Indonesian Transparency back on track. [Posted 25 Nov 2015, 140 views, 12 likes, 1 comment]

The EITI (Extractive Industries Transparency Imitative) has recently published its 2012-2013 report, as a requirement for progressing out of its suspended status towards compliance with the international NGO. The four part report is in bahasa Indonesia, with English to follow shortly. The “report intends to promote stakeholder involvement in Indonesian extractive industry in providing better understanding to the Indonesian society on how the Government of Indonesia manage their natural resources”.

In 2012, the extractive industry contributed 11.8% to the total GDP, and 11.3% of GDP in 2013. Extractive industry contributed 30.6% of total state revenues in 2012 and 31.4% in 2013, and accounts for 33.8% of the total national exports in 2012, and 32.6% in 2013. Job creation in the extractive industries contributed 1.6 million employment in 2012(1.4% of work force), and 1.5 million in 2013(1.3% of work force).

The mining sectors reconciled tax revenues are Rp 5,897 billion and USD 2,442 million in 2012 and Rp 4,435 billion and USD 1,307 million in 2013. Reconciled non-tax revenues, including dividend, are Rp 3,792 billion and USD 1,930 million in 2012 and Rp 4,037 billion and USFD 2,093 million in 2013. In the mining sector the top 5 companies that contributed 35%  of all mining royalty for 2012 – 2013 are Kaltim Prima Coal, Adaro coal, , Freeport Indonesia (Cu, Au), Kideko Jaya Agung with Arutmin coal in 2012 being replaced by Bukit Asam Tbk in 2013.

The mining SOE’s [Aneka Tambang, Bukit Asam, Timah] contributed 7% in 2012 and 6% in 2013 of the total royalties paid to the central government. The extractive SOE’s paid Rp 9.2 trillion in dividend to the central government in 2012 (30% total revenues from total SOE dividend) and Rp 9.3trillion in 2013, or 27% of the total states revenues derived from SOE dividend.

The scoping study identified 62 coal companies and 14 mineral companies in 2012 and 69 coal companies and 30 mineral companies that met threshold requirements to comply with EITI reporting. In the mining sector, 21 companies failed to report from a total of 108 companies identified for reconciliation. The report lists such non compliant companies. Only a few of such companies were non compliant due to recent closure.

It would seem reconciliation of compliant companies is good, and identifies a number of areas where administrative compliance could be improved. There are some new aspects to this report, including the inclusion of PT Kerata Api (coal transport) and the question of determining the real ownership of some companies.

The report can be accessed on the EITI web pagehttp://eiti.ekon.go.id/en/laporan-eiti-indonesia-2012-2013

Reactions to this report have commenced, as in the Jakarta Post (24 Nov) article suggesting sanctions for non compliant companies.