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Presidential Regulation Number 55 of 2022: New Provisions on Mining Business Permits

New Provisions on Mining Business Permits

On April 11th, 2022, the President of the Republic of Indonesia Joko Widodo issued Presidential Regulation Number 55 of 2022 on Delegation of Granting Business Permits in the Mineral and Coal Mining Sector (“PR 55/2022”). PR 55/2022 is a mandate of Law Number 3 of 2020 on amendments to Law Number 4 of 2009 on Mineral and Coal Mining. PR 55/2022, which regulates the transfer of part of the Central Government’s authority to be delegated to the provincial government with the objective of good and effective governance of mineral and coal mining, was issued after going through a long process of receiving input from various parties e.g., provincial governments, ministries/institutions, academics and the public. 

 

A. Delegation Background

 

The Director of Mineral Business Development at the Ministry of Energy and Mineral Resources (“MEMR”) stated that the total permits currently being processed at the Directorate General of Mineral and Coal specifically for minerals have reached more than 4000 (four thousand) temporary permits, which have not been registered in the Ministry system. The MEMR has reached 6000 (six thousand) permits so it is necessary to delegate the licensing authority. Therefore, the issuance of PR 55/2022 is expected to accelerate the service process. This delegation of authority initially was a mandate regulated in Law Number 3 of 2020 on Mineral and Coal Mining (“Law 3/2020”). 

 

Article 35 paragraph 1 of Law 3 of 2020 stipulates that mining businesses are carried out based on a Business Permit from the Central Government. Further, Article 35 paragraph 4 stipulates that the Central Government can delegate the authority to grant business permits to the provincial government in accordance with the provisions of laws and legislations. Meanwhile, PR 55/2022 has been issued to implement the mandate originally set out under Government Regulation Number 96 of 2021 on the Implementation of Mineral and Coal-Mining Business Activities (“GR 96/2021”) that business licensing in the form of the issuance of standard certificates and permits should be delegated to the provincial government.

New Provisions on Mining Business Permits

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B. Delegation of Authority to Provincial Government

 

PR 5/2022 essentially delegates the authority of the Central Government to the Provincial Government, which is described in the table as follows:

Delegated Authority
Standard Certificates In the field of consulting activities and business planning for mining services, general investigation, exploration, feasibility studies, mining construction, transportation, mining environment, reclamation and post-mining 
Permits
  1. Mining Business Permit (Izin Usaha Pertambangan, “IUP”) in the context of Domestic Investment (“Penanaman Modal Dalam Negeri, “PMDN”) for Non-Metal Mineral commodities that are in one province or sea area of up to 12 miles.
  2. IUP in the context of PMDN for certain types of Non-Metal Mineral commodities that are located in one province or sea area of up to 12 miles.
  3. IUP in the context of domestic investment for Rock commodities that are located in one province; or sea area of up to 12  miles.
  4. The issuance of other permits, namely, Rock Mining Permit (“Surat Izin Penambangan Batuan, “SIPB”), People’s Mining Permits (“Izin Pertambangan Rakyat, “IPR”), Transportation and Sales Permits (“Izin Pengangkutan dan Penjualan, “IPP”) for non-metal mineral commodities, IPP for certain types of non-metal mineral commodities.
  5. IPP for rock commodities, Mining Services Business Permits (“Izin Usaha Jasa Pertambangan, “IUJP”) for one province, IUP for selling non-metal mineral commodities, IUP for selling certain types of non-metal mineral commodities and IUP for selling rock commodities.
WIUP (“Wilayah Izin Usaha Pertambangan, “WIUP”) under classification of:

  • Non-Metal Minerals
  • Certain Types of Non-Metal Minerals
  • Rock
Benchmark Price Benchmark prices for groups of Non-Metal Minerals, Certain Types of Non-Metal Minerals, and Rocks
Guidance and Supervision The Provincial Governor assigns a Mining Inspector and Mining Supervisory Officer

 

C. Implementation

 

The Director General of Mineral and Coal at the MEMR said that the handover of some affairs that are under the authority of the Central Government to the provincial government related to Mineral and Coal will still await the readiness of the provinces so that this regulation can smoothly be implemented without problems. 

Ketentuan Baru Izin Usaha Pertambangan

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