Indonesia to Decentralise Mine Permit Processing

Indonesia’s energy ministry (ESDM) plans to delegate the processing of mining permits in a move to decentralise and speed up the process, with the processing of mining permits having previously been centralised in 2020.

The new regulation states that the delegated authority will allow provincial government offices to approve mining business permits for pre- and post-mining activity, as long as the mining concession is located solely within a single province. It will also empower provincial governments to conduct guidance, supervision and oversight of mining concessions in their regions, with the provincial governor given the right to assign a mining inspector and mining supervisory officer.

The new regulation is aimed at speeding up the application process, the ESDM said. The central office of the ESDM currently has the sole authority to issue new mining business permits, but this has led to a backlog of applications. There are around 6,000 mining permits for coal, metals, and minerals that are still in the processing stage, the ESDM added. Focusing solely on this will leave the ESDM unable to address other policy concerns, according to the ministry.

The ESDM is also expecting a faster application process to create a friendlier business climate within the industry. The industry has previously been critical of the slow pace, saying that this induces uncertainty in the investment climate of the mining sector.

The ESDM is currently co-ordinating with other relevant provincial governments in order to ensure a smooth transition during the decentralising process. The ESDM cannot decentralise the application process immediately as this could lead to errors, such as duplicated or dropped applications, it said. The ESDM did not specify when the process will be completed.

By Antonio delos Reyes