Regulation: Presidential Regulation on Underground Mining

PRESIDENTIAL REGULATION
NUMBER 28 YEAR 2011
REGARDING
THE UTILIZATION OF PROTECTED FOREST AREA FOR UNDERGROUND MINING
BY GRACE OF GOD THE ALMIGHTY
THE PRESIDENT OF THE REPUBLIC OF INDONESIA

Considering: that in order to implement the provision of Article 5 paragraph (2) of Government Regulation Number 24 Year 2010 regarding the Utilization of Forest Area, it is necessary to stipulate a presidential regulation regarding the Utilization of Forest Area for Underground Mining;

In view of
1. Article 4 paragraph (1) of the Constitution of 1945;
2. Law Number 41 Year 1999 regarding Forestry (Statute Book of the Republic of Indonesia Year 1999 Number 167, Supplement to Statute Book of the Republic of Indonesia Number 3888) as already amended by Law Number 19 Year 2004 concerning Stipulation of Government Regulation In Lieu of Law Number 1 Year 2004 regarding the Amendment to Law Number 41 Year 1999 regarding Forestry to Become A Law (Statute Book of the Republic of Indonesia Year 2004 Number 86, Supplement to Statute Book of the Republic of Indonesia Number 4412);
3. Government Regulation Number 24 Year 2010 regarding the Utilization of Forest Area (Statute Book of the Republic of Indonesia Year 2010 Number 30, Supplement to Statute Book of the Republic of Indonesia Number 5112);

DECIDES:
To stipulate: THE PRESIDENTIAL REGULATION REGARDING THE UTILIZATION OF PROTECTED FOREST AREA FOR UNDERGROUND MINING.

CHAPTER I
GENERAL PROVISION

Article 1
Referred to in this presidential regulation as:
1. Protected Forest shall be a forest area performing the main function to protect life buffer system in a bid to regulate water resource management, prevent flooding, control erosion, prevent sea-water intrusion and preserve soil fertility.
2. Underground Mining in Protected Forest shall be a mining activity executed underground (not contact directly with external air) by means of building first passageway in the form of shaft or tunnel or addle, including facilities and infrastructure supporting production activity in the protected forest.
3. Forest Protection shall be an effort to prevent and restrict forest destruction, forest area and forest products, attributed to human activity, animal, fire, natural forces, pest and disease as well as maintain and preserve rights of the state, communities and individuals to forest, forest area, forest products, investment as well as apparatuses related to forest management.
4. Reclamation of Ex-Underground Mining Area shall be an effort to restore the main function of protected forest, which is affected by underground mining.
5. Environmental Impact Analysis hereinafter called AMDAL shall be a study on major and substantial impacts of a planned business and/or activity on the environment, which is needed for making decision on the implementation of the business and/or activity.
6. Non-Tax State Revenue from the Utilization of Forest Area hereinafter called PNBP from the Utilization of Forest Area shall be non-tax state revenue resulting from the use of forest area for non-forestry development purposes, which is effective within the Ministry of Forestry as a substitute to compensation land in accordance with the provision of legislation.
7. Minister shall be the minister in charge of forestry affairs.
8. REDD+ (Reducing Emission from Deforestation and Forest Degradation) Institution shall be an institution established by the president to coordinate the planning, implementation and monitoring of REDD+.

Article 2
(1) Mining activity may be executed inside protected forest area by underground mining method.
(2) The utilization of protected forest area for underground mining activity shall be executed without changing the allocation and main function of the protected forest area.

Article 3
(1) The utilization of protected forest area for underground mining activity shall secure license from the Minister.

(2) The license as referred to in paragraph (1) shall be issued through 2 (two) phases, namely:
a. principal approval; and
b. license to leasehold protected forest area.

CHAPTER II
APPLICATION AND LICENSING PROCEDURE

Article 4
Application for the license to use protected forest area for underground mining activity as referred to in Article 3 may only be submitted by executives of companies in the form of Indonesia legal entity already having license or agreement in the mining sector.

Article 5
(1) The application for license to use protected forest area as referred to in Article 4 shall be submitted in writing by applicants to the Minister with a copy made available to:
a. the minister in charge of energy and mineral resource affairs;
b. the minister in charge of environmental affairs;
c. local governor; and
d. local regent/mayor.

