Audit Agency To Review Indonesia’s Mining Permits

By webadmin on 08:00 pm Sep 05, 2012
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Markus Junianto Sihaloho

The Supreme Audit Agency is reviewing more than 10,000 mining concessions as Indonesia enters the second half of a two-year moratorium on deforestation.

Arif Sendjaya, BPK’s chief auditor for region IV which includes Sumatra, Java, Bali and West Nusa Tenggara, said that the review is scheduled for next month and should be completed next year.

“We will conduct preliminary examinations, including on the procedure of how the concession is given, whether these permits were issued according to regulations and procedures or not,” he said.

The BPK, he said, will also monitor the concessionaires’ compliance with other rules and regulations.

“So [concessions] must not only follow the rules set by the Energy Ministry but also, for example, comply with the rules set by the Environment Ministry. All these must be conformed,” Arif said.

Environment Minister Balthazar Kambuaya said his office will not endorse an extension of mining concessions without renewing its Environmental Impact Analysis (Amdal).

“If they want to renew [permits] the Amdal must be cleared and reviewed,” he said. “Amdal must be renewed, to preserve the environment. Companies must comply to existing rules.”

Last year, the government audited more than 8,000 existing mining permits to make sure they are in line with mining and environmental laws.

President Susilo Bambang Yudhoyono last year signed a two-year moratorium on permits for logging and another decrees allowing underground mining in protected forests if conditions such as an environmental assessment have been met. The rules were softer than expected by environmentalists and it was not clear if the audit of permits would lead to any cancelations. Indonesia had already stopped issuing new mining permits ahead of mining regulations stemming from a 2008 law.

The moratorium was part of a UN-based project, financed largely by Norway, to reduce carbon emissions.

But higher commodity prices are attracting increased investment interests in mining metals, such as nickel, in Indonesia, despite red tape, poor infrastructure and corruption.

But the severe bottleneck in mining license issuance threatens further development of Indonesia’s resources, executives have said.

Global miners with projects in Indonesia include Newmont Mining, Freeport-McMoRan Copper & Gold and BHP Billiton. Indonesia is the world’s top exporter of thermal coal and tin.