Mining 2026

INDONESIA Law and Practice Contributed by: Emir Nurmansyah, Mahatma Hadhi, Kenny Poltak and Atika Rizka, ABNR Counsellors at Law

The cost management of the community development and empowerment programme must be directly man - aged by the mining companies. If there is any increase in production capacity, the mining companies must increase the amount allocated for community devel - opment and empowerment. If the funds allocated for the community development and empowerment pro - gramme are not utilised within the current year, the unutilised amount must be carried forward and utilised in the following year. Further guidelines on preparing the community devel - opment and empowerment programme are set out in MEMR Decree 1824 K/30/MEM/2018 on Implemen - tation Guidelines for Community Development and Empowerment. 2.4 Prior and Informed Consultation on Mining Projects As part of the process of preparation of environmental documents, the mining companies are obligated to hold a meeting with indigenous people on the impact of mining activities on the environment. Pursuant to GR 22/2021, following such meeting, the impacted community is entitled to submit suggestions, opinions and responses to the proposed mining activities of the mining company. Such suggestions may encompass: • descriptive information regarding environmental conditions within and around the proposed mining activity; • local values that have the potential to be affected by the proposed mining activities; and/or • public aspirations, wishes and expectations in rela - tion to the proposed mining activities. The suggestions, opinions and responses from the community must be incorporated by the applicant in the terms of reference of its environmental document. Other than this, there is no provision under Indone - sian mining regulations that specifically requires prior and informed consultation of the local community in regard to mining activities. However, Indonesian min - ing regulations do stipulate the obligation to involve local communities and indigenous peoples located within the mining area in a mining company’s com - munity development and empowerment programmes.

The MEMR has not yet issued any further implementa - tion regulations relating to this obligation. 2.5 Impact of Specially Protected Communities on Mining Projects Indonesia recognises the rights of indigenous and tra - ditional peoples, known as Masyarakat Hukum Adat or “MHAs”. MHAs are defined as Indonesian citizens who have distinct cultural characteristics, live together according to their customary laws, have ancestral or territorial ties, maintain a strong bond with the land and environment, and follow traditional values that shape their economic, social, cultural and legal sys - tems, having used a specific area over generations. The rights of MHAs are recognised in the Constitu - tion of the Republic of Indonesia, which states that Indonesia acknowledges and respects customary law communities and their traditional rights as long as they remain alive and align with societal develop - ment and the principles of the Republic of Indonesia. Indonesia also recognises the concept of Customary Land ( Wilayah Adat ) and Customary Forest ( Hutan Adat ), which MHAs hold the rights to manage and utilise. Although there is no specific regulation mandating for - mal settlement agreements, the constitutional protec - tion given to indigenous and traditional communities means that any activities, such as mining operations, that may affect their rights, including land acquisition, generally require consultation and settlement with the relevant indigenous and traditional communities. 2.6 Community Development Agreement for Mining Projects Indonesian mining regulations do not expressly require mining companies to enter into a formal agreement with local communities with respect to social devel - opment. In practice, instead of entering into a formal agreement, mining companies typically provide their commitment to community development by prepar - ing and implementing community development pro - grammes.

192 CHAMBERS.COM