Alert on the overlapping Research Law 11/2019. Vol 112

Introduction.

The Jakarta Post recently reported a story “Enthusiasts deported for illegal research in NTT”. It seems some foreign sailing enthusiasts were planning to see if it was possible for early man to raft from Indonesia to Australia. However, the authorities deemed this to be an illegal research project, as per the National System of Science and Technology Law of 11/2019, (Research Law). The Jakarta Post went on; – “They did not have the appropriate permits and were deported under articles of the immigration law”. The newspaper reports that “the requirements for a research permit is detailed in Government Regulation No. 41/2006. A research permit guidebook released in 2016 also stipulates that foreign researchers must acquire a limited stay visa to conduct research in Indonesia. The process of obtaining a research permit can be long and complex, requiring approval from 10 different agencies”.

This is a typically unfortunate case of complex regulations forming a speed bump for the advancement of research on Indonesia. It may be interesting to note that the new Research Law is yet to fully develop its implementing regulations. In the meantime, those implementing regulations for the replaced law of 84 / 2002 are to apply, so long as they do not conflict with the new law. So only a few specialist lawyers may begin to understand what applies here.

The exploration and mining industry are advancing full steam ahead with Industry 4.0, and all sorts of inventions and innovative applications. So how does this Research Law impact upon the exploration and mining industry in Indonesia?

Law 11/ 2019 – Law on National System of Scientific Knowledge and Technology (Research Law)

This 53-page Law (plus 30 pages of clarification) is dated 13 August 2019, and has 2 years to complete implementing regulations. The following is based on a simple Google translation of the Research Law. The Research Law starts off with a number of simple definitions, including Research, Innovation, Technology transfer, Intellectual property etc. Much of the Research Law looks at the scholastic and government research aspects, including articles on retirement age for scientists etc.  Going forward, implementation is to be managed under the direction of a Master Plan, that is supervised by a new body of National Research Flagship Program (NRFP) to be implemented in 2020. The NRFP will come under the Ministry of Science, Technology and Higher Education, and is aimed at promoting synergy and cooperation across the many research agencies and universities. 

 A few of the articles pertinent to Exploration and Mining industry include (but not limited to): -, Article 4 covers “non-biological resources”. Article 10 b. specifies “natural resource potential” comes within the Master Plan. Article 12, and other articles confirm that business entities can play a part in the field of scientific research, innovation and application of technology. Article 18, the Central Government guarantees independence and freedom in the conduct of scientific research. Article 21 Research and Development results must be published and disseminated, unless otherwise stated by regulation. Article 40 The Central Government mandates all primary data and output is saved. Article 56 Central Government determines professional qualifications. Article 63 that business funding from science organizations is allowed, and may be incentivized through tax reductions. Article 72 Institutional elements of science and research can be done with overseas partners. Article 75 foreigner related science and technology must obtain a permit from the Government. Article 76 lists requirements for foreign related research, including having a written agreement for the movement or transfer material in physical or digital form. Article 93 Foreigners breaking this research law may be subject to administrative sanctions, or be fined up to Rp 4 billion and face up to 5 years in jail. Article 94 sets penalties for transporting specimens (physical or digital) overseas (maximum 2 years jail and Rp 2 bill fine). Article 96 for breaking this research law, business entities may also have their permits revoked.

The Law has a jingoistic thread running through it. It is clear that there are good intentions, but there is also a potentially darker authoritarian side.

Omnibus Draft Law.

A word search of the Research Law partial title of “Science and Technology” (ilmu pengetahuan dan teknologi) found this term occurred nine times in the draft Omnibus Law. Proposed amendments related to Spatial Planning, Environment, Agriculture, Animal Husbandry, Narcotics and Higher Education wherein each reference applied the term in that science and technology is a tool to be used. This casual review suggests that the draft Omnibus law does not look for further improvements in the Research Law.

The Indonesian mining scientific knowledge experience.

