Miners may be slapped with deposit obligation

Ika Krismantari, The Jakarta Post, Jakarta

A regulation is being drafted that would oblige mining firms to conduct post-exploration activities after their concessions end, a senior lawmaker says.

The regulation, which would supplement the mining bill, is part of efforts to help ensure responsible mining operations that meet natural and environmental conservation principles, lawmaker Erlanga Hartarto of the Golkar Party told The Jakarta Post last week.

Erlanga is a member of the House committee currently deliberating the mining bill.

Under the regulation, miners would have to incorporate rehabilitation plans in their proposals to obtain operating permits.

"We will oblige them to deposit funds for the post-exploration activities, before they can get the mining permit," Erlangga said.

Currently, there is no law obliging companies to conduct post-exploration activities. These activities are only conducted case by case, most under an agreement incorporated in the concession contract between the companies and the government.

The amount of the deposit will depend on the size of the mining concession and the commodity being mined, Erlangga says.

He said this system was expected to prevent cases where mining companies simply left after their mining concessions ended, leaving local residents and the government to bear the environmental consequences.

In a copy of the draft sent to the Post, the regulation stipulates that companies must set up accounts for time deposits, insurance or bank guarantees, as a rehabilitation guarantee.

It also says proposals for post-exploration and rehabilitation activities will be a major factor in determining whether a miner will be eligible to obtain a permit.

Irwandy Arif, chairman of Association of Indonesian Mining Professionals, said the regulation would not be a problem for miners, with some having already adopted similar measures.

"Their (mining companies) focus now is not only how to gain revenue, but also how to create sustainability in their business operations, which involves environmental preservation and community development," he said.

Commenting on the deliberation of the mining bill, Erlangga said it was likely to miss the July deadline as there were issues that still needed to be agreed upon.

"But hopefully we can pass the law by the end of this year."
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