Mining Law & Regulatory Practice in Indonesia

The first and only English–language reference to the laws and regulations of the booming Indonesian mining sector As the growing Indonesian mining industry attracts new investment from foreign mining companies, those companies are faced with the daunting challenge of unraveling the hugely confusing and complex plethora of local laws and regulations that govern the industry. Until now, there has been no comprehensive English–language guide to Indonesia′s mining laws that western companies could turn to for reliable guidance and advice. This detailed reference fills that gap for the mining companies, advisors, and consultants who must navigate this confusing and growing web of regulation on a daily basis. The only English–language reference on the subject of Indonesian mining law A valuable guide for anyone in the mining industry currently doing business or intending to do business in Indonesia Written by a highly regarded legal expert with deep experience in the Indonesian mining industry Combines all the relevant regulations in one comprehensive guide Ideal for professionals in the mining industry, as well as academics, government institutions, policy makers, and industry associations, Mining Law &, Regulatory Practice in Indonesia is the perfect guide for an underserved market.

Foreword xi Preface xiii Acknowledgments xvii CHAPTER 1 Overview of Mining Regime 1 I Prevailing Laws and Regulations 1 II Former Mining Regime 3 III CoWs/CCoWs 3 IV Regional Autonomy 5 V Mining Activities 6 VI Mining Areas 6 VII Mining Licenses 7 VIII Procedures for Obtaining WIUPs and IUPs 11 IX Rights and Obligations of IUP Holders 12 X Domestic Market Obligation 15 XI Divestiture of Shares Requirement 16 XII Procedures for Minerals and Coal Benchmark Price Determination 17 XIII Domestic Processing and Refining 19 XIV Direction and Supervision of the Management and Implementation of Mining Business 22 XV Transitional Provisions for Existing KPs, CoWs, and CCoWs 23 XVI Mining Services 24 CHAPTER 2 2009 Mining Law 25 I Executive Summary 25 II Details of Main Provisions 26 CHAPTER 3 Mining Area Determination 43 I Executive Summary 43 II Details of Main Provisions 44 CHAPTER 4 Mining Services Regulation 53 I Executive Summary 53 II Details of Main Provisions 55 CHAPTER 5 Affiliated Mining Services Provider Regulation 65 I Executive Summary 65 II Details of Main Provisions 67 CHAPTER 6 Prioritization of Domestic Interest Regulation 71 I Executive Summary 71 II Details of Main Provisions 72 CHAPTER 7 Domestic Coal Supply Decree 2013 79 I Executive Summary 79 II Details of Main Provisions 79 CHAPTER 8 Coal and Mineral Mining Enterprise Activities Regulation 83 I Executive Summary 83 II Details of Main Provisions 85 CHAPTER 9 Mining Direction and Supervision Regulation 107 I Executive Summary 107 II Details of Main Provisions 108 CHAPTER 10 Benchmark Price Determination Regulation 117 I Executive Summary 117 II Details of Main Provisions 119 Appendix 1: Coal Adjustment Cost for HPB RE Sales of Coal by Way of FOB Barge 131 Appendix 2: Cost Adjustment for HPB RE Sales of Coal in One Island to the End User 132 CHAPTER 11 Benchmark Price Formulae Regulation 135 I Executive Summary 135 II Details of Main Provisions 136 Appendix 1: Formula for Steaming Coal Benchmark Price 139 Appendix 2: Coal Benchmark Price Reference Formula for Steaming Coal Based on Brand Name 142 Appendix 3: Formula for Coking Coal Benchmark Price 145 CHAPTER 12 Reclamation and Post–Mining Activities Regulation 147 I Executive Summary 147 II Details of Main Provisions 149 CHAPTER 13 CoW and CCoW Change of Investment Regulation 159 I Executive Summary 159 II Details of Main Provisions 160 CHAPTER 14 Extractive Industry Income Transparency Regulation 167 I