Research, innovation, technology transfer and dissemination of information (defined in the Research Law) are key aspects to global and Indonesian exploration, mining, processing and smelting industries. The mining industry continues to provide revenue for the state, jobs and incentives for its workers, and continue to deliver broad benefits to the people of Indonesia. These industries are heavily reliant upon progressive technology. Dissemination of such scientific knowledge are frequently undertaken through a variety of seminars and conferences. A few examples are outlined below that show of how scientific research in Indonesia is impacting upon the local mining sector: –

20 June 2019. The Indonesian Economic Geological Society (MGEI) held a special discussion about “The Indonesian REE Update; Where we are at and where to”. Rare Earth Elements (REE). Some research points included: –

• PT. Timah has developed bench top pilot plant studies of using monazite (2015 & 2017).
• There has been very limited research into Indonesian commercial uses of REE products. There are inadequate marketing studies that look at selling REE on the open market.
• REE deposits are being researched are a) primary monazite-based deposits, b) secondary laterite REE (or clay type), c) primary oxide deposits (Bastnaesite ores) and d) per alkaline igneous rocks. It was further noted that geochemical analysis in Indonesia for REE is a major concern, with many Indonesian laboratory instruments not working properly due to limited skilled operators and maintenance support.

September 2019. The 11^th annual conference of the Indonesian Society of Economic Geologists (MGEI) was an excellent platform to present a number of geological research papers. Much geological research is presently aimed towards better mapping and more detailed understanding of geological sites, often with a view to explore for commodities. There is an array of available sophisticated tools in Indonesia that can look deeply into the rock and mineral properties. Some of these new tools are more affordable for mining companies, research units and universities. The MGEI Conference showed some examples of geophysical surveys, approach geological modelling and particularly new paths to mineral processing / smelting. This ability to tackle complex deposits (including wall rocks and tailings) is providing new incentive and direction to revive exploration, mining and research.

11 December 2019. Tambang Magazine held a full day seminar “Indonesia Mining Outlook for 2020 – Minera and coal mining new policies and strategic issues in 2020”.

• Energy & Natural Resources, SAP Southeast Asia presented on “Making Mining More Agile and Transparent with Intelligent Technology”. This talk outlined SAP’s outlook and approach to providing consulting services of digital transformation in mining. The business models include the concepts of 1) making mining more predictable and safer, 2) collaborating with customers, suppliers and workers, 3) enhance operational and commercial agility, and 4) increase productivity through automation.

November 2017. The Indonesian association of economic geologists (MGEI) undertook its 9^th annual convention in Jogjakarta with the theme of “Geo-metallurgy”. Some research and innovation papers included: –

• “Optimizing resource extraction through geo-metallurgy studies; case studies at porphyry and HSE”. Short case studies were presented on the Batu Hijau flotation plant, and the Bakan & Seruyung HSE gold heap leach operations. New techniques included mineralogical studies focussed on the copper minerals, changes of ore type with depth, sieve analysis to further define clay content, etc
• “Ore petrography and its modern-day potential use in geo-metallurgy”. This was an excellent presentation on advances in reflected light petrology, combined with computer linked tools to determine the mineralogy of ores and gangue.
• “Spatial data for optimal geo-metallurgy” being a case study on Batu Hijau. Following in house geological research, systems were installed to trace ore from blast holes to stockpiles, and trace blending of hardness & ore from stockpile to mill.
• “Geo-Metallurgy application at Grasberg open pit mine”. Ore is not homogeneous and needs to be characterized spatially on geology, mining and processing aspects. Studies on the open pit mining further defined some zones that were not adequately addressed in the Feasibility Studies. These included some more detailed definition of clay (sericite), rock breakage and high pyrite areas that generated new models to guide production, including waste management.
• “Characterization of Indonesian copper concentrates – A study”. A number of samples from a wide range of copper locations were tested using XRF, ICP-MS, XRD, SEM-EDS. As input for developing process flow sheets.
• “Geo-metallurgy in case of nickel laterite ore processing by pyrometallurgical route”. Comparisons of the Indonesian pyrometallurgical plants of Rotary Kiln with Electronic Furnace (RKEF) and Blast Furnace (BF) using coke types were presented. Some research is encouraged to see if other elements (Mg) can be separated from the slag. 
• “Hydrometallurgy process on radioactive and Rare Earth Elements extraction from Monazite”. BATAN has built a pilot plant to extract the uranium, thorium and rare earths, along with the phosphates. BATAN hope to conduct further studies.

The pace of research and innovation.

The 5^th drill and blast conference was an eye opener into the pace of research in the mining sector. One mining equipment manufacturer have office-based teams in the USA developing algorithms and software to improve their equipment models etc. At 5pm they go home, but then the team in Europe pick up where they left off and continue, this is later handed over to teams in India, then to China, and then back to USA when they arrive for work the next day. This is a “follow the sun” working habit. This 24-hour multi continent approach reflects a new dimension of Industry 4.0 working model. A challenging environment for Indonesian graduates and experts to participate and compete in this Industry 4.0 world. Many equipment producers are enthused by the top young Indonesian engineers that are eager to learn new technology & skills.

