The Ministry of Energy and Mineral Resources (MEMR) recently announced the revocation of 32 regulations in furtherance of the government's efforts to reduce the regulatory burden on businesses in the energy and mineral resources sector (for further details please see "MEMR announces easing of regulatory burden for new and renewable energy sector"). However, it was unclear which of these regulations had been revoked before the announcement and which would be revoked in the future.
This situation has now been clarified with the issuance of four new revoking regulations, which form part of what some have called a 'big-bang' reform. However, there has been some criticism that many of the revoked regulations were:
- already obsolete;
- in abeyance; or
- of little overall significance to investors.
Despite such criticism, any lightening of the regulatory burden on businesses and thinning out of the country's bulging statute books should be warmly welcomed.
The abovementioned revoking regulations are:
- the MEMR Regulation on the Revocation of Regulations in the Oil and Gas Sector (6/2018), which revokes 11 regulations;
- the MEMR Regulation on the Revocation of Regulations in the Electricity Sector (7/2018), which revokes four regulations;
- the MEMR Regulation on the Revocation of Regulations in the Minerals and Coal Sector (8/2018), which revokes seven regulations; and
- the MEMR Regulation on the Revocation of Regulations in the New and Renewable Energy and Energy Conservation Sectors (9/2018), which revokes five regulations.
The full list of MEMR regulations that have been revoked by the abovementioned regulations is as follows:
Oil and gas sector The regulations revoked by MEMR Regulation 6/2018 are:
- the MEMR Regulation on Occupational Safety at Transmission Pipelines and Support Facilities for Oil and Gas Transportation Outside Oil and Gas Extraction Zones (02/P/M/PERTAMB/1975);
- the MEMR Decree on Technical Guidelines for the Performance of Governmental Duties in the Oil and Gas Sector (1454 K/30/MEM/2000);
- the MEMR Regulation on Marginal Oil Field Development Incentives (0008/2005);
- the MEMR Regulation on the Supply and Distribution of Certain Types of Hydrocarbon-Based Fuels (0044/2005);
- the MEMR Regulation on the Supply of Hydrocarbon-Based Fuels for Strengthening the Shipping Industry (026/2006);
- the MEMR Regulation on the Fulfilment of Domestic Fuel and Natural Gas Supply Obligations by Production Sharing Contractors (02/2008);
- the MEMR Regulation on Cost Categories in the Upstream Oil and Gas Industry that are Non-recoverable by Production Sharing Contractors (22/2008);
- the MEMR Regulation on Policy Guidelines for Increasing Oil and Gas Production (06/2010);
- the MEMR Regulation on Provisions and Procedures Governing the Employment of Expatriate Manpower and the Development of Indonesian Human Resources in the Oil and Gas Industry (31/2013);
- the MEMR Regulation on the Development of Small-Scale Oil Refineries (22/2016); and
- the MEMR Regulation on Guidelines and Management Procedures for the Administration of State Assets in Upstream Oil and Gas Operations (51/2017).
Electricity sector The regulations revoked by MEMR Regulation 7/2018 are:
- the MEMR Regulation on the Relationship Between the Electricity Business Authority Holder and the Holders of Electricity Business Permits for Public and Community Interests (02.P/451/M.PE/1991);
- the MEMR Regulation on Electricity Connection Requirements (03.P/451/M.PE/1991);
- the MEMR Regulation on the Selling Price for Electricity Supplied by PT Pelayanan Listrik Nasional Batam (33/2008); and
- the MEMR Regulation on Prices for Electricity Purchased by PT PLN (Persero) from Small and Medium-Scale Renewable Energy Power Plants or Excess Electricity (04/2012).
Minerals and coal sector The regulations revoked by MEMR Regulation 8/2018 are:
- the MEMR Decree on the Inspection of Mines in the General Mining Sector (2555.K/201/M.PE/1993);
- the MEMR Decree on Supervision of the Implementation of Environmental Management Plans and Environment Monitoring Plans in the Mining and Energy Sectors (103.K/008/M.PE/1994);
- the MEMR Decree on the Ministry of Mines and Energy's Central Environmental Impact Analysis Commission (620.K/008/M.PE/1994);
- the MEMR Decree on the Provision of Preliminary Investigation Permits in the Context of Foreign Investment and Domestic Investment in the General Mining Sector (2202.K/201/M.PE/1994);
- the MEMR Decree on the Use of Maps, Explanations on Boundaries and Areas of Mining Concessions, Contract of Work Areas and Coal Contract of Work Areas in the General Mining Sector (134.K/201/M.PE/1996);
- the MEMR Decree on Proofs of Commitment and Capacity on the Part of Mining Concession, Contract of Work and Coal Contract of Work Applicants (135.K/201/M.PE/1996); and
- the MEMR Decree on Guidelines for the Processing of Contract of Work and Coal Contract of Work Applications in the Foreign Direct Investment Context (1614/2004).
New and renewable energy and energy conservation sectors The regulations revoked by MEMR Regulation 9/2018 are:
- the MEMR Regulation on Electrical Energy Efficiency (13/2012);
- the MEMR Regulation on the Purchase of Electricity by PT PLN from Hydropower Plants with a Capacity of up to 10 Megawatts (19/2015);
- the MEMR Regulation on the Establishment of Energy Conservation Services Companies (14/2016);
- the MEMR Regulation on the Purchase of Electricity by PT PLN from Photovoltaic Solar Power Plants (19/2016); and
- the MEMR Regulation on the Purchase of Electricity by PT PLN from Biomass and Biogas Power Plants (21/2016).
Such a wholesale revocation of regulations is unusual in the Indonesian context and appears to demonstrate the MEMR's commitment to the government's oft-stated goal of enhancing the country's competitiveness. With Indonesia coming under increasing pressure from regional trade rivals, such as Vietnam, it is hoped that this commitment will be maintained going forward.
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