Energy & Natural Resources, Indonesia updates

New Bill on Palm Oil: incentive package for businesses
Ali Budiardjo, Nugroho, Reksodiputro
  • Indonesia
  • November 20 2017

The government and the House of Representatives recently agreed to prioritise the Bill on Palm Oil's enactment in 2017. This is despite the fact that the bill has been subject to criticism, particularly from environmental activists, who argue that there is no urgency for its enactment as most of the provisions are already contained in the Plantation Law. Regardless of the controversy surrounding its enactment, the bill contains a number of key provisions.

Simplified application procedures for oil and gas licences
Ali Budiardjo, Nugroho, Reksodiputro
  • Indonesia
  • November 06 2017

To promote a more conducive investment climate, the Ministry of Energy and Natural Resources recently simplified and streamlined the procedures for the application of upstream and downstream oil and gas-related licences through the Regulation concerning Licences in the Field of Oil and Gas. The new regulation has introduced some welcome changes – namely, licence applications can now be made online and most licences can now be issued within 10 to 15 calendar days.

More relaxed supervision in energy and mineral resources sector
Ali Budiardjo, Nugroho, Reksodiputro
  • Indonesia
  • September 11 2017

The minister of energy and mineral resources recently enacted Regulation 48/2017 on the supervision of business activities in the energy and mineral resources sector, which revoked the short-lived Regulation 42/2017 on the same subject. In a press release, the minister explained that the regulation's aim is to accommodate the interests of investors and prevent any hindrance to investment.

New provisions support use of renewable energy in electricity generation
Ali Budiardjo, Nugroho, Reksodiputro
  • Indonesia
  • August 28 2017

Despite the primary role that coal and gas continue to play in meeting Indonesia's electricity needs, the government seems to be demonstrating a commitment to promoting renewable energies. New regulations have provided clarity for investors interested in solar, wind, hydro, geothermal and biogas projects by introducing incentives for undertaking such projects, detailing the procedures for renewable power purchase agreements and updating the tariff rates.

New mineral export rules and their implications for mining companies
Ali Budiardjo, Nugroho, Reksodiputro
  • Indonesia
  • August 21 2017

A recently promulgated regulation has triggered a major shift in Indonesia's mineral and coal mining industries. Mineral mining companies that depend heavily on mineral exports will be particularly affected by the new policies. Primary changes require all companies operating under a contract of work to transfer to a single licensing regime and introduce stringent mineral export processing standards.

New regulation on export sales of processed and purified minerals
Ali Budiardjo, Nugroho, Reksodiputro
  • Indonesia
  • June 06 2016

The minister of energy and mineral resources recently issued the Regulation on the Procedure for the Issuance of Recommendation for Export Sales of Processed and Purified Minerals. The regulation – which has simplified the mineral export procedure – covers mineral export sales, the recommendation procedure, domestic refining facility construction plans and the issuance of performance bonds.

Government issues presidential regulation to accelerate electricity infrastructure development
Ali Budiardjo, Nugroho, Reksodiputro
  • Indonesia
  • May 23 2016

The government recently promulgated Presidential Regulation 4/2016 on Acceleration of Electricity Infrastructure Development as part of its commitment to ensuring the success of the 35,000 megawatt programme. The regulation shows the government's support for the prioritisation of new and renewable energy for the implementation of the development and provision of easy licence and permit processes.

Direct election and appointment of independent electricity producers by PLN
Ali Budiardjo, Nugroho, Reksodiputro
  • Indonesia
  • August 03 2015

To accelerate power plant development by the state electricity company (PLN), the minister of energy and mineral resources has issued a regulation that allows PLN to purchase electricity from independent producers through direct election and direct appointment, provided that certain criteria are met. The regulation also provides benchmark prices for the purchase of electricity.

New regulation requires letter of credit for export of natural resources
Ali Budiardjo, Nugroho, Reksodiputro
  • Indonesia
  • May 11 2015

Regulation 4/2015, which applies to the export of numerous products from natural resources, recently entered into force. The regulation requires Indonesian exporters of these products to obtain a letter of credit from their product buyer for an amount equal to the value of the products sold before their export.

