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05 March 2018
On February 5 2018 the Ministry of Energy and Mineral Resources (MEMR) announced the revocation of 32 regulations in the energy and mineral resources sector. However, a subsequent examination revealed that most if not all of the regulations have yet to be revoked. Although this should happen in the future, there is no timeline in place at present. In the meantime, the MEMR has unofficially stated that the regulations in question will no longer be enforced. Therefore, the regulations remain legally binding until they are legally revoked by another legal instrument of equal or higher status. This could have consequences should a dispute involving the relevant regulations come before the courts.
The ministry has announced that 11 regulations will be revoked in the power sector, the following of which are of particular importance to independent power producers (IPPs) in the new and renewable power sub-sector:
The revocation of the above regulations will simplify the licensing process and eliminate certain obligations placed on IPPs operating in the new and renewable energy sub-sector.
Under MEMR Regulation 19/2015, IPPs will no longer be required to:
Under MEMR Regulation 19/2016, IPPs will no longer be required to:
Under MEMR Regulation 21/2016, IPPs will no longer be required to:
According to the MEMR's press release, the revocation of regulations is being undertaken as part of the government's economic reform programme, which – among other things – aims to enhance transparency. While any reduction in the regulatory burden on investors is to be welcomed, the lack of clarity over which regulations have been revoked and which will be revoked in the future has called the ministry's commitment to transparency into question.
For further information on this topic please contact Giffy Pardede or Serafina Muryanti Hayu P at Ali Budiardjo, Nugroho, Reksodiputro by telephone (+62 21 250 5125) or email (firstname.lastname@example.org or email@example.com). The Ali Budiardjo, Nugroho, Reksodiputro website can be accessed at www.abnrlaw.com.
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