KCMI and JORC merging paths for recognition of the Competent Person. Vol 137

Introduction

Indonesia and Australia are working towards mutual recognition of geological, mining and metallurgy engineers to ease the path for such engineers to work in each other’s country. There are significant differences in each of Indonesia and Australia’s governments systems of recognizing and managing such engineers. The professional systems of JORC (Australia) and KCMI (Indonesia) are somewhat similar, through both being registered to the international CRIRISCO code of reporting resources and reserves.

The JORC 2012 reporting code is being updated through an extensive member consultation process. One key area for JORC updating is reviewing the “self-declared” Competent Person, to perhaps follow Indonesia, and other countries, in developing an alternative industry / government managed registration process of competent persons. One key discussion point for the JORC committee are the issues surrounding competency.

This article provides some insight to the Indonesian and Australian registration of geoscience engineers (geo-engineers), and their aspect of competency.

IA-CEPA

The Indonesia Australia – Comprehensive Economic Partnership Agreement [IA-CEPA] includes provisions to establish a special team to work together to support the mutual recognition of engineers (including geological engineers, mining engineers, metallurgical engineers). Chapter 9 on trade in services includes; –

• ‘each Party shall endeavour to ensure that measures relating to qualification requirements and procedures, technical standards and licensing requirements and procedures that it adopts or maintains,
• “shall ensure that there are procedures in place domestically to assess the competency of professionals of the other Party.”
• the Parties shall work in cooperation with relevant intergovernmental and non-governmental organisations towards the establishment and adoption of common international standards and criteria for recognition and common international standards for the practice of relevant services trades and professions”.
• key words include “code of ethics”, “maintain professional certification”, ‘professional liability insurance”, “mutual agreements”

Indonesian Certification for competency in geology & mining.

The Indonesian Ministry of Manpower (regulation 180 of 2009) requires the department of professional certification (Badan Sertifikasi National Profesi / BSNP, division of Lembaga Sertifikasi Profesi / LSP) to apply certification to the fields of geology & mining. These professions must be handled by competent persons to support the principles of conservation, efficiency, environmental insight (occupational health & safety). This certification scheme is used to ensure and maintain technical competence of Vocational High School students and as a reference in assessment by LSP SMK Mining Geology Expertise Program and Competency Assessor. Law of the Republic of Indonesia No. 20 of 2003 concerning the National Education System Chapter XVI article 61 paragraph 3 states that a competency certificate is given by the organizer of education and training to students and community members as recognition on the competence to do certain jobs after passing the competency test organized by an accredited educational unit or certification body. This certification initiative is also to support the free flow of workers in the ASEAN Economic Community (AEC). Competency is classified into a number of units under the general headings, including; General, Core Competency, Topographic Measurement, Drilling, Rock Sampling etc.

In Indonesian there are 5- 20 recognized academic universities / institutes of technology that produce robust geo-science graduates, and many more academic bodies producing graduates of lesser standing. In Australia, there is a shrinking number of universities / institutes producing robust geo-scientists, with some dissolving their geo-science units to become part of other branches of engineering (civil engineering etc).

Engineers Australia on Competency for migrating professionals.

Engineers Australia (EA) is determined to ensure that only competent engineers get a chance to migrate and work in Australia. EA undertakes to assess the competency of an engineer on the basis of engineering skills and knowledge, professional attributes (competency), management, communication and leadership through a Competency Demonstration Report (CDR). All Engineers who want to migrate to Australia from countries that are NOT signatories of the Washington Accord, Sydney Accord or Dublin Accord, have to pass through Stage 1 skills assessment – CDR pathway. The CDR report applies in the fields of geologists & geophysics’, drillers, miners, shot firers, as well as other natural and physical science professionals (metallurgist). Australia is supporting Indonesian parties to become a member of the Washington Accord.

The Stage 2 Competency Assessment Standards are the profession’s expression of the knowledge and skill base, engineering application abilities, and professional skills, values and attitudes that must be demonstrated in order to practice independently or unsupervised. The Stage 2 Competency Assessment standards are used as the basis of assessment for Chartered membership of Engineers Australia (CPEng) and registration on the National Engineering Register (NER). Chartered membership is exclusive to Engineers Australia. It is a professional credential recognized by government, business and the general public worldwide. Professional engineers may conduct research and may contribute to the education of engineers, continual improvement in the practice of engineering.

