This document discusses contract transparency in the extractive industries according to the 2019 EITI Standard. It provides background on EITI and how contract transparency has developed over time in the EITI standards from 2013 to 2019. The 2019 standard now requires EITI implementing countries, including Indonesia, to publish all contracts issued after 2021 and encourages publishing existing contracts. However, Indonesia has yet to fully comply. The document outlines the roles EITI can play in facilitating greater contract transparency at the national level through discussion, publishing contracts, and influencing regulatory changes.

1. 1

2. 2
A. Introduction
1) Article 33 of the 1945 Constitution
2) Extractive Industries Transparency Initiative, EITI Standard 2019, https://eiti.org/news/eitilaunches-2019-eiti-standard
3) xtractive Industries transparency Initiative, EITI Standard 2016 2.4, see also EITI 2013 2013 point 1.5
In Indonesia, natural resources including oil and
gas, mineral and coal mining are controlled by the
state and managed for the greatest prosperity
of the people1
. This means that the country and
its citizens are the true owners of the natural re-
source wealth. While, the utilization is represented
by the government so that it is managed as well
as possible for the purpose of people’s welfare in
accordance with the stipulated provisions. In re-
alizing the benefits of welfare, transparency and
accountability in the management of natural re-
sources are absolutely essential.
Extractive Industries Transparency Initiatives
(EITI) is a global initiative that promotes trans-
parency and accountability in extractive industry
governance, especially for EITI Compliance Coun-
try and Indonesia is one of them. Until 2020, there
are 52 countries that are incorporated as EITI im-
plementing countries. EITI Implementing countries
recognize the importance of better governance2
although not all implementing countries comply
with the provisions of the EITI standard.
Transparency and accountability that are en-
couraged and agreed upon by EITI implementing
countries include aspects: (1) Multi-stakeholder
supervision, (2) Legal and institutional frameworks
including licensing and contract transparency, (3)
Transparency in exploration and production as-
pects, (4) Transparency of sources of income and
taxes, (5) Transparency of allocation / use of in-
come, (6) Transparency of social and economic
expenditure from extractive industries, and (7) EITI
results and impacts.
One of the global norms that is getting stronger
and agreed upon in the 2019 EITI standard is the
publication of contract documents or licensing
documents in the extractive industry sector. EITI
standards have encouraged contract and permit
disclosure since the 2013 and 2016 EITI standards
were agreed by implementing countries. However,
the disclosure of contracts and permits meant in
the 2013 and 2016 EITI standards is still option-
al3
or not required. Only in 2019, at the EITI Global
conference in Paris, it was agreed that extractive
sector contracts and permits must be opened.
This means, all EITI implementing countries in-
cluding Indonesia are required to carry out this
mandate, and will be taken into account in evalu-
ating the progress of implementing EITI in the next
global forum. Therefore this EITI instrument is an
opportunity to encourage the acceleration of the
implementation of contract and permit disclosure
policies in Indonesia.

3. 3
Graph 1: Progress of Contract and Permit Disclosure Practices
in EITI Implementing Countries in 2020
Source: https://eiti.org/blog/taking-stock-of-contract-transparency
4) EITI Indonesia Annual Report 2017
5) Robert Pitman and Rani Febrianti, Why Mining Agreements in Indonesia Must Be Opened to the Public, Natural Resource Gover-
nace Institute, 2019. See also Contract of Work between the Government of the Republic of Indonesia and PT Freeport Indonesia,
www.sec.gov/Archives/edgar/data/831259/ 000083125901500022 / exh101.txt
Although it has become an EITI implementing
country, the Government of Indonesia has not yet
opened the contracts and permits to the public for
various reasons4
. In fact, the encouragement of
contract disclosure policies is not new. The prac-
tice of contract and permits disclosure in extrac-
tive industry has been carried out by many coun-
tries and continues to experience development.
According to Natural Resource Goverment Initia-
tive (NRGI) 2020 data, as of June 2020, as many
as 47 countries in the world have opened part of
extractive industry contracts, of which 31 are EITI
implementing countries. In addition, there are 27
countries that have included contract disclosure in
their country’s laws and regulations. In fact, there
are not a few companies that support contract
disclosure, one of which is the Freeport company
which has opened contracts in full (full document)
for their companies operating in Indonesia5
.

