Hardship and battle against Covid-19 did not dissuade the Indonesia House of Representatives (DPR) to swiftly complete the long-awaited revision to the Law No 4 of 2009 (“Mining Law”). Precisely, the Law No. 3 of 2020 concerning the amendment to the Mining Law has been published and effective as of 10th June 2020 (“Amendment”).

Ongoing challenges suffered by the industry, inconsistencies, conflict authorities between central and regional government, market volatility, the state interest and benefit for the country and intention to improve governance in extractive industry were major drives to issue this Amendment.

The selected key points under the Amendment to the extent of its consequences to the mining business, include the reform of the licensing system whereby the system is now centralised such that eliminating the authority of the regional government. There are also various incentives for mining operators and junior mining companies as well as the holders of Contract of Work (CoW) and Coal Contract of Work (CCoW) granted in the Amendment. The Amendment gives a lot of highlight on the CoW and CCoW, therein it grants necessary business certainty and smooth transitioning into the IUPK licensing regime. The Amendment also reiterate divestiture obligation of foreign ownership in a mining company down to 49% and impose new obligations to all miners such as allocation funds for community development program, yearly budget allocation for exploration program and resilience fund. The details of the provisions of this law will be regulated in the implementation regulation which shall be prepared by the government within a year of this Amendment.

The encouragement and incentives for the mining industry under the Amendment is aimed to invigorate the uncertain investment climate that has weakened an already glob-ally depressed industry. Not only to achieve the aforesaid objective, the Amendment is also purposed to improve the mining governance in Indonesia so that the objective to manage the mineral and coal resources based on the principles of accountable, for the nation’s interest as well as sustainable and environmental soundness may eventually be achieved.

While the Amendment is a step forward towards a good mining governance, neverthe-less, there remains uncertainties, controversies and flaws in the Amendment that might lessen the effectiveness and objective of the law. Hopefully the implementation regulation to be issued within a year of this law can help the nation accomplishing its mission.