16.3.2022
EN
Official Journal of the European Union
L 88/65
4.4.3.
Findings of the investigation
(329) At the outset, the Commission observed that one exporting producer of SSCR purchased the nickel ore domestically from either related or unrelated companies to melt it and use it to manufacture SSCR products.
(330) The provision of nickel ore for less than adequate remuneration is one of the key measures implemented by the GOID in the context of the cooperation with the GOC in order to ensure the development of the entire industrial value chain of the stainless steel industry in Indonesia.
(331) In 2007, the GOID introduced Law No. 27 on Long-Term National Development Plan (‘RPJPN’) (72) for the period 2005–2025.
RPJPN placed the industrial sector as the engine of growth for strengthening the economic structure.
This was to be supported by, among others, the mining sector, including nickel ore.
Improving value addition in the primary sector, including mining, was highlighted as the main target to promote local and international competitiveness, and strengthen the national industrial base.
Value chain development through product processing and diversification (downstream development), structural deepening (upstream development), and vertical integration (upstream and downstream development) was expressly mentioned in the RPJPN.
The development of the manufacturing industry would be focused on subsectors that met several criteria, among others, process domestic natural resources and have export development potential.
(332) As described at recitals (317) et seq., in line with its objective to increase the value added of the minerals in Indonesia, in 2009 the GOID introduced the 2009 Mining Law.
Several implementing regulations, including a number of amendments, have been issued by the GOID in pursuing the goals of the 2009 Mining Law.
The 2009 Mining Law introduced a number of significant regulatory changes to the licensing system, royalties, foreign ownership and raw material exports.
In 2020, the 2009 Mining Law was amended via the 2020 Mining Law, enacted on 10 June 2020.
This new law, which is of limited relevance to this investigation as it was effective at the very end of the IP, confirmed or further extended certain requirements on mining companies.
(333) The 2009 Mining Law granted licensing powers to both the Central Government and the regional governments, depending upon the location of the mining area, the origin of the license, and the nature of the investment made by the mining company.
(334) The 2009 Mining Law introduced a new licencing system that replaced the old Contracts of Work (‘CoW’) scheme and the local Kuasa Pertambangan (‘KP’) or Mining Right system.
Under the new system there are two types of commercially important mining permits: a.
Mining Business License (‘IUP’) is a mining business permit required to conduct mining activities within a designated IUP area, which is divided into: (i) Exploration IUP which is valid for a maximum term of 8 years for metal minerals mines; (ii) Operation Production IUP (IUP-OP) which is valid for a maximum term of 20 years for metal minerals mines, specified non-metal minerals mines and coal mines, which may be extended for two additional 10 year terms.
The 2009 Mining Law thus provides assurance that holders of exploration permits will be granted production permits. b.
Special Mining Business License (‘IUPK’), is a special mining business permit issued by the MEMR for areas which have been deemed as State Reserve Areas, which is divided into: (i) Exploration IUPK which is valid for a maximum term of 8 years for metal minerals mines and (ii) Operation Production IUPK (IUPK-OP) which is valid for a maximum 20 years for metal minerals mines.
Under the 2009 Mining Law, an IUPK must first be offered through a tender to State or region owned companies.
If there is no interest from these parties then the IUPK can be tendered to the private sector.
IUPKs are issued for one specific mineral type only, and separate IUPs are required if another mineral type is to be extracted from the same permit area.
(72) https://perpustakaan.bappenas.go.id/e-library/file_upload/koleksi/migrasi-data-publikasi/file/RP_RKP/RPJPN%202005-2025-english.pdf