4. 4
B. Contract Transparency
in 2019 EITI Standard
1. Development of Contract Transparency in EITI Standards
6) Hubert, Don and Rob Pitman. Past the Tipping Point? Contract Disclosure within EITI, 11. Natural Resource Governance Institute,
2017.
7) See the 2013 EITI Indonesia civil society representative letter (Faisal Bashri, Maryati Abdullah, Wasingatu Zakiyah) https://pwypin-
donesia.org/id/rekomend-OPE-share- repair- standard-improvement-eiti-global-related-transparency-contract-contract/
8) 2013 EITI Standards section 12.
9) EITI Standard 2016, section 2.4
The publication of contract documents in EITI be-
gan to be initiated in 2012 and began to be consult-
ed with multi-stakeholder groups (MSG) in EITI im-
plementing countries starting in early 2013. Initially,
not all implementing countries supported contract
transparency initiatives included in the EITI stand-
ard6
. In contract transparency consultations, three
options were produced, namely: (1) requiring the
opening of the contract to the public, (2) requiring
the contract transparency with the exception and
(3) encouraging the contract transparency to the
public (not requiring). Based on the three options,
of the 20 countries involved in this consultation, 11
countries supported that contracts transparency
must be implemented and 6 other countries chose
the option to require the contract transparency
with some exceptions. Meanwhile, representatives
of civil society who sit on EITI Indonesia and on
the global EITI council firmly support options that
require contract transparency to the public.7
The variety of arguments from the MSG against the
perspective of disclosed or closed the contracts
both from companies and some governments, in
the end, aspect of contract transparency is in-
cluded in the EITI standard 20138
. However, the
option chosen is only to “encourage” the contract
transparency , which means that the fulfillment of
this standard is optional (not required). Whereas,
for changes in the EITI standard 2016, the prereq-
uisites in the scope of contract information publi-
cation have also not changed. In the EITI standard
2016 point 2.4, EITI implementing countries are
still encouraged to open any contracts and per-
mits they have, which are relevant to extractive
industries9
.
Referring to the dynamics at the global level, ef-
forts to contracts and permits transparency de-
velop more rapidly. As described in the previous
section, more than half of the EITI implementing
countries have begun to open their contracts and
permits to public. Contract transparency prac-
tices is also carried out in countries that are not
implementing EITI. Even quoted from various lit-
eracy shows that many countries and companies
feel the benefits by opening contracts. From the
company aspect, for example Total company in
Myanmar, the contract holder in the Yadana gas
project, which is the most productive gas field in

5. 5
Myanmar to date. Total said that opening contract
documents did not have a direct impact on oper-
ations in Myanmar and instead assisted the com-
pany in building confidence10
. These conditions
become one of the strengthens of EITI to increase
10) Sebastian Sahla, Hosana Chay and Rob Pitman, How and Why the Myanmar Government Should Publish Oil and Mining Con-
tracts, Natural Resource Governance Institute, 2019, p. 5, see also Sebastian Sahla, “Contract Transparency is Good for Business in
Myanmar, Total Said,” The Myanmar Times,
standards for member countries in contract trans-
parancy. In the EITI standard 2019, the contracts
transparency becomes an obligation for the imple-
menting countries, including Indonesia.
Diagram 1: Progress of Arrangement of Opening Contracts in EITI StandardsI
Source: EITI Standard Documents 2013,2016 & 2019, processed by author
2. Contracts Transparency in EITI Standards 2019
In 2019 EITI has issued a new standard, which is a
prerequisite for contracts and permits transparen-
cy to become one of the updated standards. EITI
Standard 2019 requires implementing countries to
publish contracts and permits granted or amended
after January 1, 2021. EITI also encourages imple-
menting countries to publish contract and permit
documents that are given or amended before Jan-
uary 1, 2019. Publication of contracts and permits
covering exploration and exploitation activities oil
and gas and minerals must also be included in the
EITI work plan from 2020 onwards.
The contract and licensing publication policies
governing the exploration and exploitation of oil,
gas and mineral which must be documented by
the implementing country of the EITI include: (1)
an explanation of whether there are policies and
regulations (Laws) that mandate opening or pro-
hibiting contracts and permits, (2) explain the pol-
icy of publication of contracts and permits issued,
(3) Document the MSG EITI discussion process
relating to contract transparency, (4) document
changes that are relevant to the contracts and
permits transparency both planned and ongoing, (
5) submit a list of all contracts and permits that are
EITI STANDAR 2013
1. To encourage
2. All contracts and permits
3. Full text with supporting
document and transfor-
mation
EITI STANDARD 2016
1. To encourage
2. All contracts and permits
3. Full text with supporting
document and
EITI STANDAR 2019
1. Requiring/obligate for
open contracting on Janu-
ary 1, 2021
2. To encourage open con-
tracting before 2021
3. Full text with supporting
document and transfor-
mation
4. Requirement integrated
into EITI’s work plan