(2) The application for the license as referred to in paragraph (1) shall be furnished with the following requirements:
a. feasibility of business in the mining sector, which is certified in feasibility study on the basis of result of exploration already adjusted to the function of the protected forest, legalized by governor or regent/mayor by virtue of their authority, after securing technical consideration from the Minister in charge of energy and mineral resource affairs;
b. decision on environmental feasibility on the basis of result of evaluation of AMDAL adjusted to the main function of the protected forest, which is issued by the minister in charge of environmental affairs;
c. recommendation from local regent/mayor and governor, based on technical consideration from the institution in charge of forestry affairs;
d. technical consideration from state-owned enterprise (BUMN) assigned and authorized to organize activities of forest management, if the requested area constitutes working area of the said BUMN;
e. plan for using the protected forest area and work plan enclosed by site map and size of the requested protected forest-area as well as the latest satellite image with the minimum resolution 15 m;
f. license or agreement in the mining sector; and
g. statement of readiness before notary to fulfill the whole obligations and bear the whole cost related to leasehold application.

Article 6
(1) The Minister shall assess technically the application for license as referred to in Article 5.
(2) In the case of the application for license as referred to in Article 5 being rejected, the Minister shall issue a letter of rejection to the application.
(3) In the case of the application for license as referred to in Article 5 being approved, the Minister shall issue principal approval of the leasehold of protected forest area, which contains obligations that the applications shall fulfill.
(4) The principal approval shall be granted for a maximum period of 2 (two) years as from the date of stipulation of the principal approval and may be extended on the basis of result of evaluation by the Minister.
(5) The obligations of applicant already securing the principal approval as referred to in paragraph (3) shall include:
a. providing and granting compensation land with the minimum ratio 1 : 2, in the case of the applicant securing the principal approval of the leasehold of protected forest area with compensation of land for the leasehold of forest area in a province where the size of forest area is below 30% (thirty percent) of the size of riverbed area and/or island;
b. making statement of readiness to pay PNBP from the Utilization of Forest Area and statement of readiness to conduct planting in the framework of rehabilitating riverbed area with the minimum ratio 1 : 1, in the case of the applicant securing principal approval of the leasehold of protected forest in a province where the size of forest is above 30 % (thirty percent) of the size of riverbed area and/or island;
c. bearing the costs of measuring, mapping, installing of boundary mark, inventorying of uprights and compensation for the value of uprights of the borrowed protected forest-area;
d. paying forest royalty (PSDH) and reforestation funds (DR) in accordance with the provision of legislation;
e. paying compensation for the costs of investment in forest management as a result of the utilization of forest area in accordance with the size of area and the leasehold period of the forest area; and
f. making statement of readiness before notary to reclaim and reforest the protected forest area already used, protect forest, prevent forest destruction, erosion, landslide, forest fire, facilitate forestry apparatuses to conduct monitoring and evaluation, bear the validation cost of compensation land and reforest the compensation land.

Article 7
(1) In the case of the applicant already fulfilling the whole obligations in the principal approval as referred to in Article 6 paragraph (5), the Minister shall issue license to leasehold the protected forest area.
(2) The license to leasehold the protected forest area as referred to in paragraph (1) shall be granted for 20 (twenty) years at the maximum, in accordance with feasibility study and may be extended in accordance with the validity period of license or agreement in the mining sector.
(3) The extension of the license to leasehold the protected forest area shall be based on result of evaluation by the Monitoring and Evaluation Team as referred to in 12.

CHAPTER III
RIGHT AND OBLIGATION

Article 8
Holders of the license to leasehold protected forest area shall reserve a right to:
a. occupy and manage as well as undertake activities related to underground mining inside the protected forest area; and
b. utilize results of the executed activities in relations to the implementation of underground mining activity as well as build supporting facilities and infrastructure in the protected forest area.

