LOCAL INNOVATION :OIL/GAS TRANSPARENCY MECHANISMBLORA DISTRICT
LOCAL INNOVATION :OIL/GAS TRANSPARENCY      MECHANISM    BLORA DISTRICT    Jakarta, May 23rd 2012
Basic Problem   Revenue Sharing Mechanism:       A mere socialization       Local Govt. do not have the necessary data ...
Objectives of Transparency Mechanism    To make transparent of information on     revenue, CSR-Comdev and information on ...
Stages of Process    Study      Study on local problems related to revenue, CSR and environment      Study on rules and...
Transparency Mechanism    Model   Implementing Institution      Oil/Gas Transparency Team- Multi-stakeholders (Local Gov...
Membership and Funding   Member of Oil/Gas Transparency Team in Blora    district consist of 20 person from various stake...
Team Main Duty(As mandated in Bupati regulation)Article 5: Duties and FunctionI.   Formulate working agenda and implement ...
Work Plan    Work Meeting conduct every once a year to formulate Work     Plan for the next one year    Sample of work p...
Transparency’s WorkingMechanism   Transparency Mechanism:       Data collection:           Every related institution an...
Transparancy Mechanism          Companies     Related Local                         Govt. Unit     Central Govt.-Collectin...
Achievements of Transparency Team|2011-2012    2012:      Publication  of Information: Data on DBH, Old       Well, team...
Achievements of Transparency Team|2011-20121. Policy advocacy for oil/gas DBH in Cepu Block   Considering option to initi...
Lesson Learn   Building trust       Trust between stakeholders – main key       Need approaches and process in order fo...
Challenges   Time needed to encourage the government to be transparent in revenue    sharing/DBH       In the reconcilit...
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1 transparency mechanism (english)

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1 transparency mechanism (english)

