Publications

It has been a public knowledge that the regulation of extraction industry activities in Forest Areas has proved to be one of the most challenging for many companies from the sector, including oil and gas companies, in Indonesia with any number of discouraging stories about the difficulty of and the associated delay and expense in obtaining Lend Use Permits which are required for mining activities in Forest Areas. The difficulty and the associated delay and expense in obtaining Lend Use Permits (LUP) seemed to be compounded by the changes of Indonesian administration, as well as the recent world biggest forest incident of the decade, Indonesian forest fire. Oil and Gas companies’ concern about the possible implications of the above events was heightened as a result of possible policy changes, which may include Moratorium. From previous experience, the condition suggested that the Government was struggling to resolve different interest of different stakeholders in Forest Area utilization. Some of the challenging issues in Indonesian Government governance at the policy level are inter-ministerial communication and coordination. There appears to be a silo approach by sector ministries rather than a coordinated approach to deliver efficiency in land use and natural resources management. This applies to the development of sector laws governing natural resources, land, forest, etc. by each respective ministries. Thanks to the new administration, nowadays the government is trying to accelerate the time of land permit process for energy sector which connected to the land, forestry, and transportation sectors. The Simplification of permit process related to the forestry sector as mentioned in the Ministerial Regulation of Minister of Environment and Forestry No. P.7/MenLHK-II/2015 on the Instructions of the Licensing and Non-licensing Allocation in the Field of Environment and Forests in order to the Implementation of the integrated one-stop service (PTSP) in Investment Coordinating Board (BKPM), the permits use of forest areas for Mining Production Operations and Non Mining Production Operation from 90 working days becomes to 52 working days, and Lend Use Permit of Forest Areas to Survey/Exploration from 110 working days become to 52 working days. The Ministry of Environment and Forestry (MoEF) Lend Use Permit Regulation is, apparently, intended to remove much of the uncertainty and reduce much of the delay which is presently associated with obtaining a Lend Use Permit. However, whether or not these objectives are realized depends very much on how the MoEF Lend Use Permit Regulation under PTSP is implemented in practice.