6. 6
still active and provide an explanation of which is
available to the public and which is not, (6) Explain
the published contracts and permits complete
with references where the documents are pub-
lished, (7) Provide an explanation related to what
obstacles (legal or technical) if the contract and
permit documents are not published.
Contracts and permits are important part of the
legal framework that contains provisions on the
rights and obligations of the parties. In general,
matters that are regulated include work obliga-
tions, fiscal requirements, social and environ-
mental provisions, safety standards, local content
11) Source: ESDM accessed from https://modi.minerba.esdm.go.id/p leaders/perizinan?t=2020
requirements and others. In Indonesia, there are
several types of contracts or permits in the oil and
gas and mineral mining sectors in accordance with
applicable laws and regulations. In the upstream
oil and gas sector, the management contract is
through a Production Sharing Contract (PSC). The
PSC regulates the production sharing scheme
between the government as the owner and right
holder of oil and gas resources and the imple-
menting contractor (KKKS). Besides PSC, other
schemes that are put in place are the Joint Oper-
ation Body (JOB) and Gross Split which are based
on the division of calculations on gross production
results and there is no cost recovery mechanism.
Graph 2: Classification of Oil and Gas Management Permits in Indonesia
Source: Ministry of Energy and Mineral Resources RI 2020, processed by the author
In the mineral and coal mining sector also ap-
plies several types of contracts / permits. At least,
there are 7 types of mining licenses and contracts
that apply in Indonesia, namely: Contract of Work
(KK), Mining Business License (IUP), Coal Mining
Business Work Agreement (PKP2B), Special Min-
ing Business License (IUPK), Community Mining
License (IPR), Mining Services Business License
(IUJP),Special IUP-OP for processing and refining
and special IUP-OP for transportation and sales11
.

7. 7
Graph 3: Classification of Mineral and Coal Mining Licenses in Indonesia
Source: Ministry of Energy and Mineral Resources RI 2020, processed by the author
Based on the EITI Standards 2019, the Govern-
ment of Indonesia is obliged to publish all contract
and licensing information issued after January 1,
2021, and encourage all licenses or contracts that
are still in effect today to be made public.
In the EITI Indonesia Report 2017, the Government
stated that basically the general provisions of
extractive sector contracts have been published
through the Ministry of Energy and Mineral Re-
sources website, which includes company profiles,
company owners, work areas, and others. Howev-
er, this does not meet the provisions of the EITI
standard 2019 section 2.4.
The definition of contract and licensing publica-
tions referred to in the 2019 EITI standard 2.4,
especially points D and E clearly states that the
contract transparancy includes the full text of the
concession contract which includes production
sharing contracts and other agreements given or
made by the government governing oil and gas
exploitation and mineral resources, including the
full text of the attachments, as well as the full text
of any changes to the contract documents. Mean-
while, permits that must be published are full text
of permits, lease agreements, ownership informa-
tion or permits granted by the government to com-
panies / individuals in managing oil and gas and
mineral resources, complete text of attachments,
as well as full text of any changes to documents
permission.

8. 8
3. The Role of EITI in Facilitating Contract Transparency
Experience in several implementing countries, EITI
has an important role in facilitating the contract
transparency in the extractive sector. The Natural
Resource Governance Institute (NRGI) study men-
tions some of the roles of EITI in each implement-
ing country in conducting or facilitating contract
disclosure, namely:
(1) Discussion and Debate Forums. In some EITI
implementing countries, discussion forums, dia-
logues and debates at the national EITI MSG forum
have succeeded in encouraging the implemen-
tation of contract transparency. As in Mongolia,
the EITI working group succeeded in removing
the confidentiality clause of contract documents.
Other countries such as Myanmar, through the
EITI discussion forum have succeeded in including
contract transparency as one of the recommenda-
tions in their first EITI report.
(2) Facilitating the Opening of Contract Docu-
ments, in some countries contract transparen-
cy is carried out through the EITI process. As in
the Philippines, stakeholders use EITI as a forum
to encourage National Commission for Indigenous
Peoples to disclose company contracts to indige-
nous people / communities around the mine in or-
der to monitor company compliance with commit-
ments agreed in the form of social programs and
royalty payments. In Azerbaijan, the national EITI
secretariat is involved in encouraging companies
to agree to disclose contracts. The same practice
also occurs in several other countries such as in
Timor-Leste and Malawi.
(3) Contract Publication Room, in other coun-
tries, the EITI forum has a role in publishing con-
tract documents on their EITI website. As Azer-
baijan, Chad, Republic of the Congo, Democratic
Republic of the Congo (DRC), Liberia, Philippines
and Senegal. Even Philippines created an EITI con-
tract portal specifically in collaboration with re-
sourcecontracts.org. In 2015, Philippines launch-
es national website to issue contracts in the open
data format. There are 87 extractive sector con-
tracts, 44 main contracts and 43 supporting doc-
uments that have been opened by the Philippines.
(4) Regulatory Encouragement. EITI principles
and standards related to contract transparency
can be used as an accelerator in encouraging and
harmonizing the implementation of contract trans-
parency policies so as not to conflict with the laws
and regulations of each implementing country. As
a result, in Liberia, in the LEITI Law 2019, it was
stated that contract and licensing information in
the extractive industry sector was open to the
public. Furthermore, Tanzania also has an Extrac-
tive Industries Transparency Act issued in 2015,
which requires that all new concessions, contracts
and licenses must be made public.

