Energy & Natural Resources, Indonesia updates

MEMR moves quickly to limit application of coal price caps to new contracts
Ali Budiardjo, Nugroho, Reksodiputro
  • Indonesia
  • 02 April 2018

Following the recent issuance of the ​Ministry of Energy and Mineral Resources decree which imposed price caps on coal supplied for power generation in the public interest, the coal industry was expected to undertake significant lobbying in order to reduce or limit the decree's impact. This anticipated lobbying appears to have commenced already, as the decree was amended on March 12 2018 after having been on the statute books for just four days.

Government caps prices of coal for power generation
Ali Budiardjo, Nugroho, Reksodiputro
  • Indonesia
  • 26 March 2018

The government recently imposed caps on the prices payable for coal to be used for power generation in the public interest. The maximum price payable under the new Ministry of Energy and Mineral Resources decree is 30% less than the Indonesian benchmark price for equivalent coal sold for export in February 2018, which means that the country's coal producers will suffer a substantial cut to their profitability by selling coal for domestic power generation.

MEMR delivers on promise to revoke regulations
Ali Budiardjo, Nugroho, Reksodiputro
  • Indonesia
  • 19 March 2018

The Ministry of Energy and Mineral Resources recently announced the revocation of 32 regulations in furtherance of the government's efforts to reduce the regulatory burden on the energy and mineral resources sector. However, it was unclear which of these regulations had been revoked before the announcement and which would be revoked in the future. This situation has now been clarified with the issuance of four new revoking regulations, which form part of what some have called a 'big-bang' reform.

MEMR announces easing of regulatory burden for new and renewable energy sector
Ali Budiardjo, Nugroho, Reksodiputro
  • Indonesia
  • 05 March 2018

The Ministry of Energy and Mineral Resources recently announced the revocation of 32 regulations in the energy and mineral resources sector, three of which are of particular importance to independent power producers in the new and renewable power sub-sector. However, a subsequent examination revealed that most if not all of the regulations have yet to be revoked, and the lack of clarity in this regard has called the ministry's commitment to transparency into question.

Permit to establish foreign representative office in oil and gas sub-sector can now be obtained online
Ali Budiardjo, Nugroho, Reksodiputro
  • Indonesia
  • 05 February 2018

The Indonesian Investment Coordinating Board recently issued the Regulation concerning Guidelines and Procedures for Investment Licensing and Facilities. As regards the oil and gas sub-sector, the regulation states that a permanent business entity may apply for a permit to establish a foreign representative office in the oil and gas sub-sector through the Electronic Investment Information and Licensing Services. Foreign representative office permits are valid for three years and are extendable.

New Bill on Palm Oil: incentive package for businesses
Ali Budiardjo, Nugroho, Reksodiputro
  • Indonesia
  • 20 November 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
  • 06 November 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
  • 11 September 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
  • 28 August 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
  • 21 August 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
  • 06 June 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
  • 23 May 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
  • 03 August 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
  • 11 May 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
  • 17 November 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
  • 18 November 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
  • 24 September 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
  • 28 August 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
  • 02 July 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
  • 01 June 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.

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