16 May, 2016
Presidential Regulation No. 146 of 2015, dated December 30, 2015, regarding the Implementation of the Construction and Development of Domestic Oil Re neries. The stated aim of this Regulation is to guide the implementation of oil re nery construction and development to create national energy resilience through the increase of fuel oil and other products. Oil re nery construction may be carried out either by the Government or a Business Entity. If done by the Government, such construction may be done through cooperation between the Government and a Business Entity (“KPBU”) or by way of an appointment. When conducted by appointment, the nancing may be through the Government or corporations. The Minister of Energy and Mineral Resources (“MEMR”) shall determine at least (i) the location of the re nery; (ii) capacity of the re nery; and (iii) types and quantities of the re nery product. In the implementation of construction through a KPBU, the MEMR shall appoint Pertamina as the party responsible for the project. Pertamina will carry out the planning, preparations and signing of the transaction, and supervise project implementation. It will also procure the Implementing Business Entity, either through a tender or direct appointment, and have the KPBU agreement signed with the Implementing Business Entity to ensure ful lment of the nancing by the Implementing Business Entity.
The Implementing Business Entity shall be granted a Processing Business License valid for a period of 30 years (extendable one time for a maximum of 20 years). The Coordinating Minister for the Economy will form a Coordinating Team for the implementation of the construction and development of the oil re nery (“Coordinating Team”), consisting of representatives from the (i) Coordinating Ministry of Maritime Affairs; (ii) Ministry of National Development Planning; (iii) Ministry of Finance; (iv) Ministry of Energy and Mineral Resources; (v) Ministry of State-Owned Enterprise; (vi) Ministry of Industry; (vii) Ministry of Trade; (viii) Ministry of Agrarian Affairs and Spatial Layout; (ix) Finance and Development Supervisory Agency; and (x) other relevant institutions. Pertamina is required to submit a report to the Coordination Team every six months or at any time deemed necessary in the framework of the construction and/or development of the oil re nery. This Regulation came into force on the date of its promulgation.
Minister of Energy and Mineral Resources (“MEMR”) Decree No. 2 K/12/ MEM/2016, dated January 4, 2016, regarding the Retail Sale Price of Certain Types of Fuel Oil and Types of Fuel Oil Speci cally for Appointment. This Decree determines the retail sale price of certain types of fuel oil as follows: (i) kerosene retail sale price at Rp 2,500 per liter including VAT, and (ii) gas oil retail sale price at Rp 5,650 per liter including VAT and Tax for Vehicle Fuel Oil (“PBBKB”). It also determines the retail price for types of fuel oil speci cally for appointment whereby Ron 88 Gasoline retail shall be Rp 6,950 per liter including VAT and PBBKB. This Decree came into force on January 5, 2016.
Circular of Directorate General of Mineral and Coal No. 05.E/30/DJB/2015, dated November 3, 2015, regarding the Announcement of Clean and Clear Status and Clean and Clear Certi cates for Non-Metal and Rock Mineral IUP. This Circular elaborates on the implementation of MEMR Regulation No. 2 of 2013 regarding the Supervision of the Implementation of Mining Business Management by Provincial and Municipal Governments, and the MEMR Decree regarding Mining Areas. The Directorate General of Mineral and Coal supervises the implementation and management of mining business activities in the regions in the form of the announcement of Clean and Clear Status and Clean and Clear Certi cates for (i) Mining Authorities, Regional Mining Licenses and Communal Mining Licenses issued before the enactment of Law No. 4 of 2009 by governors and/or regents/mayors pursuant to their authorities, including the process of converting the licenses to Mining Business Permit (“IUP”) and Community Mining Permit (“IPR”); (ii) IUPs issued by governors and/or regents/mayors pursuant to their authorities based on the request of mining authorities and that have received reserved working area prior to the issuance of Law No. 4 of 2009. This Circular stipulates that mining commodities generated from Non-Metal and Rock Mineral IUPs are to be used to ful ll the needs of domestic development and as raw materials for domestic industries. Regional governments are still required to report the issuance of Non-Metal and Rock Mineral IUPs to the MEMR.
For further information, please contact:
Dyah Soewito, Partner, Soewito Suhardiman Eddymurthy Kardono
dyahsoewito@ssek.com
