Mining Conscessions 'Alert' to Indonesian Religious Organizations

Religious organizations in Indonesia receive mining concessions after President Joko Widodo on Thursday (30/5/2024) signed Government Regulation (PP) 25/2024 on the amendment to PP 96/2021 on the implementation of mineral and coal mining business activities. Article 83A of PP 25/2024 states that the new regulation allows religious community organizations (CSOs) such as NU and Muhammadiyah to manage special mining permit areas (WIUPK). 

This policy get warm welcome from PBNU Chairman KH Yahya Cholil Staquf (Gus Yahya). He said that granting mining licenses to mass organizations was a bold step by President Joko Widodo to expand the use of natural resources for the benefit of the people.“This policy is a bold step that is an important breakthrough to expand the utilization of natural resources controlled by the state for the benefit of the people more directly,” Gus Yahya said in a written statement here on Monday.

Therefore, PBNU expressed its gratitude to President Jokowi for the step to expand the granting of mining licenses to mass organizations. “PBNU is grateful with high appreciation to President Joko Widodo for his affirmative policy to grant concessions and mining business licenses to religious organizations, including Nahdlatul Ulama,” said Gus Yahya.

In the near future, PBNU will be the first religious organization to manage mining land. Meanwhile, PP Muhammadiyah is still reviewing the government's offer. Two Christian religious organizations, namely the Association of Indonesian Churches (PGI) and the Indonesian Bishops Conference (KWI), have rejected the offer.

Minister of Energy and Mineral Resources Arifin Tasrif revealed that the government has prepared six former Coal Mining Concession Work Agreements (PKP2B) to be given to several religious organizations.  There are two from Islam, namely, NU and Muhammadiyah. Meanwhile, for Catholics, Protestants, Hindus, Buddhists. So far, only NU is in the process. Some others are still showing resistance.

“This is the government's effort to be able to provide opportunities for religious organizations that have been non-profit. They have sources that support religious activities, worship, education, health,” Arifin said at the Directorate General of Oil and Gas (DG Oil and Gas) office, Jakarta, Friday (7/6/2024).

As mentioned above, the mining land that will be managed by the former PKP2B has been shrunk.  Where are the former mining lands?  The list includes PT Kaltim Prima Coal, PT Arutmin Indonesia, PT Kendilo Coal Indonesia, PT Multi Harapan Utama, PT Adaro Energy Tbk, PT Kideco Jaya Agung.

NU began to carry out stage by stage, including taking care of licensing. Investment Minister/Head of the Investment Coordinating Board (BKPM) Bahlil Lahadalia said PBNU would get the former PKB2B of PT Kaltim Prima Coal (KPC). It is one of the subsidiaries of PT BUMI Resources Tbk (BUMI) and the Bakrie Group.Then what if there are still those who refuse? According to Arifin, the mining land will be returned to the government. “Back to the state, we apply it as the main rule. Auctioned off if you don't want to take it,” said the 70-year-old figure.

Warning from the Muhammadiyah Law and Human Rights Council

In the midst of the struggle over mining concession rights for the organization, the Muhammadiyah Law and Human Rights Council gave warning. The assembly provided a legal opinion to the Muhammadiyah central board (PP), which was conducting a study on the concession. However, PP Muhammadiyah General Secretary Prof. Abdul Muti in his written statement stated that his party is still reviewing the government's offer to take mining land concessions.

In a letter dated May 11, 2024 addressed to PP Muhammadiyah and shown to MOSAIC, the Law and Human Rights Council concluded that the Minister of Investment/Head of BKPM does not have the authority to offer and grant WIUP to business actors including business entities owned by mass organizations.

WIUP is a Mining Business License Area (WIUP) granted by the government to business actors including business entities owned by mass organizations and regulated in Presidential Regulation No. 70 of 2023. Article 5 paragraph (1) of the Presidential Regulation states that “The Minister of Sector Supervisor (Minister of Energy and Mineral Resources) delegates the authority to determine, offer, and grant WIUP to the minister/head of the agency that organizes government affairs in the field of investment/coordination of investment as chairman of the Task Force”.

With this provision, the Minister of Investment/Head of BKPM has the authority and can make policies and determine, offer, and grant WIUP to business actors including BUM Desa, BUMD, business entities owned by mass organizations, cooperatives, business entities owned by small and medium enterprises.

“The provision of authority through delegation from the Minister of Energy and Mineral Resources to the Minister of Investment / Head of BKPM violates the provisions in Law Number 30 of 2014 concerning Government Administration as amended by Perppu Number 2 of 2022 concerning Job Creation (Government Administration Law),” wrote the letter signed by Chairman Trisno Raharjo and Secretary Muhammad Alfian.

Article 1 Number 23 of the Government Administration Law states “Delegation is the delegation of Authority from higher Government Agencies and/or Officials to lower Government Agencies and/or Officials with the responsibility and accountability fully transferring to the recipient of the delegation”.

According to the letter, this provision contains the element that delegation is carried out by higher Government Agencies and/or Officials to lower Government Agencies and/or Officials. Thus, delegation of authority cannot be done from the Minister of Energy and Mineral Resources to the Minister of Investment/Head of BKPM because the position of the Minister of Energy and Mineral Resources and the Minister of Investment/Head of BKPM are equal/equal as fellow ministers and cabinet members. Therefore, the authority of the Minister of Investment/Head of BKPM to grant WIUP to business actors including business entities owned by mass organizations is not based on law. 

Another conclusion is that the direct granting of metal mineral and coal WIUP without going through an auction process is a violation of the Minerba Law (Regulations for Mineral and Coal). The granting of WIUP is also considered an abuse of authority that can potentially become a criminal act of corruption.

Article 5 paragraph (3) states that “...The Task Force (Minister of Investment / Head of BKPM) offers and grants WIUP to business actors as referred to in Article 4 paragraph (5) letters a to letter e (BUM Desa, BUMD, business entities owned by mass organizations, cooperatives, business entities owned by small and medium enterprises)”.

With this provision, the Minister of Investment/Head of BKPM offers and grants WIUP to business actors including business entities owned by mass organizations.

According to the letter from the Law and Human Rights Council, this provision on the granting of WIUP violates Law No. 3 of 2020 concerning Amendments to the Law on Mineral and Coal Mining. Article 51 paragraph (1) of the Minerba Law states “Metal Mineral WIUP is given to Business Entities, cooperatives, or individual companies by auction”, further in Article 60 paragraph (1) states “Coal WIUP is given to Business Entities, cooperatives, or individual companies by auction”.

“This provision implies that the granting of metal mineral and coal WIUP must be given by auction, cannot be given (divided) and directly determined or directly obtain IUP. WIUP auction as stipulated in Article 51 paragraph (2) is carried out by considering the ability of business actors related to administrative/management, technical capabilities and environmental management, and financial capabilities,” the letter quoted.

For this reason, in the next conclusion, the Legal and Human Rights Assembly requested that PP Muhammadiyah need to consider carefully regarding the offer of mine management considering that Perpres 70 Year 2023 contradicts the Minerba Law and the Government Administration Law. “If the policy of the Central Leadership in formal legality considers that as long as it has not been canceled, the provisions of Perpres 70 of 2023 remain in effect, we consider that the Central Leadership is obliged to have good governance rules in order to be ready and able to anticipate the impacts caused by mining activities which include environmental damage and social conflict,” said the letter.