9. 9
How about Indonesia? The EITI Indonesia Secre-
tariat has also played a role in encouraging the
government to open contracts and permits in the
extractive sector. Several things have been done
related to contract transparency12
, such as: open-
ing the main provisions of extractive sector con-
tracts in the EITI report 2015 Oil and gas Produc-
tion Sharing Contracts can be accessed at: http://
eiti.ekon.go.id/draft-kontrak-psc/ and for Contract
of work and PKP2B contained in appendix 2 of the
EITI Indonesia Report 2015. In addition, the EITI In-
donesia Secretariat has also facilitated a forum for
discussion related to contract transpaerncy with
relevant stakeholders including the Central Infor-
mation Commission, in which the Decision of the
Central Information Commission has stated that
information on oil and gas and mineral and coal
contracts is open. However, to date this has not
been followed up by the agencies that controlled
the document, namely the Ministry of Energy and
Mineral Resources (ESDM).
Civil society in Indonesia has also made a num-
ber of efforts in encouraging the government to
open contracts. One effort is to intensify discus-
sion / debate forums about opening contract doc-
uments in MSG forums13
. In addition, in order to
prove the government’s commitment in disclosure
of contract information, Yayasan The Center for
12) EITI Secretariat material, accessed from https://pwypindonesia.org/eiti-dan-from-contract-in-industri-extraction/
13) https://eiti-indonesia.id/secretariat/mendorong-key-kontrak-dan-perizinan-di-industri-ekstraktif/
Public Information Development (YP2IP) has also
accessed PT Freeport Indonesia, PT Kalimantan
Timur Prima Coal and PT Newmont Mining Cor-
poration work contract information. Not only that,
YP2PI also accessed PT Chevron Indonesia’s PSC
contract documents which are controlled by BP Oil
and gas (now SKK Oil and gas). Information Com-
mission through KIP Decree No. 197 / VI / KIP-PS-
MA / 2011 concerning Public Information Disputes
between the Public Information Development
Center Foundation and the Ministry of Energy and
Mineral Resources regarding contract documents
are declared open and inkrach. Likewise with the
information that is controlled by BP Oil and gas,
KIP through KIP ruling No. 356 / IX / KIP-PS-MA /
2011, which states that PSC contracts are partly
open information.
However, this encouragement has not yet suc-
ceeded in building awareness of the Indonesian
government to proactively open information as
practiced by other countries. Therefore, better
collaboration is needed between the government,
companies and civil society, by maximizing the role
of the EITI Indonesia secretariat in bridging the im-
plementation of extractive industry transparency,
including in the aspects of contractual openness
and licensing.

10. 10
4. EITI Guidelines for Implementing Contract Transparency
EITI has provided guidance containing steps that can be carried out by implementing countries in imple-
menting contract transparency and integrating in the EITI work plan14
. The steps that can be done are as
follows:
14) EITI International Secretariat, Checklist for integrating plans for contracts transparency in work plans, 2020
⁘⁘ Build Intensive Discourse Objectives for
Contract Transparency. MSG forum needs to
intensify discussions related to the purpose
of contract and permit disclosure as well as
various issues in the management of the ex-
tractive industries which emphasize contract
transparency as one of the solutions in improv-
ing the management of natural resources. This
is a step to equalize stakeholder perceptions
(government, companies, civil society).
⁘⁘ Stakeholder Engagement. it aims to build the
seriousness of the commitment of the actors in
contract transparency such as the Government
and the Company. Civil society needs to con-
tinue to push for stronger and more effective
advocacy such as access to more massive in-
formation and proving the benefits of contract
transparency for governments and companies.
In this case, experts are also needed as expert
judgment.
⁘⁘ Identification of all extractive industry con-
tracts. In planning the contract transparency,
it is necessary to carry out an inventory of con-
tracts and permits, including potential licens-
ing contracts that will be issued after January
1, 2021. In Indonesia, there are at least 189 PSC
contracts and 6,932 mineral and coal sector
permits that must be identified, including the
existence and acquisition of all these docu-
ments.
⁘⁘ Mapping the Conditions of Contact Trans-
parency and Conducting a Legal Review. The
legal review is important to be seen as an ef-
fort to contracts and permits transparency in
EITI implementing countries. Including map-
ping whether there are government and com-
pany initiatives that currently have voluntarily
opened contracts and permits they have. This
process has actually also been carried out in
Indonesia, discussions around the legal review
of contract transparency including the deci-
sions of the Informastion Commission, PN, Su-
preme Court. Openness in Indonesia is familiar
with the terms of the consequence test and
public interest test as regulated in Law Number
14 of 2008 on Public Information Disclosure.
This public consequence test can be used as a
way to ascertain whether there is information
except in the contract/permit document.
⁘⁘ Establish the Contract Transparency Meth-
od. Many countries practice contracts trans-
parency with different methods. Some of them
opened it via the resourcecontracts.org plat-
form as done by Sierra Leone, Philippines. Or

