Transparancyof Extractive Industry in Indonesia - Ridaya Laodengkowe

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extractive Indonesia, publish what you pay, grupo faro, transparency extractive, transparency ecuador, transparencia petrolera, transparencia minera, ridaya,

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Transparancyof Extractive Industry in Indonesia - Ridaya Laodengkowe

  1. 1. Ridaya LaodengkoweCoordinator, National Coalition Publish What You Pay Indonesia
  2. 2. 2
  3. 3.  Capital: Jakarta Provinces: 33  490 regencies/municipalities Total Area: 1,919,440.00 sq km (741,099.93 sq mi, almost three times the size of Texas) Population 237.556.363 (PS 2010), Estimated Population in 2050: 337,807,011 Languages Bahasa Indonesia (official, modified form of Malay) GDP (2010) $ 672,450 million, Tax Ratio 11,9 % (2010) Natural Resources petroleum, coal, copper, gold, tin, nickel, bauxit 3
  4. 4.  National Revenue 2011 (estimate): US $ 1.100 billion GDP composition by sector: – Agriculture: 14,4% – Industry: 48,1% (including petroleum and mining) – Services: 37,5% Oil production: 970,000 bbl/day (2011 estimated), last year (2011) targeted 965 but only 947 in realisation Natural gas production: 56 billion cum (2007 estimate) Indonesia is a former member of OPEC (until 2008) Currently Indonesia is a net oil importer (consumes around 1,2 million bopd), but oil and gas is still one of the major export commodity 4
  5. 5. Resources Oil 86,9 billion barrel Gas 384,7 TCF Coal Bed Methane (CBM) 453,30 TCF Coal 104,76 billion ton Nickel 1,9 billion ton Copper 68,96 million ton Bauksit 648,88 million tonSource: MENR, February 2009 5
  6. 6. Annual Revenue (in million USD) Revenue 2004 2005 2006 2007 20081. Oil & Gas Revenue 12,18 14,26 21,02 20,53 26,352. Mining Revenue 1,01 1,82 3,27 4,11 3,66 a. Tax 0,72 1,33 2,54 3,15 2,62 b. Non-tax 0,29 0,49 0,73 0,96 1,053. Others revenue 0,02 0,03 0,07 0,14 0,10TOTAL 13,21 16,11 24,36 24,77 30,12Total State Revenue 45,37 51,28 72,28 77,92 83,69% contribution of the sector 29,1% 31,4% 36,1% 30,2% 36,0%Exchange rate (Rupiah/US$) 8.884 9.657 9.119 9.093 11.500ICP (US$/barel) 37,17 51,84 63,86 69,69 103,31Lifting (thousand bopd) 1.036 1.003 957 899 931 6
  7. 7.  Resource rich areas tend to have history of vertical conflict (Aceh, Papua) • Unsatifaction with revenue sharing ---- Greater autonomy status receive more natural resources revenue transfer from central government Resource rich areas tend to have high poverty rate Excess of decentralisation (since 2000): irresponsible concession awarding by local governments (KP; 7.000): no competitive bidding process, no appropriate regulatory institutions, unclear revenue stream History of violence and human rights violation in resource rich areas “Local resource curse”: social-economic problems surrounding mining projects, environmental damages, public facilities disturbances (road, bridges), air pollution 7
  8. 8.  Weak environmental standard applied Tax evasion politico business connection, corruption in tax institutions Lack of transparency Revenue data available in aggregated, difficult even to reconcile sub-data in National Budget Contracts of mining are available by request, not PSC documents (including POD, WP and Budget) Different view among Ministries: Energy and Mineral Resources versus Ministry of Finance and Ministry of Environment 8
  9. 9. ..... Some progress 9
  10. 10.  Public financial management reform Access to public information Law Extractive Industry Transparency Initiative (EITI) adoption (2010) Mining Law Number 4/2009 --- put some transparency measures Environment Protection and Management Law Preparation of Petroleum Law Revision
  11. 11.  Put more transparency in budget process and management There is space for public engagement, but very limited Audit of government financial statements (agency by agency) are disclouse Information of extractive revenue transfer are available, though questions remain Limited disclousure on (country) revenue from extractive industry
  12. 12.  Initiated by the House of Representative (DPR) Government agencies mostly do n ot realize the significant of the law CSOs have been using this for demanding document related to extractive industry Become the legal basis for adopting EITI
  13. 13.  Government of Indonesia took 2,5 years to come up with Presidential Decree to adopt EITI ---- extensive coordinating works inside government Become candidate country on December 20, 2010 ------ 2 years to achieve compliance country Bring uniqueness in EITI implementing countries: • Oil and gas • Mining • Sub-national Promote EITI in regional level ---- ASEAN (Association of South East Asia Nations, 10 countries)
  14. 14.  Growing demand for specific laws Limitedcapacity of the House‟s members and their staff Tendency to „compete‟ with government whose staff are more experienced, or more chance to hire independent experts
  15. 15.  Awareness of the important to draw reform agenda in public finance management (MoF): efficiency, uplift Indonesia position in global arena Awareness of the important to response to new investment challenges (MoF, MENR) There are growing concern internationally on the important of transparency and accountability Need to balance decentralisation with „ACCOUNTABILITY‟ (MoF, MOHA)

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