Eiti transparency


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The talking points stressed that upstream oil and gas business in Indonesia already have some set of robust management and reporting mechanism, including within PSC alone. Yet, what EITI should focus, is on related party transaction among the HQ and subsidiaries - and let it be available to public

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Eiti transparency

  1. 1. Benefits for Government, Companies and Civil Societies Sampe L. Purba skkmigas Presented in EITI Transparency International – Jakarta, 2 Dec. 2013 1 1
  2. 2. ISUES INSTRUMENTAL INPUT • National Paradigm • Laws and Regulations 2009 © BPMIGAS – All rights reserved National Economy significantly supported by Oil and Gas Industry Oil and Gas upstream governan ce Civil Society awareness and demands towards transparency Administrative and Contractual binding Governance Asymetric information on related-party transaction HQ – Subsidiaries Conception Policy Strategy Effort Expected Upstream Governance Optimum benefit on Energy Management • Strategic Environment • Opportunity Challenge ENVIRONMENTAL INPUT 2
  3. 3. Points to note :  Oil and Gas Business is a significant driver to National 2009 © BPMIGAS – All rights reserved economy {national budget, energy security, national capacity enhancement, technology and human resources development}  Regulatory framework governed under :  Administrative Law  Public Law  Private – Contractual Law • The rise of openness and democracy to broaden the so- called consent parties beyond the relevant stakeholders 3 3
  4. 4. Governance Structure of PSC STRUCTURE GOVERNANCE LAW of PSC National Constitution 1945 Ch.5 (1),(2),4(5) Ps 33 (2),(3) 2009 © BPMIGAS – All rights reserved Law No. 22 of 2001 PD 9/ 2013 GR 35 of 2004 PRODUCTION SHARING CONTRACT 4 4
  5. 5. Control Mechanism in Upstream Oil and Gas Sector 2009 © BPMIGAS – All rights reserved UKP4 POD WP&B AFE Parliamen t Pre-Audit Supreme State Auditor Current Audit Corruption Eradication Commission Post Audit Relevant Institution SKK Migas BPK, BPKP, Tax Authority Public Auditor Home Office Auditor Production Sharing Contracts 5 5
  6. 6. INTERNAL GOVERNANCE WITHIN PSC Head Quarters Home Gov’t World wide Portfolio Benchmarking Personal and Group Performance Evaluation Shareholders Audit IRS : Taxation Security Exchange Commission 2009 © BPMIGAS – All rights reserved Commercial Stake holders Partners Covenants with Financial Institution Industrial Good Engineering Practices Association and Interest Group Non Operator Audit Project Based Approval Annual Work Program and Budget Approval 6
  7. 7. Concluding Remarks  Oil and Gas management reflects the Government sovereignty and authority to the benefit of the people  Accountability flows through the national system  Transparency has to be equally balanced imposed to 2009 © BPMIGAS – All rights reserved the multinational companies operating in Indonesia  Related party event within HQ and subsidiaries on the underlying transaction charged to Indonesia need to be cautiously scrutinized by EITI 7 7
  8. 8. Sampe L. Purba sampepurba@gmail.com; slpurba@skkmigas.go.id 8 8