The authority to issue mining permits will be returned to central government

The authority to issue contracts of works or mining permits which is now held by provincial administration will be returned back to the central government, according to the chairman of the Commission VIII of the House of Representatives, Irwan Prayitno.

"The new procedure in the issuance of contracts of works will be contained in a new mining law whose draft has been submitted at the State Secretary for the President?s approval," Irwan said as reported by Bisnis Indonesia on Friday

He said that the licensing policy would be changed because investors, particularly foreign mining companies, were still reluctant to deal with the provincial administration. He, however, said that the provincial administration would be still involved in the issuance of contracts of works despite the change.

The government, as part of the empowerment of the provincial administration, has delegated the rights to issue mining permits to the provincial authorities. But investors, particularly foreign investors still prefer to deal with the central government in obtaining the contracts of works.

The new mining law will also contain important guidelines to both central government and the provincial administrations in managing and supervising the country?s mining sector to prevent overlapping, Irwan said. He underlines that the new mining law would have nothing to do with controversies related to the operation of mining companies in the protected forests.

According to him, all activities related to forest conservation will be still regulated by Forestry Law. It means that mining companies are still prohibited to carry out open-pit mining operations in protected forests. (*)