INDONESIA Law and Practice Contributed by: Emir Nurmansyah, Mahatma Hadhi, Kenny Poltak and Atika Rizka, ABNR Counsellors at Law
Shift to Critical Minerals Indonesia aims to be a global manufacturing hub for EVs and their batteries by 2027. This direction brings more attention to critical minerals, such as nickel, cobalt and bauxite, as they constitute essential ele - ments in the production of batteries for EVs. This aligns with the 2020 amendment to the Mining Law, which brings a focus on “downstreaming” policy, where domestic refinement of minerals before export is required. With downstreaming, critical minerals such as nickel ore will be used for the production of EV batteries. ESG Principles as a Key Consideration ESG principles in the mining industry are increasingly becoming a key consideration. Global investors are placing greater emphasis on adherence to ESG stand - ards. Mining companies are also adopting sustain - ability initiatives. In practice, large coal and mineral producers, especially those marketing products to developed countries or listed on the Indonesian Stock Exchange (IDX), tend to prioritise ESG compliance, often demonstrated through independent audits such as those conducted by the Initiative for Responsible Mining Assurance. These companies usually disclose ESG-related information in their annual reports, as required by OJK (Financial Services Authority) regu - lations, reflecting a higher level of accountability and governance. Therefore, it appears that the initiative of adherence to ESG standards, especially internationally recognised frameworks, is primarily driven by market expecta - tions and global supply chain requirements rather than domestic regulatory obligations. 3.2 Climate Change Legislation and Proposals Related to Mining Indonesia does not have a mining-specific climate change law, but environmental and climate-related obligations are embedded in broader regulations. The Mining Law emphasises sustainable and environ - mentally conscious management of mineral and coal resources. It requires the government to prepare a national mineral and coal plan that considers environ - mental preservation and mandates that mining areas be designated in line with eco-friendly principles. Min - ing permits (IUPs) also impose obligations on compa -
nies to prepare environmental documents, conduct reclamation and carry out post-mining activities. Law No. 32 of 2009 further reinforces these obliga - tions. It introduces environmental economic instru - ments to control impacts, requires an AMDAL for activities with significant environmental effects, and mandates permits for managing hazardous and toxic waste (Limbah B3). In addition to these general laws, Indonesia has adopted climate-specific regulations. Presidential Regulation No. 110 of 2025 establishes the Carbon Economic Value ( Nilai Ekonomi Karbon ) framework and national greenhouse gas (GHG) emission control measures. It requires sectors, including energy and industry, to participate in mechanisms such as carbon trading to support climate change mitigation efforts. Supporting this framework, Minister of Environ - ment and Forestry Regulation No. 21 of 2022 sets out detailed procedures for implementing Carbon Economic Value instruments. The procedures cover measurement, reporting and verification of GHG emis - sions and outline carbon trading mechanisms. Togeth - er, these regulations form the backbone of Indonesia’s approach to integrating climate considerations into mining and related industries. 3.3 Sustainable Development Initiatives Related to Mining Good Mining Practice Good Mining Practice is governed by MEMR Regula - tion No. 26 of 2018 on the Implementation of Good Mining Practices and Supervision of Mineral and Coal Mining. This regulation establishes comprehensive requirements for mining companies, including the management of the mining environment, implemen - tation of reclamation and post-mining activities, and execution of post-operation measures to ensure sus - tainability and environmental protection. Mining companies are obligated to comply with these provisions throughout their operations. Compliance must be reflected in the annual work plan and budget (RKAB) prepared by each company, ensuring that environmental and operational responsibilities are
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