Queensland Engineers registration.

The Board of Professional Engineers of Queensland (BPEQ) was established in 1929 under the original Professional Engineers Act (PE Act). The main purpose of the PE Act is the establishment of the regulatory scheme for engineers, known as the Registered Professional Engineer of Queensland (RPEQ) system, with the purpose to protect the public, maintain public confidence and uphold standards. The act is applicable to the fields of geotechnical, metallurgy and mining, wherein the AusIMM is the assessor. The AusIMM’s RPEQ assessment follows the same peer recognition and assessment of competence process as the Chartered Professional program. To register as a RPEQ, engineers must meet strict eligibility requirements. See https://bpeq.qld.gov.au/about-bpeq/our-role/ One pathway to Registered Professional Engineer Queensland (RPEQ) has opened with accreditation of Engineers Australia’s National Engineering Register (NER).

There are significant and varied legal obligations under the Professional Engineers Act. The BPEQ is active in enforcing compliance with the Professional Engineers Act (Qld) 2002, particularly in respect of registration, provision of services by unregistered interstate and overseas engineers, and supervision of unregistered engineers. Professional liability risk must also be considered.

In Australia, states and territories are responsible for statutory registration of engineers. Statutory registration ensures engineers meet professional conduct, education, training, and competency standards. The registration requirements are different for each state and territory. Professional engineers must register in each jurisdiction where they plan to practise. At present there is no simple cross state / country recognition of other government registration systems.

JORC & KCMI on Competent Person.

The Joint Ore Reserves Committee [JORC] 2012 (Australia) and Komite Cadangan Mineral Indonesia [ KCMI] 2017 (Indonesia) codes set out minimum standards, recommendations and guidelines for Public Reporting of Exploration Results, Mineral Resources and Ore Reserves in each country. These codes have been adopted by the several professional associations of each country. The principals governing the operation and application of these codes are Transparency, Materiality and Competence.

• Competence requires that the Public Report be based on work that is the responsibility of suitably qualified and experienced persons who are subject to an enforceable professional code of ethics (the Competent Person).
• Public Reports are reports prepared for the purpose of informing investors or potential investors and their advisers on Exploration Results, Mineral Resources or Ore Reserves.
• A ‘Competent Person’ is a minerals industry professional who is a Member or Fellow of the AusIMM, AIG,MCA (JORC), or IAGI, PERHAPI, ESDM AND IDX (KCMI), or of a ‘Recognised Professional Organisation’ (RPO), as included in a list available on the JORC and ASX websites. These organisations have enforceable disciplinary processes including the powers to suspend or expel a member. A Competent Person must have a minimum of five years relevant experience in the style of mineralisation or type of deposit under consideration and in the activity which that person is undertaking.

The Australian Stock Exchange (ASX) appendix 5A governs the use of the JORC code for reporting of resources and reserves to investors on the ASX. ASX Listing Rules 5.6, 5.22 and 5.24 and Clause 9 of the JORC Code 2012 Edition require that a Competent Person provide a written consent statement in particular circumstances. In 2003 The Australian Securities Exchange (ASX) introduced a procedure for identifying ‘Recognised Professional Organisations’ as accredited organisations to which Competent Persons must belong for the purpose of preparing reports on Exploration Results, Mineral Resources and Ore Reserves for submission to the ASX. [see; https://www.jorc.org/competent/ ]  Note that Indonesian professional associations are absent from this list.

The Indonesia Stock Exchange (IDX) in Regulation I-A.1, effectively from the 1st of November 2014, acknowledges the statement of mineral reserves signed by Competent Person Indonesia (CPI) working under the KCMI Code; where the statement of reserves is used as the basis for mining companies that intend to list their shares on the Indonesia Stock Exchange. Director General of Coal and Mineral, Ministry of Energy and Mineral Resources of the Republic of Indonesia, in his decree No. 569DJB / 2015, and 1806K/30/MEM/2018 requires, the reporting of exploration results, resources and mineral reserves to refer to the KCMI Code and be signed by CPI. The IDX and Ministry of Mines (ESDM) recognize the use of the JORC code.

