Provisions on the Reconciliation, Depositing and Reporting of Geothermal Production Bonuses Further Regulated
The Ministry of Energy and Mineral Resources has issued Regulation No. 23 of 2017 on Procedures for the Reconciliation, Depositing and Reporting of Geothermal Production Bonuses, which is an implementing regulation to the provisions originally set out under Government Regulation No. 28 of 2016 and which relates to the following matters: 1) Annual geothermal steam and/or electrical-power production plans; 2) The imposition and calculation of geothermal production bonuses; 3) The reconciliation of production-bonus calculations; 4) The determination of production-bonus amounts and deposits; and 5) Mandatory reporting.
General Plan for National Energy
In order to implement Article 12, paragraph (2) and Article 17, paragraph (1) of Law No. 30 of 2007 on Energy, the Government has just issued Presidential Regulation No. 22 of 2017 on General Plan for National Energy. In essence, the General Plan for National Energy sets out a blueprint for the realization of National Energy Policy objectives and for the achieving of national energy independence and security by 2050. This blueprint mainly comprises of five sections, specifically: (1) Introduction; (2) The current condition of national energy policy and future expectations; (3) Vision, mission, purpose and objectives for national energy policy; (4) Policy and strategy for the national energy management; and (5) Closing remarks.
Draft Bill on Water Resources
The House of Representatives is currently in the process of discussing the Draft Bill on Water Resources in response to Constitutional Court Decision No. 85/PUU-XI/2013, which declared Law No. 7 of 2004 on Water Resources to be null and void. The Draft Bill is aiming to update the umbrella arrangement for the management of water resources, which currently falls under the obsolete Law No. 11 of 1974 on Water. Containing a total of 50 articles, the Draft Bill in general addresses the following matters: rights over water resources, the authority and responsibilities of the government, water-resource management measures, financing for water-resource management, rights, the obligations and roles of communities, coordination of water-resources management, the investigation of water-resource related crimes.
New Procedures and Pricing Guidelines for the Utilization of Coal for Power Plants and for the Purchase of Excess Power
The government’s efforts to optimize Indonesia's electrification ratio continues. This time through the issuance of Ministry of Energy and Mineral Resources Regulation No. 19 of 2017 on the Utilization of Coal for Power Plants and the Purchase of Excess Power. The regulation sets out a more efficient procedure and pricing mechanism for PT PLN and operators of mine-mouth and non-mine-mouth power plants. The regulation also redefines basic provisions on the procedure for the purchase of excess power from holders of operational licenses who generate power for their own use
New Regulation on the Indirect Utilization of Geothermal Energy
Government Regulation No. 7 of 2017 on the Indirect Utilization of Geothermal Energy has just been issued and implements several articles originally set out under Law No. 21 of 2014 on Geothermal Energy. The regulation stipulates a wide range of provisions which relate to the indirect utilization of this resource in order to produce electrical power, including the government’s authority as regards the indirect utilization of geothermal energy, working areas and their offerings, geothermal utilization activities, the rights and obligations of geothermal license holders, geothermal supporting businesses, geothermal pricing, geothermal data and information, and relevant development and supervision measures.
Guidelines for the Granting of IUPK OPs to Holders of KKs or PKP2Bs
The Ministry of Energy and Mineral Resources (“Ministry”) has issued Regulation No. 15 of 2017 on Procedures for the Granting of Special Mining Business Licenses for Production Operations as a Continuation of Contracts of Work or Coal-Mining Business Working Agreements. The regulation addresses procedures and requirements for converting Contracts of Work (KK) or Coal-Mining Business Working Agreements (PKP2B) into Special Mining Business Licenses for Production Operations (IUPK OP)
Exports of Processed and Purified Mining Products
In a bid to increase the export value of mining products, the Ministry of Trade (“Ministry”) has issued Regulation No. 01/M-DAG/PER/1/2017 on Export Provisions for Processed and Purified Mining Products. In short, the regulation addresses several matters, including limitations on exports of processed and purified mining products, an export ban on raw materials and ores, export approval, requirements for surveyors, verification procedures, reporting obligations and mineral products which are exempt under the regulation.
New Guidelines for the Utilization of Renewable Energy to Meet National Energy-Security Targets
In order to offer updated guidelines on the utilization of renewable energy for the generation of electrical power and therefore meet the national energy security target of lower levels of carbon dioxide in the environment, the Ministry of Energy and Mineral Resources (“Ministry”) has issued No. 12 of 2017 on the Utilization of Renewable Energy for the Procurement of Electrical Power. The new regulation addresses a number of important matters relating to the utilization of renewable energy, including maximum purchase prices, the due-diligence processes which are to be undertaken prior to purchase, domestic component levels and standards for power plants, the transparency of PLN, standards for power purchasing agreement, and sanctions for the delayed development of renewable-energy based power plants.
Government Regulates Natural Gas Utilization by Power Plants
The Ministry of Natural Resources has issued Regulation No. 11 of 2017 on Natural Gas Utilization by Power Plants in order to ensure a higher level of natural-gas utilization by power plants owned by PT PLN, as well as private businesses involved in the running of power plants and which are bound by power-purchasing agreements with PT PLN. The regulation will also ensure that all such natural gas is obtained at competitive yet fair prices. With these aims in mind, the regulation in general sets out a number of provisions relating to supplies of natural gas, sale-and-purchase agreements, prices and distribution tariffs.
New Divestment Procedures for Foreign Mining Companies
The Ministry of Energy and Mineral Resources recently issued Regulation No. 9 of 2017 which sets out further guidelines for foreign mining companies regarding their compliance with the obligation to gradually divest 51% of their total shares within five years of their fifth production year. These guidelines set out the procedures involved in the offering of shares to Indonesian parties, as well as the procedures to be followed when determining share prices and when paying for any divested shares.