TASK 5

CRITICISM AND SUGGESTIONS ON MINING

INDUSTRY IN INDONESIA

task subjects
ENGLISH ENGINEERING 1
Lecturers: Herlina S.pd, M.Pd

Arranged by:

Syukron MAHARESTU (2016310010)

MINING ENGINEERING STUDY PROGRAM D3

EDUCATION FOUNDATION PRABUMULIH
2019

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 PRELIMINARY

Indonesian oil and gas potential reach 8,000 trillion rupiah. Amount to 4 times higher
than Indonesia's debt, currently at 2000 trillion. At present 80% of oil and gas wells are
managed by foreigners. This is what causes the oil and gas does not benefiteconomyfor
the people. Demokrasilah legalizing foreign oil and gas management by. The board
members made a favorable foreign law and detrimental to the people. Because the laws
are made to allow foreigners to manage oil and gas-oil price be very expensive for the
people.

Why in could happen? Where is the role of the political elite, officials, stakeholders of
power? Is their ears gagged money so did not hear? Oleha Therefore, the authors tried
to explain the eight suggestions and criticisms to the management of oil and gas in
Indonesia. Hopefully the oil and gas issues in Indonesia can be resolved.

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Transparency and Accountability

Oil and gas sector should not be continuously undermined the mafia. Therefore,
disclosure of information on the oil and gas sector became a key early in the opening of
the alleged foul play. Disclosure of information in various sectors referring to Law No.
14 of 2008 on Public Information.

The lack of information related to the oil and gas sector have an impact on public
ignorance of the difficulty in monitoring the activities of the oil and gas sector. It is also
detrimental to the country as a result of a foul pemainaan the oil mafia.

In fact, the purpose of the state in oil and gas sector has been set out in Article 3 letter a
and b Law No. 22 of 2001 on Oil and Gas. Letter a mention, "Ensuring the effective
implementation and pengedalian activities of exploration and exploitation of effective,
efficient, effective, and highly competitive and sustainable oil and gas on state-owned
strategic and non-renewable through an open and transparent mechanism".

While huurf b says, "Ensuring the effective implementation and control of the business
of processing, transportation, storage, and commercial yan held accountable through
fair competition mechanism, healthy and transparent".

The experience of many countries shows that the management of natural resources
with transparency and accountability have contributed to widespread economic growth
and reduce the risk of corruption and conflict. Transparency of the licensing process
should run in full, both in the oil and gas and mining sector through the licensing
process consistency running the contract ways:

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

 Allocations granted through open auction involving at least three business

entities that provide expressions of interest to the area has to offer
 Clarity will be the allocation of rights and delivery of such information to the
public
 The public disclosure of the ownership of all companies involved. This disclosure
will ensure that only the best dengankualifikasi company that will carry out
exploration and production activities in Indonesia, as well as protect the project
from corruption and conflict of interest

Pertamina president

If the Indonesian oil and gas management later refunded 100% to Pertamina then the
person who will lead the large companies should not be entrusted by the political
parties. Inasmuch, could weigh on its performance in serving the community and the
company.

Selection of an institute leader prioritizes integrity, honest and willing to work. Also do
not mind the origin of these leaders, from any internal or external. Choose a leader who
is not job seekers. Instead of selling to the left and right to find a position. Look for
people whose lives are not seeking power but who serve the public. Free from human
intervention. An understanding of energy makrodan mikropenting thus adding
confidence that leaders tidakakan Pertamin serve as executor of the policy behind it.

Pertamina president can fix variousbusinessPertamina ranging from upstream,

downstream, to midstream. But the main focus on reform priorities could be done in the
upstream sector. Corruption and mafia-free gas.

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 Selection of the ultimate leader of EMR

The highest leader of EMR is taken from pure technocrats so as not vulnerable
affected. To avoid the presence of oil and gas mafia has been playing at some point as
royalties and cost recovery in the energy sector. Two sectors are most often stolen and
tricked mafia so that the state bear the loss. Outsmart oil mafia that funds soared and
state cost recovery losses.

