Indonesia is blessed with an abundance of mineral resources. In addition to being one of the world′s largest producers of tin, coal, and copper, Indonesia produces significant quantities of gold and nickel. It also produces bauxite, phosphates, and alluvial diamond where there is great resource potential for production, as well.
Rivaling the nation′s mineral resources in abundance is the mass of legal red tape with which mining companies, both domestic and foreign, must contend when operating there. Already notoriously confusing, the Indonesian legal and regulatory regime is currently experiencing a time of sweeping change as the government reevaluates its attitude toward the industry.
To get an idea of just how confusing the situation has become, one need only consider the September 2012 decision of the Indonesian Supreme Court striking down the ban on the export of certain unprocessed metal and non–metal mineral products, which the Government introduced as a way of forcing producers of metal minerals and non–metal minerals to start carrying out domestic processing and refining of their production by January 2014. Although seen as a victory for the local mining industry, the Government has simply refused to accept the Supreme Court decision, insisting that the export ban is still in place. This is despite the fact that the commencement of widespread domestic processing and refining in January 2014 is a practical impossibility.
Adding to the confusion is the lack of any coherent system for the widespread public dissemination, discussion, or notification of proposed new regulations or contemplated major policy changes for the local mining industry before their enforcement. This, inevitably, results in new regulations and policy changes that are completely at odds with the reality of local mining industry conditions. Finally, new laws, regulations and policies impacting the local mining industry generally appear in official Bahasa Indonesia versions only, with foreign mining companies and foreign professional advisers being left to rely on occasional, poorly written, and inconsistent unofficial English translations often prepared by non–lawyers and people with no understanding of mining industry practice.
Considering the enormous stakes involved, it is more than a little surprising that no attempt has been made to provide a comprehensive, English–language guide to Indonesian mining laws and regulations until now, that is.
Written by a lawyer with unparalleled knowledge of and experience in the field, Mining Law & Regulatory Practice in Indonesia fills that gap in the global legal literature.
The first and only comprehensive English–language summary of all the more important laws and regulations in the booming Indonesian mining sector, this book provides thorough coverage of everything from price setting to the processed minerals VAT, land use regulations to investment regulations, rent use permits to forest area utilization. In addition to providing detailed reviews of the laws and their various interpretations, expert William Sullivan supplies in–depth analyses of potential legal pitfalls for domestic and foreign operators and investors.
An indispensable working resource for mining companies and their legal advisers and consultants, Mining Law & Regulatory Practice in Indonesia will also be of value to academics in the fields of international business, law, and finance, as well as industry associations and government policymakers both in Indonesia and abroad.
Praise for Mining Law & Regulatory Practice in Indonesia
“I have known Bill Sullivan for many years and admire his profound grasp of the simultaneously complex and dynamic legal system surrounding the mining sector in Indonesia, which is intertwined with forestry, land ownership, regional government, and other equally intricate matters. His incisive mind cuts through the maze and gets straight to the core of the issue. I am glad that he has now written a book for which he is immensely qualified and that is required reading for anyone interested in the Indonesian mining industry.”
Noke Kiroyan, former CEO, Rio Tinto Indonesia, Kaltim Prima Coal, and Newmont Pacific Nusantara
“Bill Sullivan has long been one of the most highly respected lawyers advising on mining activities in Indonesia. Now Bill has summarized his years of deep experience and high–quality analysis to produce Mining Law & Regulatory Practice in Indonesia. Anyone seeking to understand mining in Indonesia must read this book. It will be the standard reference for many years.”
James Castle, Chairman, CastleAsia, and founding President, International Chamber of Commerce in Indonesia
“Bill Sullivan disproves the theory that Indonesian law is ′unknowable′, but he does demonstrate its complexity. In a very clear, methodical way, Bill sets out the layers or ′lapis–lapis′ of laws, presidential decrees, ministerial decrees, and government regulations that make up the Indonesian legal regime around mining, which is administered by the central government, province governors, and regencies.
“Knowing for yourself with certainty what the law says is a great place to start in order to comply with it and progress your mining project. This is best attempted with a guide, and Bill′s law firm serves as a good guide.”
Andrew Wilson, Director, Robust Resources Ltd; Commissioner, PT Resource Alam Indonesia Tbk; former president director, PT BHP Billiton Indonesia
“Bill Sullivan′s comprehensive compilation of the laws and regulations governing activities in the exploration and mining sector in Indonesia is a long–awaited reference book for anyone involved or considering involvement in the sector. The inclusion of regulations, together with his comments, is invaluable, as is the inclusion of the relevant regulations on forestry. Project managers, directors of parent companies, and anyone interested in investing in the sector will find it to be an essential addition to their reference library.”
Malcolm Baillie, Chairman, Indonesian Forum for Mining Exploration and Development
“Bill Sullivan′s book shows miners a clear path through the government′s ′minefield′ of regulation. Bill Sullivan has produced a comprehensive, systematic work. He deserves a prize for clarifying a very turbid regulatory regime. Bill′s book will be kept on the desktops of all mining executives.”
Dennis Heffernan, Principal, Van Zorge Heffernan, a prominent government relations and consulting company
About the Author
William A. Sullivan is a Licensed Foreign Advocate in Indonesia as well as a Solicitor of the Supreme Court of New South Wales; a Solicitor of the High Court of Australia; an attorney and counselor–at–law in all courts of the State of New York; an attorney and counselor–at–law in the United States District Court for the Southern and Eastern Districts; a Solicitor of the Supreme Court of England and Wales; and a Solicitor of the Supreme Court of Hong Kong, admitted to practice in each of these jurisdictions. Bill′s first involvement with Indonesia came in the early 1990s when he was seconded by an Australian law firm to a leading Indonesian law firm to provide international legal expertise in corporate and securities with a particular emphasis on corporate restructuring, the development of new financial products, debt and equity raisings, and other capital markets projects. He also acted for multinational corporations with substantial investments in Indonesia and for Indonesian companies pursuing major domestic and foreign investments, particularly in the oil and gas and hotel industries. From 1999 to 2000, Bill acted as the Australian government–funded technical adviser on debt restructuring matters to Bank Indonesia (the Indonesian central bank). Since 2006, Bill has concentrated increasingly on the Indonesian mining, energy, and resources sector. He has been involved in the negotiation, structuring, and documentation of numerous coal, gold, iron ore, and mineral sands project acquisitions, financings, and investments. This work has also included both advising upstream oil and gas companies in connection with their existing operations as well as advising foreign independent oil and gas companies on potential new investments in Indonesia, particularly in the coal bed methane gas sector.
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