11. 11
specifically through a government website
as done by Ghana, Mexico, Timor Leste, or
through a company website.
⁘⁘ Increased Capacity in Utilizing Contracts
Transparency. The EITI Secretariat needs to
increase capacity for contract and licensing
information users. Because, opening the con-
tracts is not enough and is not the main goal
but rather how stakeholders can use the con-
tract documents and permits to encourage
improvements in the governance of extractive
industries.
⁘⁘ Carry out Contract Publications and Permits.
In accordance with the EITI standard 2019,
point 2.4, the disclosure of the contract and
permit referred to includes all the contents (full
text) including attachments, changes in the
contracts and permits relevant to exploitation
and exploration activities. For this reason, the
publication step that can be done is to iden-
tify and make a list of contracts published in
the agreed publication method. The things that
must be done are: identify what units or agen-
cies will carry out the publication of the con-
tract, as well as the preparation of regulations
or SOPs in the process of contract publication.
⁘⁘ Set Target Time and Resources. In prepara-
tion of EITI work plans including aspects of
contract transparency need to set time targets
in the implementation process. In addition, hu-
man resources and funding are also needed in
facilitating or financing contract transparency.
For this reason, MSG needs to build agree-
ments and develop timelines that are not sep-
arate in the EITI 2020 work plan document and
so on.

12. 12
C. Implementation Opportunities
& Challenges in Indonesia
Transparency and accountability in the manage-
ment of extractive industries absolutely must be
realized, to overcome the problems that arise in
the management of natural resources such as
corruption, conflict and environmental damage.
Implementation of contract and permit disclosure
policies is a must, in order to provide symmetrical
information between stakeholders, in this case the
government, companies, communities regarding
the exploration and exploitation activities of nat-
ural resources.
Implementation Opportunities
There are number of things that are likely to be driving factors the implementation of contract and licens-
ing transparency can be implemented in Indonesia, namely:
⁘⁘ First: Publication of contracts and licens-
ing “Being Necessary / Required” in the EITI
Standards 2019. Indonesia as an EITI member
country, of course, must carry out the man-
dates that become the EITI agreements and
standards. The necessity on contracts trans-
parency in the EITI standard 2019 should be
able to increase the impetus for the Indonesian
government to implement a policy on contract
transparency. There have been many good
examples of how EITI in several countries has
succeeded in encouraging contract transpar-
ency.
⁘⁘ Second: Publication of contracts and permits
is mandated by statutory regulations. In Ar-
ticle 11 paragraph (1) letter e of Law No. 14 of
2008 concerning Public Information Disclosure
(UU KIP) stipulates that public bodies are re-
quired to provide public agency agreement
documents with third parties. Then, in its de-
rivative regulation, namely Information Com-
mission Regulation No. 1 of 2010 concerning
Public Information Service Standards, in Article
13 paragraph (1) letter e emphasizes the ob-
ligation to publish the agreement documents
as regulated in UU KIP. The agreement doc-
ument certainly also includes contracts in the
extractive sector, contracts for procurement of
goods and services. Although, there are regu-
lations governing the closure of PSC contract
document information on oil and gas as stipu-
lated in Government Regulation No. 35 of 2004
concerning Upstream Oil and Gas Business
Activities, but these rules are very likely to be
reviewed.
⁘⁘ Third: Contracts and Licensing Disclosure
has been Declared as Open Information
based on the Decision of the Central and Re-
gional Information Commission. Refer to the