  1. 1. LOCAL INNOVATION :OIL/GAS TRANSPARENCY MECHANISMBLORA DISTRICT
  2. 2. LOCAL INNOVATION :OIL/GAS TRANSPARENCY MECHANISM BLORA DISTRICT Jakarta, May 23rd 2012
  3. 3. Basic Problem Revenue Sharing Mechanism:  A mere socialization  Local Govt. do not have the necessary data for calculating revenue  Production data (update real time production)  cost recovery per oil/gas block  Oil/gas deposits/reserve Field development data (Example: PoD and WP&B) Corporate Social Responsibility  Lack of coordination in CSR-CD implementation (local govt. only receive reports after the implementation is done) Environmental Impact  Lack of socialization & simulation over environmental impact treatment
  4. 4. Objectives of Transparency Mechanism  To make transparent of information on revenue, CSR-Comdev and information on mitigation and environmental impact of oil/gas mining  To build dialog and constructive multi- stakeholders mediation  Provide input on data and information for local development planning and budgeting
  5. 5. Stages of Process  Study  Study on local problems related to revenue, CSR and environment  Study on rules and regulations  Research on oil/gas revenue flow and transparency aliran penerimaan dan transparansi Migas  Model Development  Multi-stakeholders discussion: formulating model/transparency mechanism  Agreed upon formulated model  Legal Drafting in local level  Advocacy and campaign  Local regulations advocacy  Seminar, workshop, media campaign, and sharing lesson learn  Implementation and Institusionalization  Formation of Transparency Team (Regulation from Head of Municipal/Bupati)  Budget advocacy for Transparency Team  Working meeting of Transparency Team  Socialization and Publication  Facilitating over local issues (PPGJ, Old Well, CSR, etc)  Advocacy to Central Government
  6. 6. Transparency Mechanism Model Implementing Institution  Oil/Gas Transparency Team- Multi-stakeholders (Local Govt, Company, Civil Society) Legal Based  Head of Municipal Regulation (Peraturan Bupati) No. 65/2010 Type of information to be made transparent :  Revenue Information  Social/Environment Information  CSR Information Funding  Local Bugdet (APBD) and other legal funding Working mechanism: Sosialization and Information publication; Multi- stakeholders Dialog; Policy Advocacy to central govt.; conduct studies /or forming working group
  7. 7. Membership and Funding Member of Oil/Gas Transparency Team in Blora district consist of 20 person from various stakeholders Selected stakeholder mostly invovled in the process since the very beginning Involved Stakeholder:  Executive (Assistant II, Local Development Planning Body/Bappeda, Environment Office/Dinas LH, Energy and Resource Office/Dinas ESDM, Law Section, Economy Section)  Legislative (Commission B DPRD)  NGO  Media  Mining Society Group  Association of Mining Workers  Local Companies
  8. 8. Team Main Duty(As mandated in Bupati regulation)Article 5: Duties and FunctionI. Formulate working agenda and implement extractive industry transparency mechanismII. Conduct strategic studies and formulate policy recommendation to related stakeholdersIII. Conduct assessment, socialization and publication to the society, working result , and data of extractive industry
  9. 9. Work Plan Work Meeting conduct every once a year to formulate Work Plan for the next one year Sample of work plan from Transparency Team in Blora (2012):1. Build Revenue Working Group and CSR-Environment working group--> to focus team’s work2. Revenue Working Group: to continue Blora’s revenue sharing/DBH advocacy (Blora do not receive DBH from Cepu block since DBH sharing based on the location of the mouth the well located in Bojonegoro CSR & Environment working group: to support trasnparency and the improvement of environment management and CSR by companies1. To agreed upon tranparency mechanism that has not been regulate yet under the Bupati regulation
  10. 10. Transparency’s WorkingMechanism Transparency Mechanism:  Data collection:  Every related institution and companies provide data to transparency team every quarter  Create medium for socialization: leaflet and media release  To be published per quarter  Content of publication materials: Activity report and Tranparency Team Achievements, Data Lifting, Realization of oil/gas revenue sharing/DBH, Realization of PI revenue sharing, oil/gas tax, Data on old well management, Data on CSR by oil/gas companies
  11. 11. Transparancy Mechanism Companies Related Local Govt. Unit Central Govt.-Collecting Data Transparen-Analyzing Data cy Team-Formulatinginformation Public/Society
  12. 12. Achievements of Transparency Team|2011-2012  2012:  Publication of Information: Data on DBH, Old Well, team’s working result, budgeting, in the form of leaflet and media release  Workforce mediation:  Mediation between citizens, companies and local govt. due to citizens complaint over Pertamina project PPGJ in Sumber village, Kradenan  Advocacy on Cepu block oil/gas DBH to central government (wich was still consider unfair by Blora)
  13. 13. Achievements of Transparency Team|2011-20121. Policy advocacy for oil/gas DBH in Cepu Block  Considering option to initiate Letter of Joint Agreement/SKB from 3 ministries to give DBH to Blora; has been discussed with the three ministries (ESDM, Keuangan dan Dalam Negeri)2. Actively involved in Judicial Review of UU 33 2004 about Financial Balance (becomes expert witness)3. Mediator between citizen and companies  Facilitating agreement to resolve problem as stated in Berita Acara/BA. BA will serve as reference document for parties during the
  14. 14. Lesson Learn Building trust  Trust between stakeholders – main key  Need approaches and process in order for society, companies, and local government to sit together and to agreed upon a joint initiative.  Transparency and ‘beyond transparency’  Transparancy trigger the improvement of performance of the mining companies—certain intervention from the local govt. and the society with specific institution and organized work  Transparency itself isn’t enough, start to conduct mediation Innovation and Institutionalization  Building model phase- the role of champion (from each parties) is vital  Next important stage– institutionalization within the system (perbub/Bupati regulation, detail implementation rules, local budget for funding, mechanism for monitoring performance, etc)
  15. 15. Challenges Time needed to encourage the government to be transparent in revenue sharing/DBH  In the reconcilitaion of DBH today, there is aggregate information on cost recovery The involvement of contractor (KKKS) in the Transparency Team is not formal yet  Internal bureaucracy issues and interpretation of law product  KKKS was an active obervant Change of actors- the position within companies and government often change, resulting in certain process during the changing of team member Policy improvement needed:  Encouraging transparency mechanism to have stronger legal based (perda)  Encouraging the revision of oil/gas regulation so the local govt. can have maximum involvement in managing oil/gas The need to replicate the mechanism to other resource-rich region
  16. 16. Terima Kasih Thank You

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