KPK Reminds Jero Over Unfinished Contracts

TEMPO.CO, Jakarta - The Corruption Eradication Commission (KPK) reminded the Energy and Mineral Resources Ministry over unfinished mining contracts renegotiation. According to the KPK, the uncertainty of the renegotiation prevented the government from getting  royalties from 37 Contract of Work (COW) companies and 74 coal contracts of work (PKP2B).

According to Johan Budi, KPK spokesman, the non-tax state revenues (PNBP) of minerals and coal royalties from were lower than companies with mining permit. "Results of the study was presented to Energy Ministry in August 2013," he said yesterday.

Johan said as an example, Freeport Indonesia, which had been operating since 1967, had to pay 1 percent of royalty on the gold they produced. Meanwhile, according to government regulations, gold royalties had increased by 3.75 percent. Because of unfinished renegotiations, the state, US$ 330 million in royalties supposedly received by the government came to only US$161 million, a loss of US$ 169 million.

"The same thing happened with Vale Indonesia which did not adjust its royalty tariff. As a result, the state lost US$ 65.838 million per year," Johan said. He said that KPK had sent a letter to Energy and Mineral Resources Minister Jero Wacik, which was forwarded to the President on February 21.

Based on Article 169 of Mineral and Coal Mining Law No. 4/2009, the contract renegotiation was supposed to be completed by January 12, 2010. From the State Revenue Optimization audit, KPK found that Rp 6.7 trillion was lost during the period of 2003-2011 because of underpayment of royalties. The state had potentially lost US$ 1.224 billion from 198 coal mining companies in 2010-2012 and US$ 24.661 million from 180 mining companies in 2011.

ALI HIDAYAT | BERNADETTE CHRISTINA MUNTHE