The Indonesian Mines Department has introduced a number of regulations that requires geoscience professionals to register as Competent Persons with the Mines Department, in accordance with KCMI or SNI (Standard National Indonesia). In order for SNI to gain wide acceptance among stakeholders, SNI is formulated in compliance with the World Trade Organization (WTO) Code of good practice, namely: Openness, Transparency, Consensus & Impartiality, Effectiveness & Relevance, Coherence, and Development. This registration of professionals is such that the Mines Department can be assured of competency in the reporting of company’s annual work programs and budget (Rancana Kerja dan Anggaran Biaya– RKAB), along with on-line progressive performance reporting to the Mines Department [Minerba On line Monitoring System]. One method for the Mines Department to monitor competency and performance is through the Government Decree 1827 on Guidelines to Good Mining Practice (370 pages).

JORC discussion on Competency.

In March 2022, the JORC “joint task force” undertook a lively discussion amongst members on Competency and the Competent Person. The present version of JORC 2012 is now 10 years old and there is growing pressure from the Australian Securities and Investments Commission (ASIC), the body overseeing the ASX, for JORC to be updated in order to better protect investors.  ASIC is supportive of changes to self-nomination of competence, and various other aspects related to competency. It was noted that;

• JORC training programs are not a substitute for clear and enforceable competency requirements.
• That the present discipline system is not effective.
• Competent Person stretch is of growing concern, where one competent person signs off for a range of disciplines (from geology to tailings dams, environment, social etc). The new trend is looking to improve with a system of group sign off.
• There is concern that new influential Modifying Factors (such as Environment, Social, governance) may need their own enforceable professional codes.
• There is great variance in the quality of public reports.

The Joint Taskforce is reviewing options for improving the requirements to act as a Competent Person. This review shall include: 1) Scope to move from self-nomination to a more robust process. 2) competence verification and/ or accreditation process. 3) Disciplinary process, enforceability and transparency. There is also consideration for updating and broadening the scope of JORC code reporting guidance, and developing a new friendly digital platform. One new direction is consideration to include the concepts of Risk, Opportunities and Threats into the reporting code, that may help bridge the gap between investors and report authors. The present code lacks a requirement to report on reconciliation performance.

There is concern that a revised JORC code should consider that most JORC reports submitted to the ASX are from single geologists from small exploration companies, typically for Exploration Target or Resource Estimation. Big producing companies have more resources to engage a team of specialists.

The Joint Taskforce is considering Australia may follow other countries, and other Australian professions, in developing a Competent Persons public registration of geoscientists. This may have a wider influence on Professional Indemnity insurance, and on the encouragement of geoscience education in schools.

There are differing emphases in public reporting, wherein the geoscientist may focus on the technical content, often with a conservative element. The Director may want to emphasize the optimistic element. Competency is not fully correlated with investment failure. The revised JORC code should not be about catching poor performers, but about improving the communication between investors and competent persons.

Summary

The Indonesian governments academic recognition of geo-engineer’s competency is subject to a registration process. Queensland is leading other Australian states in having a separate state register of qualified engineers. These are separate to the independent professional institutions criteria for recognition of competence. The Indonesian KCMI acknowledgement of competence is via an elder’s formal review and transparent registration system. The Australian based JORC acknowledgment of professional competence is a “self-declared” approach that is now under review. The Australian engineering system also has higher level of registered “Certified Practitioners”. The Indonesian mines department has separately developed a national registrar of recognized competent engineers (including reference to KCMI or SNI standards) for submitting reports to the mines department. The Indonesian stock exchange will recognize JORC and KCMI code of reporting, though the ASX will only accept JORC code reports.

Conclusion.

In each of Australia and Indonesia there are multiple bodies for the recognition of professional competence in the geo-engineering fields. The science of geo-engineering is continually developing, and the public expectations from geo-engineers is also changing. Governments and industry are adapting in their own ways.

Indonesian and Australian geo-engineers are now able to undertake professional work in each other’s countries by complying with current local registration processes. It is hoped the IA-CEPA process will lead to an ease in undertaking international work for professional geo-engineers. It is hoped the JORC update program will be another step in easing geo-engineer’s ability to work internationally. 

Competency is not only about doing a good and honest job, but also about making professional decisions. The determination of resources and reserves is complex and unique to every situation. The JORC / KCMI reporting of resources and reserves are not calculations, but estimations at that given time.  Just to be clear, the various forms of government recognition of engineers should not be mistaken for competency under JORC or KCMI.