Re-Evaluation of Clean and Clear Status for Mining Licenses in Indonesia

By Michael S. Carl and Florence G. Santoso In connection with the transfer of mining authority from Regents/Mayors to Governors[1] and from Regents/Mayors and Governors to the Indonesian Minister of Energy and Mineral Resources (MEMR)[2] pursuant to the New Regional Government Law[3], the MEMR is conducting another review of existing mining licenses (known as IUPs) previously issued by Regents/Mayors and Governors. MEMR Regulation No. 43 of 2015 regarding Procedures for Evaluation of Issuance of Mineral and Coal Mining Business License (MEMR 43/2015) sets forth the requirements for IUPs to be declared Clean and Clear (CNC), meaning they have been validly issued and conform to the requirements of the Mining Law. The requirements and consequences for failure to satisfy them are as follow:

MEMR will only issue CNC Certificates to mining companies which have submitted the following documents: 1.√Ç √Ç √Ç √Ç √Ç √Ç √Ç  exploration report and, if applicable, feasibility study report 2.√Ç √Ç √Ç √Ç √Ç √Ç √Ç  environmental documents, i.e. AMDAL or UKL-UPL and 3.√Ç √Ç √Ç √Ç √Ç √Ç √Ç  evidence of payment of dead rent and, if applicable, royalty. Failure to submit the above documents may result in administrative sanctions in the form of written warnings, temporary suspension of mining activities or revocation of IUP.

[1] Applies to domestic mining companies having a mining area located within one province. [2] Applies to (i) domestic mining companies having a mining area located in more than one province and (ii) all foreign-owned mining companies. [3] Law No. 23 of 2014 regarding Regional Government, as lastly amended by Law No. 9 of 2015. [4] √Ç √Ç In the event of overlap between IUPs having the same mining commodity, first come, first served applies, based on the date of submission of application and satisfaction of all requirements. This publication is intended for informational purposes only and does not constitute legal advice. Any reliance on the material contained herein is at the user√¢¬Ä¬ôs own risk. You should contact a lawyer in your jurisdiction if you require legal advice. All SSEK publications are copyrighted and may not be reproduced without the express written consent of SSEK.