Jakarta. The Indonesian House of Representatives (DPR) has approved the fourth amendment to Law No. 4 of 2009 on Mineral and Coal Mining (UU Minerba) in a plenary session on Feb. 18. The revised law introduces significant changes to mining license allocations, land-use regulations, contract extensions, and government oversight.

Here are the key provisions of the new law:

1. Mining Business License Areas (WIUP & WIUPK) – Articles 17A & 31A

• The central and regional governments must ensure that designated mining areas remain unchanged in terms of land use.
• Mining areas must meet criteria such as resource availability, production capacity, and domestic needs before licenses can be issued.

2. People’s Mining Areas (WPR) – Article 22A

• The amendment guarantees land-use stability for small-scale mining regions unless they conflict with other regulations.

3. Who Can Get a Mining License? (Articles 51, 51A & 51B)

Mining Business License Areas (WIUP) can be granted through:

• Auctions or priority allocation to:
  • Cooperatives
  • Small and Medium Enterprises (SMEs)
  • State-Owned Enterprises (BUMN) and Regional-Owned Enterprises (BUMD)
  • Private businesses
  • Religious organizations (through affiliated entities)
  • Universities

Initially, universities were included as eligible recipients, but the government later clarified this provision following public concerns over academic independence.

Energy and Mineral Resources Minister Bahlil Lahadalia clarified that universities would only benefit from mining operations, while the management of the mines would be entrusted to state-owned enterprises (SOEs), regional government-owned enterprises (BUMDs), or private entities appointed by the government.

"The government and DPR agreed to cancel the proposal to grant mining licenses to universities after considering public input. Instead, universities can receive benefits such as research funding, laboratory development funds, or scholarships," Bahlil said.

Bahlil added that the government will prioritize local companies and SMEs in mining regions to manage concessions, ensuring that economic benefits stay within local communities rather than being dominated by Jakarta-based firms.

4. Contract Extensions for Major Players – Article 169A

• Holders of Coal Contracts of Work (PKP2B) can now receive two 10-year extensions, provided they contribute to state revenue.

5. Strengthened Government Oversight – Articles 104A & 141B

• The Energy and Mineral Resources Ministry will directly manage a portion of non-tax revenue from mining operations.
• The government can assign state and regional research institutions to conduct exploration and development projects.

6. Overlapping Permits and Legal Compliance – Articles 173D & 174

• The government will evaluate and revoke overlapping permits issued before the law’s enactment if necessary.
• Supporting regulations must be issued within six months, and DPR will review the law’s implementation after two years.

Corruption Concerns Raised by Indonesia Corruption Watch (ICW)

The expanded eligibility for mining licenses has raised concerns from the Indonesia Corruption Watch (ICW), particularly regarding Articles 51(1), 51A(1), and 75(2).

ICW argues that including religious organizations and private entities in the mining licensing process could be politically motivated, benefiting government loyalists rather than experienced operators. The revision also increases the risk of corruption, as licenses can now be granted through prioritization instead of competitive auctions. Without clear criteria for prioritization, ICW warns that the process could be vulnerable to influence-peddling and bribery.

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