Simon Sembiring, Senior Adviser, PT Indika Energy - Navigating indonesia’s mining divestment rules and obligations
 

Simon Sembiring, Senior Adviser, PT Indika Energy - Navigating indonesia’s mining divestment rules and obligations

on

  • 852 views

Simon Sembiring, Senior Adviser, PT Indika Energy delivered the presentation at IMM’s 2014 Kalimantan Coal Conference. ...

Simon Sembiring, Senior Adviser, PT Indika Energy delivered the presentation at IMM’s 2014 Kalimantan Coal Conference.

The IMM’s Kalimantan Coal Conference brings together 120+ senior executives, decision makers from government, mining, infrastructure, shipping and supply sectors to discuss new policies and strategies for tackling the current and emerging issues within the burgeoning Kalimantan coal sector.

For more information about the event, please visit: http://www.immevents.com/kalicoalconference13

Statistics

Views

Total Views
852
Views on SlideShare
672
Embed Views
180

Actions

Likes
0
Downloads
9
Comments
0

1 Embed 180

http://www.immevents.com 180

Accessibility

Categories

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

    Simon Sembiring, Senior Adviser, PT Indika Energy - Navigating indonesia’s mining divestment rules and obligations Simon Sembiring, Senior Adviser, PT Indika Energy - Navigating indonesia’s mining divestment rules and obligations Presentation Transcript

