The Government of Indonesia just issued Government Regulation No. 121 of 2015 regarding Exploitation of Water Resources for Business Purposes (“GR 121/2015”), as the implementing regulation of Law No. 11 of 1974 regarding Water Cultivation (“Law 11/1974”).

Law 11/1974 which was previously revoked by Law No. 7 of 2004 regarding Water Resources came back into effect when Law No. 7 of 2004 was revoked by the Indonesian Constitutional Court.

GR 121/2015 contains provisions which are meant to control and supervise the business exploitation of Surface Water (Air Permukaan) and Groundwater (Air Tanah) resources. It stipulates two types of licenses:

  1. Business Permit for the Exploitation of Surface Water; and
  2. Business Permit for the Exploitation of Groundwater.

The Business Permit for the Exploitation of Surface Water

This permit is issued by:

  1. The Ministry of Public Works and Housing, if the water is sourced from a trans-provincial or cross-country river or a river that has been determined as national strategic river;
  2. The Governor, if the water is sourced from a river located in more than one regency or city; or
  3. The Regent or the Mayor, if the water is sourced from a river that is located in one regency or city as relevant.

Surface Water Utilization Permit is valid for maximum 10 (ten) year depending on several factors as follows:

  1. Water availability;
  2. Water resources and related environmental conditions; and/or

The Business Permit for the Exploitation of Groundwater

This permit is issued by the Governor. The administrative and technical requirements are detailed in GR 121/2015. In addition, a technical recommendation is required from:

  1. The Ministry of Public Works and Housing, if the groundwater resource is located across a provincial or the country’s border, or on a national strategic zone; or
  2. The regional government agency in charge of groundwater matters, if the groundwater resource is located within a province which is not covered by point (a).

Underground Water Utilization Permit is valid for maximum validity period of 3 (three) years, depending on:

  1. The availability of the water;
  2. The environmental condition surrounding the water resource; and/or
  3. The business purpose of the water exploitation.

GR 121/2015 also imposes on the permit holder the obligation to submit monthly reports to the Governor on the water debit and to install a water meter on each production well.