JAKARTA (TheInsiderStories) – On Monday (12/02) the Energy and Mineral Resources Ministry (MEMR) repealed 22 further regulations that are considered no longer relevant, as well as regulations that are hampering investment in the energy and mining sector.
Minister for Energy and Mineral Resources Ignasius Jonan said that as many as 51 regulations have been slimmed down to 29 regulations. 10 regulations in oil & gas sector are simplified to seven, two regulations in electricity are combined into one, six regulations in mining cut to 1, six regulations in new & renewable energy are reduced to 2 and 27 rules in Special Task Force for Upstream Oil & Gas are refined into just 18 regulations.
Regulations that Have Been Revoked
Last week, the Ministry also repealed 32 regulations. With today’s decision, so far, the Energy and Mineral Resources Ministry has revoked 54 regulations – consisting of ministerial decrees, stipulations and permits.
Minister Jonan said all regulations that are seen to be hampering investments have been scrapped, simplified or merged into one regulation, in line with an instruction from the President.
Minister Jonan said he hopes the decision will encourage more investment in this sector, which is targeted to reach more than US$50 billion, or double the investment in 2017. Last year, total investment in oil, gas and mining sector reached $26 billion.
In the oil & gas sector, Ministerial Decree Number 35/2008 on Oil & Gas Working Area Auction and Ministerial Decree Number 36/2008 on Coal Methane Gas is simplified into one regulation, and Regulation Number 05/2012 on Determination of WK area and Conventional gas.
In the oil & gas sector, two regulations – Ministerial Decree No 16, 2011 on fuel distribution and Ministerial Decree No 26, 2009 are merged into a draft Energy Ministry Decree on fuel, gas and LPG distribution. The regulation also provides a legal foundation for a one-price system for fuel.
In the oil & gas sector, Ministerial Decree Number 35/2008 on Oil & Gas Working Area Auction and Ministerial Decree Number 36/2008 on Coal Methane Gas is simplified into one regulation, with Regulation Number 05/2012 on Determination of Working Areas area and Conventional Gas.
Regulation on recommendations for foreign workers have also been repealed, Jonan added.
In the mining sector, the EMR Ministry has repealed Clear Certificates, along with Mining Business Permit recommendations. “We hope this decision will help achieve government investment target,” Jonan said.
Based on the Ministry’s data, investment in the oil & gas sector alone declined from $20.72 billion in 2014 to $17.38 billion in 2015, further falling to $12.74 billion in 2016 and further dropping to only $9.33 billion in 2017. This means last year’s investment in the oil & gas sector was only half of that in the sector in 2014.
Some industry players and analysts welcome the EMR Ministry’s decision to repeal certain Energy Ministry regulation. However, others questioned the Ministry actions, saying that they are merely cosmetic.