Minerals Report - International Seabed Authority

Ambassador Djalal informed participants that lately a lot of groups
within the country have submitted legislation to change this situation. He said
that the prevalent opinion is that the Government has far too great a role in
Pertamina, and that Pertamina’s monopoly of the oil and gas industry has to
be reduced. He pointed out that since most of the producing fields are located
in Indonesia’s provinces, another development has been that the provinces are
requesting a larger share of the revenues accruing from oil and gas
production. Ambassador Djalal said that the new legislation that has been
passed by Parliament gives the provinces fifteen per cent of the oil revenues,
and thirty per cent of the gas revenues. He pointed out however that the
provinces have asked for a larger share. He further pointed out that the
President of Indonesia, when asked by representatives of the provinces at a
recent news conference in North Sumatra, his opinion of the appropriate share
for the provinces, he responded that the provinces could get seventy-five per
cent of the revenues if that was their wish. Ambassador Djalal said that this
statement has created a tremendous problem in the country at the present
time. He noted that with a law having been passed in Parliament on the
appropriate share for the provinces, the statement of the President has created
problems for the central Government. Additionally, Ambassador Djalal noted
that the central Government has further problems with the provinces since
another law has been enacted giving provinces authority over natural
resources within twelve miles of their respective coastline. Ambassador Djalal
said that this drastic new law is scheduled for implementation in two years,
after regulations to implement it have been developed. He informed
participants that when the draft law was submitted to the Ministry for Oceans
Exploration and Fisheries, the Ministry advised Parliament that the Ministry
would support the devolution of power to the provinces, in only three areas.
These were for coastal zone management, control of land-based sources of
pollution, and protection of traditional fishermen and fisheries. Ambassador
Djalal said that the Parliament of Indonesia, being very apprehensive of
regionalism and of discontent in the provinces, where people were claiming
various rights in Parliament, or on the streets of Djakarta and in the media,
somehow agreed to give the provinces the authority over natural resources
within the twelve-mile zone. He said that this law has resulted in some of the
provinces claiming rights over oil and natural gas resources within twelvemiles
of the coastlines. He said that in one instance, a province is now
requesting control over oil and gas, and all other resources within the 200-
INTERNATIONAL SEABED AUTHORITY 872