Delegation of the Granting of Business Licensing in the Mineral and Coal Mining Sector

5 Jul

General Overview

As the implementation of the Article 8 of Government Regulation No. 96 of 2021, the Implementation of Mineral and Coal Mining Business Activities (“GR 96/2021”), the President of the Republic of Indonesia issued Presidential Regulation No. 55 of 2022 regarding the Delegation of the Granting of Business Licensing in the Mineral and Coal Mining Sector on April 11, 2022 (“PR 55/2022”).

The PR 55/2022 is considered necessary to be discussed further to understand the development of policies and harmonization of authority between the central governmentand governor in the mineral and coal mining sector.

This ARMA update will discuss the substances stipulated in PR 55/2022 in connection with the implementation of mineral and coal mining business activities, including (i) the delegation of authority, (ii) Guidance, Supervision, and Reporting.

Delegation of Authority

In PR 55/2022, it is regulated that the delegation of authority given by the central government toprovincial regional governments (governors) includes:¹

1. Issuance of the following documents:

a. standard certificate; and

b. permission;

2. Guidance on the implementation of the delegated Business Licensing; and

3. Supervise the implementation of the delegated Business Licensing.

4. The issuance of standard certificates referred to above includes consulting and planning activities for Mining services business in the fields of:²

5. General investigation;

6. Exploration;

7. Feasibility study;

8. Mining construction;

9. Transportation;

10. Mining environment;

11. Reclamation and post-mining;

12. Mining safety; and/or

13. Mining.

Furthermore, with regard to the granting of license are stipulated with the following specific provisions³

1. Mining Business License (“IUP”) in the context of domestic investment for non-metal mineral commodities with the following conditions:

located in 1 (one) province; or
sea area up to 12 (twelve) miles;

2. IUP in the context of domestic investment for certain types of non-metal mineral commodities with the following provisions::

located in 1 (one) province; or
sea area up to 12 (twelve) miles;

3. IUP in the context of domestic investment for rock commodities with the following provisions::

located in 1 (one) province; or
sea area up to 12 (twelve) miles;

4. Rock Mining License (“SIUPB”);

5. Community Mining License ("IPR");

6. Transport and Sales License for non-metal mineral commodities;

7. Transport and Sales License for certain types of non-metal mineral commodities;

8. Transport and Sales License for rock commodities;

9. Mining Services Business License (“IUJP”) for 1 (one) province;

10. IUP for the sale of non-metal mineral commodities;

11. IUP for the sale of certain types of non-metal mineral commodities; and

12. IUP for sale of rock commodities.

In addition to the delegation of authority by the central government to the provincial governments as mentioned above, the central government also delegates certain authorities to the provincial government to support the management of mineral and coal mining which includes:

1. Granting and establishment of non-metallic mineral mining business license areas, certain types of non-metal mineral mining business license areas, and rock mining business license areas with the following provisions::

located in 1 (one) province; or
sea area up to 12 (twelve) miles;

2. Determine of non-metal mineral benchmark price, determine of non-metal mineral benchmark price of certain types, and establishment of rock benchmark price; and

3. Providing recommendations or approvals relating to the delegated authority.

Article 2 (1) PR 55/2022
Article 2 (2) PR 55/2022
Article 2 (3) PR 55/2022

Disclaimer:
This client update is the property of ARMA Law and intended for providing general information and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. ARMA Law has no intention to provide a specific legal advice with regard to this client update.

Authors

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