Article 9
Holders of the license to leasehold the protected forest area shall be obliged to:
a. manage and monitor the environment in accordance with documents of Environmental Management Plan (RKL) and Environmental Monitoring Plan (RPL);
b. undertake underground mining activity in accordance with the planning in document of feasibility study;
c. conduct reclamation and/or reforestation in accordance with the provision in force;
d. protect forest in the borrowed protected forest area;
e. pay PNBM from the Utilization of Forest Area and conduct the planting in the framework of rehabilitating riverbed area by license holders in provinces where the size of forest area is above 30 % (thirty percent) of the size of riverbed area and/or island in accordance with the provision in force;
f. bear the validation cost of compensation land and reforest the compensation land by license holders in provinces where the size of forest area is below 30 % (thirty percent) of the size of riverbed area and/or island in accordance with the provision in force; and
g. report the implementation of activity periodically to:
- the Minister;
- the Minister in charge of energy and mineral resource affairs; and
- the Minister in charge of environmental affairs with a copy made available to local governor and/or regent/mayor.

Article 10
Holders of license to leasehold the protected forest area shall be prohibited from undertaking underground mining activities causing:
a. land surface to subside; or
b. the main function of the protected forest to change permanently.

Article 11
The license to leasehold the protected forest area may be transferred to other party after securing written approval from the Minister.

CHAPTER IV
MONITORING AND EVALUATION

Article 12
(1) The Minister shall establish a team to monitor and evaluate the utilization of the protected forest area.
(2) Members of the Monitoring and Evaluation Team as referred to in paragraph (1) shall consist of representatives of the Ministry of Forestry, Ministry of Energy and Mineral Resources, Ministry of Home Affairs, Ministry of Environmental Affairs, REDD+ Institution, related experts and related apparatuses in provincial and regency/municipal governments.

CHAPTER V
EXPIRATION OF LICENSE AND RETURNING OF PROTECTED FOREST AREA

Article 13
(1) License to leasehold the protected forest area shall expire in the case of:
a. the validity period expiring;
b. the license being returned by the license holder before the validity period expires; or
c. the license being revoked by the Minister.

(2) The expiration of the license to leasehold the protected forest area as referred to in paragraph (1) shall not discharge the obligation of the license holder to settle the whole obligations not yet fulfilled as referred to in Article 9.

Article 14
The returning of the protected forest area for underground mining as referred to in Article 13 paragraph (1) letter a or letter b shall be accepted by the Minister after the obligation to conduct reclamation and/or reforestation as referred to in Article 9 letter is fulfilled.

Article 15
The license to leasehold the protected forest area shall be revoked by the Minister in the case of the license holder:
a. failing to meet any of the obligations as referred to in Article 9 letter a, letter b, letter c, letter d or letter e; or
b. violating the provision of Article 10 or Article 11

Article 16
The Minister shall stipulate further provision on the utilization of protected forest area for underground mining by a ministerial regulation after coordinating with the ministers in charge of environmental and mining affairs.

CHAPTER VI
TRANSITIONAL PROVISION

Article 17
(1) Feasibility study on underground mining of holders of license or agreement in the mining sector already legalized but not yet securing license to leasehold the protected forest area before this presidential regulation is stipulated shall be declared to remain effective.
(2) AMDAL of holders of license or agreement in the mining sector, which remains effective but has not secured license to leasehold the protected forest area when this presidential regulation is stipulated, shall be corrected towards Environmental Management Plan (RKL) and Environmental Monitoring Plan (RPL) especially for issues related to the main function of the protected forest.
(3) In the case of AMDAL of holders of license or agreement in the mining sector being in the course of evaluation by Regional AMDAL Evaluation Commission upon the stipulation of this presidential regulation, the Regional AMDAL Evaluation Commission shall pass on the whole process of evaluation to the Central AMDAL Evaluation Commission in accordance with the provision of legislation.

Article 18
As long as the REDD+ Institution as referred to in Article 12 paragraph (2) has not been established, the role of the institution shall be executed by a Task Force Preparing the Establishment of REDD+ Institution, which is set up on the basis of Presidential Decree Number 19 Year 2010 regarding the Task Force Preparing the Establishment of REDD+ Institution.

CHAPTER VII
CONCLUSION

Article 19
The presidential regulation shall come into force as from the date of stipulation.

Stipulated in Jakarta
On May 19, 2011
THE PRESIDENT OF THE REPUBLIC OF INDONESIA
sgd
DR. H. SUSILO BAMBANG YUDHOYONO

This copy complies with the original one
THE CABINET SECRETARIAT OF THE REPUBLIC OF INDONESIA
Deputy for Economic Affairs
sgd
Retno Pudji Budi Astuti