Chief Justice Anwar Usman chairing the judicial review hearing of the Mineral and Coal Mining Law, Wednesday (10/27/2021). Photo by Humas MK/Panji.
Wednesday, October 27, 2021 | 22:46 WIB
JAKARTA, Public Relations—The provision on the extension of contract into IUPK (Special Mining Business License) as stipulated in Article 169A of Law No. 3 of 2020 on the Amendment to Law No. 4 of 2009 on Mineral and Coal Mining (Minerba) was declared conditionally unconstitutional in the verdict for case No. 64/PUU-XVIII/2020, which was filed by by Helvis, an advocate specializing on mining, and Muhammad Kholid Syeirazi, the secretary of Nahdlatul Ulama’s Scholars Association (ISNU), read out on Wednesday, October 27, 2021 in the plenary courtroom, where the litigants appeared before the Court virtually.
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Reading out the verdict, Chief Justice Anwar Usman said that the Court granted the petition of Petitioner II in part and declared Article 169A of the Minerba Law along the phrase ‘are guaranteed’ unconstitutional and not legally binding insofar as not interpreted as ‘may be granted;’ Article 169A paragraph (1) letters a and b of the Minerba Law along the word ‘guaranteed’ unconstitutional and not legally binding insofar as not interpreted as ‘can.’
The Court also asserted that Article 169A paragraph (1) of the Minerba Law now reads, “KK and PKP2B as referred to in Article 169 can be granted an extension to IUPK as a Continuation of Contract/Agreement after fulfilling the requirements provided that: a. contracts/agreements that have not received an extension are guaranteed 2 (two) times the extension in the form of IUPK as a Continuation of Contract/Agreement respectively for a period of no longer than 10 (ten) years as a continuation of operations after the end of the KK or PKP2B taking into account the efforts to increase state revenue; b. contracts/agreements that have received an extension for the first time can be granted a second extension in the form of IUPK as a Continuation of Contract/Agreement for a period of no longer than 10 (ten) years as a continuation of operations after the end of the first extension of KK or PKP2B taking into account the efforts to increase state revenue.”
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Auction for Private Entities
The Petitioners questioned Article 169A of the Minerba Law, which regulates IUPK, which they believed to be in violation of Article 18A paragraph (2), Article 27 paragraph (1), and Article 33 paragraphs (2) and (3) of the 1945 Constitution. The Court asserted that the selection to grant IUPK must be strict and follow the provision of Article 75 of the Minerba Law, said Deputy Chief Justice Aswanto.
Justice Aswanto further asserted that said provision clearly stipulates that the granting of IUPK to private entities must be carried out through auction of WIUPK (special mining permit area) without any distinction between domestic and foreign private entities. Therefore, the Court believes Article 169A of the Minerba Law could potentially lead to discrepancies between its implementation and Article 75. Moreover, he said, the provision justifies extension to IUPK as a continuation of operations of contract/agreement.
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In other words, business entities that enter into a work agreement (KK) and a coal mining work agreement (KK PKP2B) are automatically granted an extension to IUPK. The Court believes KK and PKP2B are private legal relations that must have concluded when the agreement ends. As such, there is no longer any legal relations between the Government and the private business entities with KK and PKP2B to warrant priority extension to IUPK, despite fulfilling the conditions required by Article 169A paragraph (1) of the Minerba Law.
“Therefore, the Government must start put licenses in order of priority, following the a quo Minerba Law,” said Justice Aswanto at the plenary hearing presided over by Chief Justice Anwar Usman and the other eight constitutional justices.
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Restricting Business Opportunity
Justice Aswanto also said that the guarantee of IUPK restricts the opportunity for domestic business entities to promote the economy in accordance with Article 33 of the 1945 Constitution. Therefore, the Court is of the opinion that the phrase ‘are guaranteed’ in Article 169A paragraph (1) of the Minerba Law and the word ‘guaranteed’ in Article 169A paragraph (1) letters a and b of the Minerba Law are against the principle of state control and opportunity for domestic business entities.
Without reducing the opportunity for private business entities to compete for IUPK and the role of the government in finding private business entities that have the capability and integrity in accordance with the provisions of laws and regulations and the principles of good corporate governance, the phrase ‘are guaranteed’ in Article 169A paragraph (1) of the Minerba Law must be interpreted as ‘may be granted’ and the word ‘guaranteed’ in Article 169A paragraph (1) letters a and b of the Minerba Law must be interpreted as ‘can.’
“Thus, the provision of Article 169A paragraph (1) of the Minerba Law along the phrase ‘are guaranteed’ and Article 169A paragraph (1) letters a and b of the Minerba Law along the word ‘guaranteed’ are in violation of Article 27 paragraph (1) and Article 33 paragraphs (2) and (3) of the 1945 Constitution. Therefore, the petition of Petitioner II was legally warranted in part,” Justice Aswanto said.
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Physical and Virtual Attendance
At the same hearing, the Court also passed a ruling to reject the entire petition No. 60/PUU-XVIII/2020, which was filed by Alirman Sori and seven other petitioners. In its legal considerations read out by Constitutional Justice Enny Nurbaningsih, the Court asserted that the Petitioners’ argument of the Minerba Law should have concerned amendment to the law, but replacement thereof. Consequently, the petition was declared legally unwarranted. The Petitioners claimed that their constitutional rights had been violated because the formation of the law was discussed exclusively and privately without transparency as stipulated by existing laws and regulations. The discussion of the bill didn’t involve the DPD when it has the authority mandated by the Constitution in discussing bills relating to the relationship between the central and regional government as well as the exploration of natural resources and other economic resources.
Regarding the issue, the Court believes that the plenary session to ratify the Minerba Bill had taken place on May 12, 2020, after the COVID-19 pandemic was declared a non-natural national disaster. The Court believes physical attendance at the ratification was absolutely mandatory as long as there were no strong reasons warranting virtual attendance. However, the reason was there and thus, virtual attendance was equated with physical attendance, indicating the quorum was met.
“Based on the above legal considerations, the Petitioners’ argument on the ratification of the Minerba Bill at the House’s plenary session being unqualified was legally unwarranted,” Justice Enny said.
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Mutatis Mutandis
The Court also rejected the entire petition No. 59/PUU-XVIII/2020 by Kurniawan, who argued that the drafting of the a quo law’s provision on the relations between the central and regional governments and the exploration of natural resources did not involve DPD (Regional Representatives Council).
In its legal considerations read out by Constitutional Justice Arief Hidayat, the Court asserts that the formation of the a quo law was constitutional, following the legal considerations in Decision No. 60/PUU-XVIII/2020 mutatis mutandis part of the Court’s legal considerations for Decision No. 59/PUU-XVIII/2020. “Therefore, the Petitioners’ petition in the formal judicial review case on the constitutionality of the Minerba Law must also be declared legally unwarranted,” he stressed.
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I Gde Pantja Astawa: Mineral and Coal Mining Law Formed Transparently
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Writer : Sri Pujianti
Editor : Lulu Anjarsari P.
PR : Raisa Ayudhita
Translator : Yuniar Widiastuti (NL)
Translation uploaded on 10/29/2021 08:38 WIB
Disclaimer: The original version of the news is in Indonesian. In case of any differences between the English and the Indonesian versions, the Indonesian version will prevail.
Wednesday, October 27, 2021 | 22:46 WIB 206