Indonesian Supreme Court overturns ban on export of unprocessed minerals and ores

Indonesia’s Supreme Court has reportedly upheld a challenge to the Government’s ban on the export of unprocessed minerals and ore by striking down four articles of the Decree of the Minister of Minerals and Energy Resources No 7 of 2012 on Increasing Mineral Value Added through Refining and Smelting (MERM 7).
It has been reported that the verdict was handed down on 12 September 2012 but to date the written decision has not been released by the Supreme Court. The case arose from a legal challenge filed by the Nickel Association and the All-Indonesia Association of District-Level Governments. The Supreme Court reportedly rescinded Article 21 of MEMR 7 which prohibited holders of mining permits from exporting unprocessed minerals and ore abroad.
The Supreme Court’s decision does not appear to have overturned the provisions of higher ranking laws and regulations which require the holders of mining permits to process their products in country, being the 2009 Mining Law and Government Regulation 23 of 2010 on the Implementation of Mineral and Coal Mining Activities and as such this decision is likely to be of limited impact in the longer term.
Further analysis of the potential impact of the Supreme Court’s decision will however have to await the issuance of the written judgment.
To view a web version of this post please click here in English and Chinese.

Indonesian Constitutional Court amends mining law to empower local governments to decide new mining areas

In the latest of a string of important court decisions in the natural resources sector, the Constitutional Court of Indonesia has recently published a decision partially amending certain provisions of the Mining Law (Law No. 4 of 2009 regarding Mining). The effect of the decision is to give relevant regional governments, rather than the central government, the authority to determine which geographic areas are open for mining activities in Indonesia. The decision does not impact existing mining concessions which have been validly granted. David Dawborn, Haydn Dare, Mira Fadhya and Irina Akentijeva provide some observations below. Continue reading

Indonesian court decision casts uncertainty over legal basis of Indonesian oil & gas sector

The oil & gas industry in Indonesia has functioned via a production sharing contract (“PSC”) regime since the 1960s and has enjoyed a period of relative stability in recent years. A decision by the Constitutional Court of Indonesia has cast doubt over the current functioning of the PSC system and the key government administrator of the oil and gas industry in Indonesia, BPMIGAS.  Please click here to read a web version of this post in English or Chinese. Continue reading

Indonesia: BPMigas relaxes stance in requiring BANI arbitration clause in regulated contracts

In an important recent development for oil and gas companies operating in Indonesia, BPMigas has relaxed its stance in requiring BANI arbitration clauses in regulated contracts. Officials at BPMigas now state that companies entering into contracts in Indonesia may use other arbitral institutions, such as SIAC or ICC, provided that the seat of the arbitration is within Indonesia.  Please click here to read our post on our Arbitration blog.