13. 13
results of the PYWP study15
that contract and
permit documents have been declared open
through the decision of the Central Informa-
tion Commission and the regional Information
Commission. In addition to the decision of the
information dispute between YP2IP that has
been mentioned in the previous section, Infor-
mation Commission of Riau Province has also
decided a dispute between Novrizon Burman
vs SKK Oil and gas in the Sumbagut region,
that the PSC contract document operating in
Riau is open information. Although finally the
decision of Information Commission of Riau
Province was annulled by the South Jakarta
District Court when SKK Oil and gas filed an
appeal. In addition, the community group Peo-
ple’s Coalition for the Right to Water (KRUHA)
vs. The DKI Jakarta Province PDAM is linked to
a copy of the Cooperation Agreement Contract
between PAM Jaya with PT Palyja and PT TPJ /
Aetra. Then also, the Institute for Research and
Application of Discourse vs. PT Blora Patragas
Hulu related to the agreement document be-
tween PT Blora Patragas Hulu and PT Anugrah
Bangun Sarana Jaya as a financial partner in
managing 2.1% of the Cepu Block participating
interest in shares owned by the Blora Regency
Government. The disclosure of licensing docu-
ments is also mandated by the East Kalimantan
Provincial Information Commission in the deci-
sion of the JATAM Kaltim dispute related to the
IUP document in Kutai Kartanegara Regency.
The decision of the East Kalimantan Provincial
Information Commission was strengthened by
the Supreme Court decision No. 614K / TUN /
15) Dessy Eko, Sulastio, Contract Transparency and Licensing in the Extractive Industries, PWYP Indonesia, 2018.
2015 which stated the IUP document was open
information. JATAM Kaltim only got a copy after
three years. In addition to the information dis-
pute process, Information Commission of Riau
has also issued a breakthrough encouraging
the disclosure of pro-active information in the
extractive industry sector. The breakthrough
was issued in the form of an Information Com-
mission Decision without going through an in-
formation dispute process, which was intended
to encourage the Government in Riau Province
to open information without having to be asked
by the applicant (proactive disclosure).
⁘⁘ Fourth: Best Practices in Several Countries
that has been Open the Contracts and Li-
censing to Public. Until now, there have been
at least 47 countries that have opened con-
tracts, either in part or in full, of all contracts
and permits they have. Not only that, practices
in several countries that open contract and li-
censing documents have also been carried out
at the initiative of the company. These prac-
tices can be argued that opening a contract
does not have a negative impact on industrial
management. Conversely, in some countries,
opening contracts has a positive impact on ex-
tractive industries in their countries. As in Peru,
publication of contract documents for mining
exploration and exploitation contributes to in-
creasing royalty revenues from an average of
5% to 25%. Other good practices in Liberia,
transparency policy in mining governance help
the country to attract investment.

14. 14
Graph 3: Countries that have opened extractive sector contracts
Afganista Both, Nearly all
Albania Both, Nearly all
Armenia Mining, Nearly all
Burkina Faso Mining, Some
Cambodia Mining, Some
Chad Both, Nearly all
Democratic of Congo
(DRC)
Mining, Some
Germany Both, Some
Ghana Oil and gas, Nearly all
Guatemala Oil and gas, Nearly all
Guinea Both, Nearly all
Guyana Oil and gas, Nearly all
Honduras Oil and gas, Nearly all
Kyrgyz Republic Mining, Some
Liberia Both, Some, Mining: Some
Malawi Oil and gas, All
Mali Mining, Some
Mauritania Both, Some
Mexico Oil and gas, Nearly all
Mongolia Keduaya, Some
Mozambique Both, Nearly all
Niger Mining, Some, Mining, Some
Peru Oil and gas, Nearly all
Republic of Congo Both, Some
São Tomé and Prínc-
ipe
Oil and gas, Some
Senegal Both, Nearly all
Sierra Leone Mining, Nearly all
Timor Leste Oil and gas, Nearly all
Togo Mining, Some
Ukraina Both, Some
United Kingdom Oil and gas Nearly all
Australia Both, Some
Azerbaijan Both, Some
Bolivia Oil and gas, Some
Colombia Both, Some
Dominican Republic Mining, Nearly all
Equatorial Guinea Oil and gas, Some
Greece Oil and gas, Some
Iceland Oil and gas, Nearly all
Iraq (kurdistan) Oil and gas, Some
Lebanon Oil and gas, Nearly all
New Zealand Both, Nearly all
Philippines Mining, Some, Mining Some
Tunisia Oil and gas, Nearly all
United States Both, Some
Venezuela Oil and gas, Some
Source: NRGI 2020, processed by the author

15. 15
The study o PWYP identified a policy of contracts
and permits transparency16
can provide benefits
namely; (1) helping the government to get better
contract agreements in the management of nat-
ural resources, as happened in Peru and Liberia.
16) Ibid,
17) EITI Indonesia Report 2017, page 7.
18) See https://eiti-indonesia.id/secretariat/risalah-rapat-tim-pelaksana-eiti-25-november-2019/
(2) Optimizing policy supervision through strong
public participation (3) Increasing public trust in
managing natural resources both to the govern-
ment and companies.
Implementation Challenges
Although there are various opportunities that are driving factors to encourage the Indonesian government
to implement EITI standards 2019 on contracts and permits transparency, there are still some challenges
and obstacles that have caused the Government of Indonesia (Ministry of Energy and Mineral Resources)
to date not be willing to pro-actively open the contract and permits documents and easily accessible to
the public. The challenges include:
⁘⁘ Lack of strong will from policy makers (the
government) and weak awareness of the
importance of public information disclosure
in the management of natural resources, in-
cluding contract and licensing documents.
The developments regarding efforts to open
contracts and permits in the Indonesian EITI
discourse, show that the Ministry of Energy
and Mineral Resources17
remains to the argu-
ment that the PSC contract document is a doc-
ument that is not opened to the public based
on the decision of the Supreme Court (MA).
⁘⁘ Opening is still limited to documents declared
open by the Information Commission. Mean-
while, for the mining sector the government will
only open three work contract documents (KK)
which have been decided to be open by the
Central Information Commission with pre-req-
uisite conditions for certain sections. The CoW
documents are Freeport, Newmont, and Kaltim
Prima Coal based on KIP Decree No: 197 / VI
/ KIP-PS-M-A / 2011. Meanwhile, the contract
documents or other permits will not be opened.
The latest EITI mandate has not yet affected
the government’s position on this issue. In the
EITI MSG forum held on November 25, 2019,
there was no agreement between the parties.
The Ministry of Energy and Mineral Resources
and SKK Oil and gas remain in a position not
to open pro-actively except in documents that
have been declared open upon the decision
of Information Commission. Even though the
MSG forum was held after the EITI standard
2019 agreement was published18
.
⁘⁘ Licensing is problematic. The management of
natural resources in Indonesia faces the prob-
lem of corruption that occurs when the mecha-
nism and process of granting permits is carried
out. The KPK since 2009 has handled 27 cases
of corruption in the natural resource sector, in-

