Indonesia on verge of major transparency initiative

Source: The Jakarta Post
Date: 8 Sep 2021

Indonesia has fulfilled all requirements to apply for the Extractive Industries Transparency Initiative (EITI), with the recent appointment of three regional secretaries from oil, gas and mining regions.

The initiative is the product of a multi-party international consensus between governments, extractive industries and civil societies to boost cash flow transparency in the extraction industries.

“All that Indonesia needs to do now is submit a formal letter signed by Coordinating Economic Minister Hatta Rajasa,” David W. Brown, a senior EITI adviser in Indonesia said.

He added that the three regional secretaries from East Java, East Kalimantan and Riau, including officials from various directorate generals connected to the mining industry, would represent the Indonesian government.

Representatives from civil society members and extractive company associations — including the Indonesian Coal Mining Association, Indonesian Mining Association, and Indonesian Petroleum Association — were also part of the Multi-Stakeholder Group, he said.

He said that although Hatta had not signed the formal request for candidacy since the team was formed in July, the elapsed time still fell within reasonable limits. “No expiration date exists for the requirements that have been submitted,” he said.

Ridaya Laodengkowe, an activist from Publish What You Pay, said that it would be advisable for the letter to be sent before the Idul Fitri holidays because the EITI board would enter a meeting session toward the end of September.

“We are hoping that the letter will be sent soon since the EITI board members are those who will decide about Indonesia’s candidacy,” he said, adding that two years had passed since activists campaigned for the importance of EITI candidacy among the extractive industries society in Indonesia.

The lengthy time span for meeting candidacy requirements, he said, was partly caused by the government’s difficulty in deciding on which of their agencies would represent oil, gas and mining districts.

Rezki Sri Wibowo, deputy executive director of Transparency International Indonesia, said that certain people considered EITI an internationally imposed initiative and resisted it as a result.

“Indonesians have a nationalistic sentiment toward the oil and gas industry, which they say is connected to security issues,” he said.

Ridaya said the government finally showed commitment to forward Indonesia’s candidacy in the initiative because they “saw a local and global demand for transparency”.

“They felt it especially when the Wall Street reform was widely discussed, in which increasing the transparency of extractive industries became part of the draft’s agenda,” he said.

The Dodd-Frank Wall Street Reform and Consumer Protection act in the US requires oil, gas and mining companies under the US Securities and Exchange Commission to publish their income, tax payment and royalties to host countries and the US government.