Obligation to Use Domestic Products of Operational Goods, Capital Goods, Equipment and Raw Material in Energy and Mineral Resources Sector

On September 5, 2018, the Minister of Energy and Mineral Resources of the Republic of Indonesia issued Decree of the Minister of Energy and Mineral Resources of the Republic of Indonesia Number 1953 K/06/ MEM/2018 concerning the Use of Operational Goods, Capital Goods, Equipment, Raw Materials and Other Supporting Materials Produced Domestically in the Energy and Mineral Resources Sector. This is the implementing regulation of the Minister of Energy and Mineral Resources Regulation Number 25 of 2018 concerning the Exploitation of Mineral and Coal Mining.

On the regulation, business entities that are obliged to comply with these rules are in the following sectors:

a. Oil and natural gas;
b. Minerals and coal;
c. Electricity; and
d. New renewable energy and energy conservation.

All business entities in those sectors must use operational goods, capital goods, equipment, raw materials, and other supporting materials produced domestically as long as they meet the quality or specifications, time of delivery, and price. If these goods can be fulfilled from domestic production, the business entities being the subjects of this regulation will not be awarded with import facilities (masterlist) for their importation of capital goods, raw materials and equipments.

The obligation to use operating goods, capital goods, equipment, raw materials and other supporting materials produced domestically is fostered and supervised by the Director General of Oil and Gas, Director General of Mineral and Coal, Director General of Electricity, and Director General of Renewable Energy and Energy Conservation. (ana)

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Dendi Adisuryo
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Liza Mashita
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This publication has been prepared by Aditya Yudhistira for general informational purposes only to provide clients with information on recent legal developments and is not intended as legal advice or opinion.