Prayogo Serevin Wisnumurti, M. Agus Yozami/RED
Ministry of Energy and Mineral Resources. Photo by: RES
The Ministry of Energy and Mineral Resources (Kementerian Energi dan Sumber Daya Mineral
- ESDM) has just revised ESDM Regulation No. 42 of 2017
with Regulation No. 48 of 2017 on the Supervision of Businesses in the Energy and Mineral Resources Sector (Regulation 48/2017). These regulatory changes are intended to optimize and simplify the supervision process within the energy and mineral-resources sector.
“Two things can be concluded from the aspirations of investors, the first is that there should be a simplification of the current regulation through a process of guidance, while the second involves the provisions that regulate this process of supervision and guidance. This especially relates to State-Owned Enterprises (Badan Usaha Milik
Negara – BUMN) and their subsidiaries,” stated Mr. Teguh Pamudji, Secretary General of the ESDM during the inauguration process for the socialization of ESDM Regulation 48/2017, as reported on the Ministry of Energy and Mineral Resources website on Monday 7 August, 2017.
Mr. Hufron Asrofi, the Head of ESDM’s Legal Bureau, has also added that the revision of the regulation is in line with a mandate from President Joko Widodo, who is looking to guarantee convenience for investors. “In accordance with the President's mandate, we are currently revising this regulation so as not to impede investment,” Mr. Asrofi added.
ESDM Regulation 48/2017 now regulates for transfers of shares, as well as changes which are made to the composition of any boards of directors or commissioners. However, in the oil-and-gas subsector, the transfer of any participating interest must first be approved by the Ministry of ESDM (Ministry). Meanwhile, any transfers of shares which result in any change in direct control must also first be approved by the Ministry after an assessment has been made by the Special Task Force for Upstream Oil-and-Gas Business Activities (Satuan Kerja Khusus Pelaksana Kegiatan Hulu
Migas - SKK Migas).
Any transfers of shares which results in any change in indirect control must first be reported to the Minister through the Head of SKK Migas. Moreover, any changes which are made to boards of directors or commissioners must also must be reported to the Ministry through the Director General of Oil and Gas.
In the electricity subsector, any transfer of shares involving a Power-Plant Permit Holder (Izin Usaha Pembangkit Tenaga
Listrik - IUTPL) must first be reported to the Ministry. Moreover, any changes which are made to any IUPTL boards of directors or commissioners must be reported to the Ministry through the Director General of Electricity.
In the Minerals and Coal subsector (Mineral dan Batubara
- Minerba), the transfer of any shares under either a Mining Business License (Izin Usaha
Pertambangan - IUP) or a Special Production Operation IUP License (Izin Usaha Pertambangan Operasi Produksi
Khusus - IUP-OP) must first be approved by the Ministry. Moreover, any changes which are made to any boards of directors or commissioners also must be approved by the Ministry.
Moving on, in the New Renewable Energy Conservation subsector (Energi Baru Terbarukan Konservasi
Energi - EBTKE) any transfers of shares which are undertaken under a Geothermal License (Izin Panas
Bumi - IPB) and which involve holders of geothermal-resource concessions, joint-operation contractors for geothermal resource concessions, or geothermal resource concession licenses within the Indonesian stock market after the completion of an exploration stage, must first be approved by the Ministry.
Moreover, any transfers of shares through any stock exchange outside of Indonesia undertaken after completion of the relevant exploration stage must be reported to the Ministry through the Director General of EBTKE. Finally, any changes which are made to any boards of directors or commissioners must be reported to the Ministry through the Director General of EBTKE.
According to Mr. Pamudji, transfers of shares and changes which are made to any BUMN boards of directors or commissioners should be implemented in accordance with the relevant laws and regulations and also reported to the Ministry.
“We believe that the ESDM Regulation is already reasonably accommodating. A balance has been struck between the ESDM Ministry and the needs of the sector as regards the undertaking of guidance and supervision. On the one hand, the level of supervision remains sufficient but on the other hand, the supervision process should hopefully not prove to be too disturbing to investors. We remain confident that we offer still offer a service that can help companies to facilitate their various activities,” Mr. Pamudji concluded.