    • Presented by : Simon F. Sembiring Kalimantan Coal Conference 2 – 5 September 2013 Balikpapan, Indonesia
    • DIVESMENT RULES & OBLIGATIONS A.  Basic  Foreign  Investment  (FI)  Doing  Business  &  Mining  in  Indonesia:     §  Foreign  investment  law  No.  11/1967.   §  Mining  law  No.  11/1967   §  Investment  law  No.  25  /2007   §  Mineral  &  coal  mining  law  No.  4/2009.   B.  Rules  For  Divestment  :   1.  Decree  of  Head  of  “Investment  CoordinaLng  Board”  (1967-­‐1991).   §  Decree  No.  5/1987;  Jo  :  Decree  No.  17/1987.   §  Decree  No.  16/1989;  Jo  :  Decree  No.  17/1991.   2.  Government  RegulaLon  No.  50/1993                Government  RegulaLon  No.  20/1994   3.  Mineral  &  coal  mining  law  No.  4/2009  ArLcle  112.   4.  Government  RegulaLon  No.  23/2012  Jo  No.  24/2012  (arLcle  97-­‐98)   C.  ObjecLve  :   §  To  enhance  the  naLonal  capability  to  doing  “good  mining  business”   §  To  increase  the  benefit  of  mining  operaLon  for  the  state  as  well  as  for  the  naLonal  welfare.  
    • NEW SCHEME OF DIVESTMENT 1.  The  IUP  &  IUPK  Holder  (in  terms  of  foreign  investment  in  mining)  a_er  5   year  in  “producLon  operaLon”  at  least  the  share  of  naLonal  party(s)  will  be.   §  6th  years  anniversary                  20  %   §  7th  years  anniversary                  30  %  (+10%)   §  8th  years  anniversary                  37  %  (+7%)   §  9th  years  anniversary                  44  %  (+7%)   §  10th  years  anniversary              51  %  (+7%)     2.  Divestment  will  be  offer  to  :  government,  provincial  &  district  government     state  own  company  (SOC);  regional  own  company  (ROC),  privet  company.     4.  The  offer  to  SOC  &  ROC  or  private  company  with  “tendering  process”  
    • 4.  Time  table  of  share  offer  :                                        0                                                              Days                                                        60                                90                                                            0        -­‐  Gov,  Prov  &  Dist  Gov,  SOC  &  ROC                Private                                                                                                                                                                                                                  NaLonal                              Payment                        90  days  a_er  acceptance                    Note  :  O  =  Offering                                       5.  In  terms  of  increasing  the  company  share,  Indonesia  share  well  not  be  deluted.    
    • DIVESMENT IMPLEMENTATION BAFORE LAW NO. 4/2009 1.  COW  PT  INCO  signed  27  July  1968  :   §  To  offer  2%  annually  since  1  year  commercial  producLon.   §  Already  done  to  the  amount  of  20%  at  capital  market  in  Indonesia.     2.  COW  PT  NEWMOUNT  Nusa  Tenggara  :   §  44  %  own  by  naLonal   §  24%  by  divestment  process   §  the  rest  7%  on  going  process.     3.  CCOW  :  All  the  companies  of  1st  generaLon  :   §  Divestment  already  done  :  51%  to  Indonesia  parLes.  
    • THE EARLY RESPOND OF INVESTOR(S) WITH NEW REGULATIONS : 1.  For  COW  &  CCOW  no  negaLve  respond,  due  to  stated  in  their  own  contract  as   “obligaLon”  for  the  Indonesian  NaLonal  Interest.     3.  For  IUP  (  for  KP)  specially  in  coal  :   §  Complaining  the  new  regulaLon.   §  Not  very  clear  the  process,  the  price  of  divestment  share.   §  It  is  not  apply  to  KP  holder  before,  and  why  changes  the  rules  dramaLcally  to   IUP  holder???   §  Mostly  the  foreign  investment  “bought”  the  share  from  naLonal  Party  who   have  IUP  and  rise  the  quesLon  :    why  should  divested???   §  In  terms  of  IUP,    mostly  are  not  own  the  “huge”  or  big  amount  of  reserves    or   huge  area  (25.000  Ha).   §  It  create  the  worst  investment  climate     3.  Conclusion  :  Government  (central  &  local)  are  not  providing  the  good  and  beker   explanaLon  concerning  the  new  regulaLon  for  “divestment  obligaLon  for   foreign  investor(s)”  
    • CLARIFICATIONS 1.  Divestment  already  implemented  to  foreign  share  holder  since  1967  in  mining   business.   2.  The  involvement  of  “foreign  investor”  in  doing  business  mining  in  Indonesia   before  new  mining  law  No.  4/2009  should  be  “directly  agreement  with   government:  COW,  CCOW.   3.  In  terms  of  KP  (mining  authority)  only  “naLonal  party”  allowed  to  operated.   4.  Based  on  new  mining  law  No.  4/2009,  all  the  mining  operaLon  based  on   “license”.   5.  In  terms  of  IUP  OR  IUPK  holding,  whose  share  are  owned  by  foreigners  a_er  5   years  producLon  is  obligated  to  undertake  a  divestment  of  share  to  the   Indonesia  …  (arLcle  112,  law  No.4/2009).   6.  The  scheme  as  menLoned  before  is  regulated  on  government  regulaLon  No.   22/2002.   7.  The  price  of  share  should  be  the  “market  price”,  and  already  implemented  to   COW  and  CCOW.  No  rejecLon  at  all.    
    • WHAT IS THE IMPACT OF DIVESTMENT??? 1.  In  terms  of  side  effect  to  “mining  infrastructure”  very  limited.   2.  To  the  investor  (s)  possibly,  but  insignificant  due  to  “miss  percepLon  and  lack  of   clear  &  clean  informaLon  from  the  government;     3.  To  the  naLonal  party  gives  the  very  posiLve  impact  in  term  of.   §  Enhance  their  capability  doing  business  globally.   §  Enhance  the  business  environment  to  the  level  of  professional  mining   execuLon.   §  To  reduce  the  “dirty  business”  in  mining  for  both  naLonal  and  foreigners.  
    • CONCLUSION 1.  Divestment  obligaLon  for  foreign  share  holder  in  Indonesia  is  not  “a  new  terms”,   already  exist  since  law  No.  1/1967  and  law  No.  11/1967  and  its  implementaLons.     3.  The  implementaLon  of  divestment  for  both  COW  and  CCOW  were  doing  well.     5.  The  mining  operaLon  a_er  law  No.  4/2009,  will  based  on  licensee  system.  Where  the   exisLng  COW  &  CCOW  will  be  honored  unLl  the  and  of  contract.  The  substances  of   the  COW  &  CCOW  sLll  on  the  “renegoLate”  process.     7.  If  IUP  and  IUPK  issued  in  terms  of  foreign  company,  a_er  5  years  commercial  the   producLon,  should  be  divest/annually.    Then  the  total  Indonesia  share  will  be  51%.   8.  The  price  of  the  divestment  share  based  on  “market  price”.