors before the implementation of regional autonomy are valid until they expire, and therefore, local administrations cannot just demand more retribution from them.
And this has raised concerns among investors, especially foreign mining investors, who fear that local administrations would blindly slap more levies to mining companies in line with their increased autonomy.
"Regulations produced by local administrations on mining sector, especially those aimed to collect retribution have raised concerns among investors. They become nervous and reluctant about investing in Indonesia," he said at a symposium on geothermal energy held at the Gadjah Mada University, Yogyakarta, Thursday.
Wimpie warned that if local administrations did not take care of foreign investors concerns, those investors would likely relocate their investment from Indonesia to overseas markets.
Wimpie, who used to serve as an expert staff on natural resources at the now defunct office of the state minister of regional autonomy, said that local administrations should just follow all regulations on regional autonomy issued by the Ministry of Home Affairs and Regional Autonomy.
"Regulations and policies we made on regional autonomy are all very clear and complete. Local administrations should just implement them," he said.
To give more legal certainty, Wimpie said his office was currently drafting a mining bill to replace the existing outdate mining law. "The draft is already there, but it needs some revisions." (*)