The supreme leader of the EMR at least have the following requirements:

 Integrity, has a track record, and has a commitment to promote the interests of
civil society on issues related to the improvement of good governance (good
governance), anti-corruption, transparency and accountability of state finances,
as well as matters relating to the management of resources natural resources,
especially extractive industries and other natural resources.

 Having knowledge, understanding and capacity for the extractive industries of oil
and gas and mining, in particular in terms of: the reception countries and regions,
transparency and financial accountability countries / regions, practices,
regulations and policies in the oil and gas sector and mining, and analysis of
social and environmental impacts , Able to communicate well and can speak and
have the ability of analytical and negotiation,

 Having knowledge, understanding and capacity for the extractive industries of oil
and gas and mining, in particular in the reception countries and regions, financial
transparency and accountability aspects of the countries / regions, practices,
regulations and policies in the oil and gas and mining sectors, and the social and
environmental impact assessment.

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Election Law Enforcement

To combat the oil mafia, must appropriately select law enforcement leaders. One of
them, being careful to choose the apparatus that is immune to acts of corruption.
Strengthen the Commission is supported by an extensive network of credible choose a
new Attorney General, the Chief of Police chose a credible third, who does not have fat
bank accounts.

Combating oil mafia would have a positive impact on the confidence of market
participants so as to affect the economic climate Indonesia

Law enforcement agencies, both public prosecutors and judges need to be equipped
with knowledge of the oil and gas sector to avoid mistakes in a decision that could result
in long term for the industry.

Leading to a national oil and gas production target is not met, because employees of oil
and gas are in uncertain conditions due to their peers convicted on charges that they do
not. In addition, law enforcement knowledge about the oil and gas industry is still
considered minimal, especially the problem of production sharing contract (PSC), how
the mechanisms work in the oil and gas industry. As a country that memiiliki natural
resources, law enforcement should also equipped with soft skills related to strategic
industries such as oil and gas or mining, not only an understanding of the legal aspects
alone.

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Give the management rights to Pertamina

Confidence in the ability and potential of the nation's children must be presented by the
government. One of them is to give the right to manage the oil and gas from foreign
companies who already completed the contracts to oil companies nasionalKita has
qualified human resources, it is able to manage oil and gas blocks wherever manage
the block, will end his contract on March 31, 2017.

Unlike the previous institutional governance, to do by a state company, Pertamina,

which recognized the principle of limited liability (limited liability). So if there is a legal
dispute between the businesses of the State Enterprise / SOE and the SOE PSC's just
stop it all. In this context, the state's responsibility is limited to the ownership of shares
or SOE state.

From the standpoint of the state and the contractor (investor), the change of the
upstream sector institutions that were previously done by the state into BHMN, also
tend to harm. Based on the standpoint of state interests, in addition to the loss of the
sovereignty over control of natural resources (oil and gas) and the potential of the
country in a legal dispute lodged businesses, the state also troubled because they can
not sell part of oil and gas production which they are entitled and should appoint the
other party.

The practice of de-nationalization of the economy, especially in the sector have formed
kembalisusunan mgas Indonesian economy under the domination of a foreign
corporation. We need to bounce back the aspirations of the nation to the actual
memperjuangkankemerdekaan, including without foreign intervention. Give to the
children of the nation itself to manage the oil and gas industry without relying on
foreigners.

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Oil and gas management practices by foreign intervention is not in line with the 1945
Constitution In Indonesia the standpoint of energy policy embodied in the 1945
Constitution article 33, paragraph 2: "Earth and water and natural resources contained
in it are controlled by the State and used for the greatest prosperity of the people. "Like
Malaysia, the purpose of the use of energy (oil and gas), which is the result of mother
earth mines controlled by the government as a whole also showed that the country's
strategic oil and gas into a commodity.