The Geothermal Resources Act
Ali Budiardjo, Nugroho, Reksodiputro
  • Indonesia
  • November 17 2014

The House of Representatives has passed new legislation concerning geothermal energy. The new Geothermal Resources Act is a revised version of the 2003 Geothermal Energy Act, with major changes that are meant to ease development of the country's geothermal energy industry.

Energy minister issues new regulation on solar energy tendering
Ali Budiardjo, Nugroho, Reksodiputro
  • Indonesia
  • November 18 2013

The minister of energy and mineral resources recently issued a regulation intended to promote greater use of solar energy for electricity generation. The regulation stipulates that Perusahaan Listrik Negara – the state-owned electricity company – will purchase the electricity produced by the solar power plant of the business entity that wins a capacity quota tender.

Regulation eases restrictions on export of minerals
Ali Budiardjo, Nugroho, Reksodiputro
  • Indonesia
  • September 24 2012

The minister of energy and mineral resources has issued Regulation 11/2012, which amends the obligation to refine minerals imposed under Regulation 7/2012 on Increasing Minerals' Added Value Through Mineral Processing and Refining Activities. This new regulation relaxes the previous ban on miners exporting raw materials, ore and rocks.

New export procedures for mining products introduced
Ali Budiardjo, Nugroho, Reksodiputro
  • Indonesia
  • August 28 2012

In an effort to curb raw mineral exports, the minister of trade has issued the Regulation on Provisions of Mining Products Export. The mining products subject to the regulation comprise 65 metal minerals, non-metal minerals and rocks. Under the regulation, these regulated products may be sourced only from parties that hold a mining permit and their export may be conducted only by exporters that are licensed as a registered exporter.

CSR now mandatory for natural resources companies
Ali Budiardjo, Nugroho, Reksodiputro
  • Indonesia
  • July 02 2012

The president has finally signed the long-awaited implementing regulation for Article 74(4) of Law on Limited Liability Companies. The regulation answers the controversial question of whether corporate social responsibility is voluntary or obligatory for companies, and has particular relevance for natural resources companies and those in related industries.

New cross-border power sale and purchase regime in place
Ali Budiardjo, Nugroho, Reksodiputro
  • Indonesia
  • June 01 2012

Government Regulation 42/2012 on Cross-Border Power Sale and Purchase was recently signed by the president. The regulation stipulates that cross-border electricity sale and purchase are subject to the prevailing customs laws and regulations, and must adhere to certain requirements.

New regulations for electrical power supply businesses
Ali Budiardjo, Nugroho, Reksodiputro
  • Indonesia
  • April 30 2012

The government has issued a new regulation to implement certain provisions of the Electricity Law. It covers a range of issues, including licensing and certification, land use for electrical power supply activities and the determination of sales prices, network leases and tariffs.

New divestment obligations for foreign shareholders of mining licensees
Ali Budiardjo, Nugroho, Reksodiputro
  • Indonesia
  • April 10 2012

The Regulation on Mining Business Activities created divestment obligations for foreign shareholders of a company with a mining licence or a special mining licence. A new amendment requires a further divestment of up to 51% to an Indonesian party no later than 10 years after the start of commercial production. A number of other changes may also affect investors in the extractive industries.

Perimeter establishment in forest utilisation permit areas
Ali Budiardjo, Nugroho, Reksodiputro
  • Indonesia
  • July 25 2011

Under Article 71 of the Regulation on Forest Land Use and Development of Forest Management Planning and Forest Utilisation, forest utilisation permit holders must submit a perimeter establishment plan for their work area within one year of the permit issue date. The minister of forestry has issued a regulation on boundary arrangements of working areas for forest utilisation licences.

New guidelines for forest reclamation
Ali Budiardjo, Nugroho, Reksodiputro
  • Indonesia
  • May 31 2011

The minister of forestry has issued new implementation regulations regarding forest land reclamation. Forest licence holders are required to prepare a five-year reclamation plan. Each plan must specify, among others things, schedule, budget, the reclamation activities and an annual reclamation plan map.

Tax incentive for geothermal exploration, oil and gas
Ali Budiardjo, Nugroho, Reksodiputro
  • Indonesia
  • May 16 2011

The government has taken steps to address Indonesia's declining oil production by providing fiscal incentives to oil and gas operators. It will waive value-added tax on goods imported for the purposes of upstream oil and gas activities or geothermal exploration for the budgetary year 2011.

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