16. 16
cluding plantations, forestry and mining19
. This
issue has the potential to be an implicit reason
why the government does not open contract
and licensing documents. The government
ignored the order of Information Commission
and MA decisions related to the order to open
the Right to Business (HGU) document. Even
the Ministry of Economy actually issued a Cir-
cular Letter No.AN.03.01 / 265 / D.II.M.EKON /
05/2019 which states that the HGU document
is an exempt document. At the same time,
various findings were made regarding corrupt
practices, as well as unlicensed land tenure
in natural resource management both in the
plantation and mining sector. Coordination and
Supervision by KPK in 2014 also found that
many licenses overlapped with one another
due to the weak due diligence process when
granting permits, even there were IUPs that
did not have NPWP and whose office address
was unclear. As a result, out of approximately
11 thousand licenses, less that 50% are eligible
for clean and clear.20
⁘⁘ Information on Contract Documents Has
Been Decided Closed by the Supreme Court.
Two cases of information dispute on PSC con-
tract documents that have occurred in Indone-
sia have been terminated as information that is
not required to be made public by the District
Court and the Supreme Court (MA). Although
previously it has been stated as open informa-
19) https://nasional.tempo.co/read/1341909/kpk-as-handling-27-kasus-korupsi-di-sector-sumber-daya-alam
20) ee the KPK Korsup report on the Mineral and Coal Mining sector: https://acch.kpk.go.id/id/berkas/litbang/l report-korsup- min-
ing-mineral-and-batubara-dalam-gn-psda
21) South Jakarta District Court, Decision Number 109 / Pdt.Sus-KIP / 2019 / PN.Jkt.Sel, p. 33.
tion by the Information Commission. The two
cases are the completion of the PSC informa-
tion of PT. Chevron Pacific Indonesia, which
was carried out by YP2IP in 2011 and recently
a PSC dispute occurred throughout the oil and
gas companies operating in Riau Provinve by
Noprizon Burman in 2019. The South Jakarta
District Court (PN Jaksel), over the Noprizon
information dispute through 109 / Pdt.Sus deci-
sion. -KIP / 2019 / PN.Jkt.Sel, states that infor-
mation related to PSC is information that is not
required to be disclosed to the public because
it contains confidentiality in it21
. The South Ja-
karta District Court’s decision did not explain
what part of the PSC document was deemed
confidential. While according to the author, the
panel of judges only used the consideration of
expert statements presented by SKK Oil and
gas. In fact, the decision was strengthened by
the Supreme Court with decision number 211 K
/ Pdt.Sus-KIP / 2020.
⁘⁘ The difference in the views of the judges of
the judiciary on the perspective of informa-
tion disclosure is a challenge itself, espe-
cially in encouraging contract disclosure in
Indonesia. The lack of knowledge and under-
standing of the substance of public informa-
tion known by the judges will potentially ham-
per information disclosure. The use of court
instruments in openness including contracts
cannot be denied, because Law No. 14 of

17. 17
2008 concerning Public Information Dislosure
regulates the mechanism of information dis-
pute resolution which is resolved through the
Information Commission at both the central
and regional levels. Do not stop at that stage,
if the disputing parties object to the Informa-
tion Commission’s decision then the next stage
the parties may sue to the State Administra-
22) Law 14 of 2008, article 47 (paragraph 1.2)
23) Ibid, article 50
tive Court (TUN) for state / government public
bodies and the District Court (PN) for non-gov-
ernment public bodies22
. The next stage, if ob-
jected to the TUN / PN verdict, then the parties
can bring a lawsuit back to the Supreme Court
(MA) as an instrument for resolving the final
dispute (Cassation)23
.