Photogrammetry or LIDAR data, collected by drones, can download their raw data to the internet, process it offshore, and respond within hours with products such as topographic maps etc. Most geophysical data surveys, and some modelling and statistical packages follow this fast (hours) processing and reporting route that globally centralizes processing. Indeed, this follows the pattern of our daily use of Google to research information etc.

What is research?

It may appear that the plan to raft from Timor to Australia was simply some adventurists, that may have later written up their story for a magazine article. How will this impact on other activities, such as a tourist dining out at traditional Bali restaurants and then blogging about it – could that be misconstrued as research on Bali cooking?

A geologist undertaking the exploration activities certainly uses “scientific methodology” to record stream sediment geochemistry, map outcrops, undertake petrology and geochemistry, followed by systematic drilling to end up with a scientific based exploration target or resource report. Will such regular geological, mining, processing and metallurgical studies be subject to this Research Law, and its implementing regulations? 

Opinions.

One on-line commentators consider that some elements of the Research Law, which require compulsory submission of the research result to the government, seemingly hinder the interest of potential partners to established research collaboration. 

Informal talks with one person familiar with this regulation suggest that it seems those charged with administering the Research Law are not presently looking at registered work practices that comply with other ministries – such as development of resources & reserves under Minerba. It seems those charged with this this research law are focussing on their prime target to improve coordination between the various research bodies that are under so many different ministerial bodies. This coordination is also aimed at rationalization, and better direction, of state research funds. Other priorities seem to include getting a firmer hold on the administration of foreign parties undertaking research in Indonesia, and to restrict the export of scientific material (particularly biological samples). The Research Law also ups-the-anti by introducing criminal charges (with jail terms) and increasing fines.

Casual talks with senior staff from the Directorate for the Management of Intellectual Property [Direktorat Pengelolaan Kekayaan Interlektual], indicated: –

• The implementation of Research Law is under the Ministry of Science, Technology and Higher Education. The Testing and Application body [Badan Pengkajian dan Penerapan Teknologi (BPPT)] and other branches / organizations are waiting for the new National Research and Innovation bodyto be formed, and the development of new implementing regulations, before being confident in enforcing all aspects of the new Research Law. The development of implementing regulations will go through a consultative process, including input and discussion with other ministries and various academic, research and industry bodies. It is acknowledged that many aspects of the Research Law are subject to multi-interpretation, and possible overlap with other ministries.
• One factor in interpreting the law is the perceived outcome of the activity in question. It seems if there is a profit, or academic credits involved, then the research law is involved. If no profits or credits are involved, then compliance with other ministries regulations may be sufficient. This profit aspect spills across onto what visa a foreigner should obtain in coming to Indonesia. If the foreigner is attending, speaking at a conference, seminar or such, and does not receive any fee, then a visa 211 is sufficient for short stays. However, if the foreigner is paid, even for 1 or 2 hours, then a different visa C312 is required. For longer stays up to 1 year, then another type of visa (C315) may be required. Note that this article does not comprise legal / immigration advice, and those coming to Indonesia should undertake appropriate separate advice and checks on visa requirement. It seems if an Indonesian is participating in various ways at seminars etc, then no permit is required for the Indonesian.
• A ministry concern over the restrictions of exports of rocks and bulk samples (typically for mineral processing tests etc), is that Indonesia does not want to release any biological microbes and such that may be clinging to the earth / rocks.
• The issue of foreign funding for a mining company appears to be overlapping with this Research Law, and will be left for the new body and implementing regulations to sort out.
• Clarification on the issue of sending out digital scientific information is to be left to the future new body and implementing regulations to sort out.

Recommendation.

The Jakarta Post news report of Research Law being used to stop a few people from attempting to raft from Indonesia to Australia is a clear warning that this Research Law has the capacity to become another overlapping law to impede and complicate aspects of the exploration, mining and processing industries.

The Research Law has set aside two years (till 13 August 2021) to develop implementing regulations. The Mining industry may take this opportunity to make submissions, and engage with the government, to develop implementing regulations that are more compatible with the mining industry, and their professional associations.