TEMPO.CO, Jakarta - Several economists have criticized the government’s plan to allow religious civil organizations to manage mining. Director of Public Policy at the Center of Economic and Law Studies (Celios) Media Wahyudi Askar, for example, said that several economic and environmental impacts would result from the organization's plan to manage mining concessions.

According to him, there will be economic injustice because the civil organizations may have insufficient expertise or resources to manage the mines efficiently. "This can result in decreased productivity and lower income compared to mining companies with more capacity," he said when contacted on Sunday, May 12, 2024.

Furthermore, this situation also potentially creates corruption and abuse of authority, since civil organizations may not have a strict monitoring and accountability system like larger mining companies.

Third, legal and investment uncertainty will arise. "Investors will be reluctant to invest capital in mining projects managed by civil organizations because of legal risks and policy uncertainty," he said.

This plan also has environmental impacts. According to Askar, civil organizations that don’t possess adequate knowledge or experience in environmental management can increase the risk of environmental pollution such as air, water, and land pollution.

He also believes that this plan must be rejected because it could potentially harm the country. Materially, this will damage the market structure, hit investor confidence, and eliminate potential state revenue.

Previously, the government planned to distribute mining business licenses (IUP) to religious civil organizations. Minister of Investment and Head of BKPM Bahlil Lahadalia wants mining concession licenses to be distributed to civil organizations by revising Government Regulation No. 96 of 2021.

Tempo confirmed the progress of the revised regulations to the Secretary General of the Ministry of Energy and Mineral Resources, Dadan Kusdiana, but he did not respond. Previously, the Ministry stated that the revision process at the Ministry of State Secretariat had not been completed.

ILONA | VINDRY FLORENTIN

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