18. 18
D. Recommendation
Contract and licensing documents transpaency is a mechanism that must be carried out by the govern-
ment as a step to create better natural resource governance. The EITI instrument is a strategic oppor-
tunity to achieve this. For this reason, alternative and recommended policy steps that need to be taken
include:
Strengthening EITI principles in implementing Government policies, specifically related
to contract/permit transparency, as well as strengthening the MSG model to strengthen
awareness of the importance of contract transparency in avoiding social conflicts with
the community and strengthen oversight of contract compliance for payment of state
revenues/taxes, as well as other rights and obligations stated in the extractive industry
contract/permit.
Relevant ministries/institutions (ESDM, SKK Oil and gas, BPH Oil and gas, BKPM, DPR)
can develop an openness portal that gradually open oil and gas and mineral mining
contracts/permits which is currently actively carrying out exploration and exploitation
activities in Indonesia. This portal can be developed collaboratively with industry players
(as contracting parties/permit holders) and also with other parties such as civil society.
The portal can also refer to several global portals which have also opened mining con-
tracts /permits.
Policies and regulations review under the law that are not in line with transparency of
contracts and permits to the public that are in conflict with the FOI Law; It is necessary
to strengthen the capacity of public information dispute settlement instruments, such as
the Courts (TUN / PN) and the Supreme Court in resolving public information disputes.
Conduct a consequence test and test the public interest on the substance of the in-
formation contained in contracts and permits, to obtain certainty of the reasons for the
confidentiality of the contract, as well as gain consideration of the advantages and disad-
vantages if opening a contract / permit the mining sector.
Intensifying discourse with stakeholders and building public awareness on the benefits
and best practice of countries that have implemented contract/permit transparency, as
well as the benefits obtained for the industrial sector and the economy in Indonesia on a
macro scale if contract transparency is carried out.
1
2
3
4
5

19. 19
Reference:
Dessy Eko Prayitno, Sulastio, Elizabeth Napitupulu, Contract Transparency and Licensing in the Extractive
Industries, Publish What You Pay (PWYP) Indonesia, February 2018
Don Hubert and Rob Pitman, Past the Tipping Point? Contract Disclosure within EITI, Natural Resource
Governance Institute, March 2017.
EITI International Secretariat, The EITI Standard 2019, October 2019.
________, The EITI Standard 2016, 15 February 2016.
________ , Checklist for integrating plans for contracts transparency in work plans, January, 2020
________, Contract Transparency In Oil, Gas And Mining Opportunities For Eiti Countries, June 2018
EITI Indonesia Secretariat, EITI Indonesia Annual Progress Report, January-December 2017.
EITI Indonesia Secretariat, EITI Indonesia Report 2015.
Corruption Eradication Commission, Mineral and Coal Mining and Coordination and Supervision Report:
Findings, Follow-Ups and Achievements, 2018.
Natural Resource Governance Institute, Contract Transparency, Creating Conditions To Improve Contract
Quality, 2018
Robert Pitman and Rani Febrianti, Why Mining Agreements in Indonesia Must Be Open to the Public, Nat-
ural Resource Governance Institute, 2020
Sebastian Sahla, Hosana Chay and Rob Pitman, How and Why the Myanmar Government Should Publish
Petroleum and Mining Contracts, , Natural Resource Governance Institute, May 2019
Laws & Regulations:
Law Number 14 of 2008 concerning Openness of Public Information
Supreme Court, Supreme Court Decision No. 211 K / Pdt.Sus-KIP / 2020.
South Jakarta District Court, VerdictNumber 109 / Pdt.Sus-KIP / 2019 / PN.Jkt.Sel,

20. 20
PWYP Indonesia is a coalition of civil societies for transparency and accountability of extractive
resource governance in Indonesia. PWYP Indonesia was established in 2007, legalized under Indo-
nesia’s law in 2012 as Yayasan Transparansi Sumberdaya Ekstraktif, and affiliates to the network of
PWYP global campaign. PWYP Indonesia works in transparency and accountability along the chain
of extractive resource, from development phase of contract and mining operation (publish what
you pay and how you extract), production phase and revenue from industries (publish what you
pay), to the spending phase of revenue for sustainable development and social welfare (publish
what you earn and how you spent).
Address
Jl. Tebet Timur Dalam VIII K No. 12, RT 001/009,
Tebet Timur, Tebet, Kota Jakarta Selatan, DKI
Jakarta 12820
Social Media
pwypindonesia — Instagram
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Publish What You Pay Indonesia — Facebook
Publish What You Pay Indonesia — Linkedin
Contact
sekretariat@pwypindonesia.org — Email
www.pwypindonesia.org — Website
Publish What You Pay Indonesia
[Yayasan Transparasi Sumberdaya Ekstraktif]
This Brief was prepared by team of national secretariat office of Publish What You Pay Indonesia.
The publication of this report is made possible with the support of Hivos’ Open Contracting Pro-
gram. The contents expressed in this report are the responsibility of Publish What You Pay Indo-
nesia and do not reflect the opinions and views of Hivos.