Changing Oil and Gas Revenue Sharing Percentages Would Increase Regional Gaps

Eddy Suratman, professor at Tanjungpura University, denied claims that the government “leeches” revenue from East Kalimantan through the oil and gas revenue sharing system.

He asserted that the “leeching” claims, which led to a judicial review of Article 14 (e) and (f) of  Law No. 33 of 2004 on the Financial Balance Between State and Local Government, are hard to understand; particularly when looking at economic and social indicators for East Kalimantan.

Edy explained that East Kalimantan region has the third highest per capita expenditures of any region in Indonesia, almost twice the expenditures of West Java, Central Java, and East Java.

“Moreover, East Kalimantan has the highest fiscal capacity in Indonesia. East Kalimantan has a fiscal capacity of IDR 5,9 million per capita, which is higher than DKI Jakarta (IDR 2,4 million) and Riau (IDR 2,3 million). So the arguments are hard to prove,” Eddy said during a judicial review trial at the Constitutional Court (MK), Wednesday (15/2).

He also asserted that if the review is granted, the general allocation fund (Dana Alokasi Umum – DAU) for non-producing oil and gas regions will decrease. A sense of justice, Eddy said, cannot be achieved by prioritizing the interests of one particular region. Government and the interests of other regions must be considered too.

“Changing the oil and gas revenue sharing calculation by increasing the percentage for producing areas like Aceh and Papua, will increase inter-regional gaps,” Eddy asserted.

The request for judicial review was submitted by members of the United People of the Kalimantan Assembly (Majelis Rakyat Kalimantan Bersatu – MRKTB). The members are Sundy Ingan (head of Sungai Bawang village), Andu (farmer from Badak Baru village), and Luther Kombong, H Awang Ferdian Hidayat, Muslihuddin Abdurrasyid and Bambang Susilo (members of the Regional Representatives).

The applicants claim Article 14 (e) and (f) of Law 33/2004, which regulates the oil and gas revenue-sharing percentage, harms their constitutional rights. The government obtains 84.5 percent of oil sharing revenue, while 15.5 percent is allocated to local government. Meanwhile, 69.5 percent of natural gas sharing revenue goes to the government and 30.5 percent goes to the local government.

According to the applicants, the revenue sharing percentage is unfair and too low to improve people's quality of life. Furthermore, the applicant’s region suffers from low standards of living and social degradation, because it is a public mining area.

The applicants asked MK to declare Article 14 (e) and (f) of Law 33/2004 unconstitutional and not binding. They also asked for enforcement of the revenue sharing arrangement stipulated in Law No. 11 of 2006 on Aceh Government and/or Law No. 21 of 2001 on Special Autonomy for Papua.

(Agus Sahbani / Mahinda Arkyasa)