Minerals Report - International Seabed Authority

SUMMARY OF THE PRESENTATION AND DISCUSSIONS ON INDONESIA’S
OFFSHORE MINING POLICY AS IT RELATES TO EXPLORATION AND
EXPLOITATION OF OIL AND NATURAL GAS.
Ambassador Djalal, Special Advisor to the Indonesian Minister for
Oceans, Exploration and Fisheries informed participants that his presentation
would be on Indonesia’s offshore mineral policy with a focus on the oil and
gas industry.
He described Article 33 of the Indonesian constitution as fundamental
to activities in the sector, and said that this article indicates that the economy
of Indonesia is based on the principle of kekeluargaan or the principle of
commonality. He said that the article provides that the vital sectors of the
Indonesian economy are to be controlled by the state, which is of course
somewhat different from the old system, which was the basic western system
of economy. By giving the state control of all sectors of the Indonesian
economy, Ambassador Djalal said that all factors that control the lives of
common people are protected.
Ambassador Djalal said that the second basic principle guiding the
sector is the Archipelagic state principle. Ambassador Djalal said that when
Indonesia declared Independence, the territorial sea was three miles with the
high seas adjoining it. He observed that at the time, there were no clear
provisions on who controlled the mineral resources in territorial seas or
beyond. He said that upon Indonesia’s declaration of the Archipelagic
principle in 1957, it also declared that all the resources within its Archipelagic
waters are part of Indonesian resources and therefore controlled by the state
of Indonesia. Later, Ambassador Djalal said that the declaration was enacted
into Law number 4/1960.
Ambassador Djalal said that the third point about Law number
44/1960 is that it provides that all mining areas for oil and gas in Indonesia are
reserved for Pertamina. He described this law as facilitating Pertamina’s
monopoly over oil and gas in Indonesia. He said that this law covered all
INTERNATIONAL SEABED AUTHORITY 870