Executive Summary 167 II Details of Main Provisions 168 CHAPTER 15 Increase of Added Value of Minerals through Processing and Refining of Minerals Regulation 173 I Executive Summary 173 II Details of Main Provisions 177 Appendix 1: Minimum Processing and Refining Specifications for Metal Mineral Products 188 Appendix 2: Minimum Processing and Refining Specifications for Nonmetal Mineral Products 191 Appendix 3: Minimum Processing and Refining Specifications for Rock Mineral Products 192 CHAPTER 16 Regulation Amending Mineral and Coal Mining Enterprise Activities Regulation 193 I Executive Summary 193 II Details of Main Provisions 195 CHAPTER 17 Mineral Products Export Requirements Regulation 201 I Executive Summary 201 II Details of Main Provisions 202 Appendix 1: Certain Mineral Products Subject to MOTR 29/2012 210 CHAPTER 18 Export Tax Regulation 213 I Executive Summary 213 II Details of Main Provisions 214 III Attachment IV of MoFR 75/2012: Certain Mineral Products Subject to Export Tax 216 CHAPTER 19 Regulation Amending Mining Services Regulation 219 I Executive Summary 219 II Details of Main Provisions 221 Appendix 1A: Types, Sectors, and Subsectors of Mining Services Business Activities 229 Appendix 1B: Types of Non–Core Mining Services Business Activities 232 CHAPTER 20 Acceleration of Domestic Processing and Refining Instruction 233 I Executive Summary 233 II Details of Main Provisions 235 CHAPTER 21 Draft Procedures for Issuing Special Production IUPs for Processing and Refining and Transportation and Sales Regulation 239 I Executive Summary 239 II Details of Main Provisions 241 CHAPTER 22 Draft Guidelines for Licensing of Metal Mineral and Coal Business Activities Regulation 267 I Executive Summary 267 II Details of Main Provisions 269 CHAPTER 23 Draft Guidelines for Licensing of Nonmetal Mineral and Rock Mining Business Activities Regulation 323 I Executive Summary 323 II Details of Main Provisions 325 CHAPTER 24 Draft Mining Business Employees, Goods, and Services Procurement Regulation 347 I Executive Summary 347 II Details of Main Provisions 349 CHAPTER 25 Draft Community Development and Empowerment Regulation 363 I Executive Summary 363 II Details of Main Provisions 365 CHAPTER 26 Draft Coal Value Added Regulation 373 I Executive Summary 373 II Details of Main Provisions 375 Appendix 1: Minimum Calorific Requirement 381 CHAPTER 27 Overview of the Forestry Regime 383 I Relevant Laws and Regulations 383 II Categorization of Forest Areas in Indonesia 384 III The Key Definitions for Forest Areas 385 IV Key Licenses for Forest Activities 386 V Carrying on Mining Activities in a Forest Area 386 VI General Description of Rent Use Permits 387 VII Steps Involved in Obtaining a Rent Use Permit and Related Licenses 388 CHAPTER 28 Forest Area Function and Purpose Regulation 405 I Executive Summary 405 II Details of Main Provisions 407 CHAPTER 29 Forest Area Utilization Regulation 419 I Executive Summary 419 II Details of Main Provisions 421 CHAPTER 30 Rent Use Permit Regulation 429 I Executive Summary 429 II Details of Main Provisions 431 CHAPTER 31 Forest License Moratorium Instruction 451 I Executive Summary 451 II Details of Main Provisions 452 CHAPTER 32 Forest Area Utilization for Underground Mining Activities Regulation 455 I Executive Summary 455 II Details of Main Provisions 456 CHAPTER 33 Procedures for Alteration of the Usage and Function of Forest Areas Amendment Regulation 463 I Executive Summary 463 II Details of Main Provisions 464 CHAPTER 34 Usage of Forest Areas Amendment Regulation 467 I Executive Summary 467 II Detail of Main Provisions 468 CHAPTER 35 Second Amendment Regulation re Guidelines for Rent Use of Forest Areas 471 I Executive Summary 471 II Details of Main Provisions 473 Glossary of Defined Terms 481 Index 491