However, in practice the law be a derivative of the 1945 Constitution, are not mutually
street. It can be analyzed through several kebijkab in between: Law No. 25 of 2007
(Investment), Law No. 8 of 1971 (Pertambangn Company Oil and Gas), Law No. 22,
2001 (Oil and Gas), Law No. 30 of 2007 (Energy). PP 5 of 2006 (National Energy
Policy).

Under the Oil and Gas Law, Setting the energy in Indonesia is more skewed in the
memberlakukanenergi paradigm as a market commodity. The role of Pertamina placed
together with other private companies, which for the oil and gas must pass eksploarsi
tender. In contrast to Malaysia entire management authority Migasdiatur by Petornas as
an arm and a leg state. The private companies who want to invest needs to cooperate
with Petronas. With a dominant advantage in Petronas.

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Advantages of Nations managed Alone

Actually, the Indonesian nation can manage his own fortune (oil and gas). Indonesia
has a lot of human resources working in foreign companies. Even if there is no human
government can pay for the services of the foreign worker tenga. They are owners of
our workers. They porters, our employer. Many benefits are obtained if the
management of the company is held by a national. The first of the revenue side,
because it is managed by a national company, then profits will not run out of the
country. Moreover, if the management is given to Pertamina, the state and the people
who will diuntungkan.Kedua, with the management in the hands of national companies
means providing greater employment opportunities for Indonesian workers. The third is
no less important is to ensure that oil and gas production for domestic demand. "

independent exploration

Baruna Jaya 2 is one of the four boats owned by the hall. Baruna Jaya 2, which is
specifically intended for oil and gas exploration, seismic already fitted on board. Seismic
exploration is the term used in the field of geophysics to explain the search activity of
natural and mineral resources that exist below the surface of the earth with the aid of
seismic waves. The recordings were obtained from this survey is called the seismic
section. Seismic exploration or exploration using seismic methods widely used by oil
companies to map the structure below the earth's surface could see possible pitfalls of
oil based on the interpretation of seismic cross section.

The future will produce preliminary data on estimated oil and gas resources (potential
seismic) in various regions of Indonesia. The data will be auctioned and be a reference
for Pertamina.

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CRITICISM OF THE LAW

Pre-application of Law 22/2001 on executive function (operator), Pertamina controls the

management of the oil and gas industry in upstream and downstream sectors, namely
Pertamina upstream sector contracts with a variety of other companies through
production sharing contracts (production sharing contract), and in the downstream
sector Pertamina as the operator of the sole. Post-application of Law 22/2001 on
executive function (operator), it only regular players. In the upstream sector operator
signed a contract with the government, and in the downstream sector is open to other
business entities who acquire a license pemerintah.Berbeda with Malaysia. Malaysia's
laws and regulations regulating load function (regulator), executive function (operator),
and functions manager (custodian) that provides special privileges or to Petronas
(Petroliam Nasional Berhad).

The company then acquired the rights for all oil and gas resources in Malaysia and the
Malaysian government fully give confidence to Petronas to develop and add value to
the resource itu.Siapa sort of exploration, they found the well and could produce,
Petronas must obtain a majority portion. They get the privilege to share deals that
besar.Konstitusi governing oil and gas governance in Indonesia is still very liberal. one
of the very liberal regulations in the management of oil and gas is Law No. 22 of 2001.
The law provides a great opportunity for foreigners to master Indonesian oil and gas, as
well as nourish the mafia.

Liberal law is strengthened by Act No. 25 of 2007.Kedua regulation weakened the

Indonesian oil and gas management systems, and fertilize the mafia practices from
downstream to upstream. This practice both at central and local level by leveraging its
proximity to the government. Downstream sector, he said, the mafia is often played in
menggeregoti recovery costs (cost recovery) from the State budget. While the upstream
level in addition to the world of smuggling, mafia also often arise in the process of loan
sharks. One of them exploit oil and gas imports. This practice is more severe because
the government does not build a refinery.

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