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Indonesia: Government Displays Inconsistency with Freeport, Expert Says
TEMPO.CO, Jakarta – A number of parties regretted the government’s decision to issue a special mining permit (IUPK) for PT Freeport Indonesia.
State Administrative Law Expert from Universitas Indonesia (UI) Dian Puji Simatupang, stated that the permit should only be issued if the government and Freeport reached an agreement on ending the company’s Contract of Work (CoW).
Dian said that from the legal perspective, issuing a permit is considered as an action taken by the government in its capacity as a public institution. Meanwhile, in the CoW, the government considered being on equal grounds with other private law subjects.
Dian argued that the government displayed inconsistency by issuing the license. “It’s like the government is half-public and half-private. Such action should have been avoided,” Dian said in a discussion in Jakarta on Thursday, April 6, 2017.
The Energy and Mineral Resources Ministry issued Freeport’s special mining license on February 10, 2017. Based on Government Regulation No. 1 of 2017 on Mineral and Coal Mining, as an IUPK holder, Freeport must comply with fiscal obligations, divest 51 percent of its shares, and have strong commitment to construct a smelter.
However, the company failed to comply with the government’s decision and insisted on maintaining its CoW. Both the government and Freeport has discussed the company’s willingness to change its status from February 2017. According to Secretary General of the Energy and Mineral Resources Ministry Mochammad Teguh Pamuji, Freeport has agreed to change its operational framework from CoW to IUPK.
Teguh stated that negotiations on Freeport obligations will begin on mid-April 2017. Teguh added that the negotiation will involve a number of stakeholders including the Finance Ministry, the Fiscal Policy Agency, the Interior Affairs Ministry, the Indonesia Investment Coordinating Board, and the Attorney General Office.
Director General of Mineral and Coal Bambang Gatot added that the negotiation will also involve the Papua Regional Government, along with residents living around the company’s work area.
Bambang explained that if the negotiation failed to result in an agreement, Freeport’s license will expire.
Source: https://en.tempo.co/read/news/2017/04/07/056863603/Government-Displays-Inconsistency-with-Freeport-Expert-Says