Differences Concept Legal Right Title Ownership Mineral Natural Resources Indonesia Versus other Countries

The rather Hot Issues being discussed involving General Mining Companies in Indonesia, are relating to the recent Government Policy and Rulings that General Mining Companies operating in Indonesia are no longer permitted to Export Raw Mining Ore,  but are obliged to processed their Raw Ore Mining Products to become certain Mining Processed Product  as determined by the Government of Indonesia through a Smelter Processing Plant  within the Indonesian Mining Jurisdiction Area.

The Target of this ruling is to create and develop Value Added to the Raw General Mining Products, before it is exported to outside of the Mining Jurisdiction of Indonesia. In order to boost the development of this Smelter Processing Plants in Indonesia, certain  interesting Incentives should be given to the Mining Companies, by the Indonesian Government. Accordingly, in reality,  there must always be a trade off to achieve the goals and target of a certain Government Policy to increase Value Added to the Raw General Mining Ores produced from the General Mining Territory of Indonesia. The financial conditions, weakness and strenghtness of a certain Country will surely influence the leverage of bargaining and negotiating such Host Country who invites Foreign Investors to be involved in extracting, exploring, exploiting and producing Mineral Natural Resources in such Host Country.       

Companies needs significant amount of Monies / Funds for investing in the construction of a certain  Smelter Plant Processor, and for sure there must also be a certain long term agreement,  between the Smelter Processing Plant and the Mining Companies who are ordering such Smelter Companies to process their Mining Raw Mineral Concentrate  Products, to enable the Smelter Companies to get a high commercial  and quick return of their Investment in building this Smelter Processing Plant.  

For example if we talk about PT Freeport Indonesia (PTFI), who is conducting General Mining operations in Indonesia, than based on Article 10 paragraph 5 of  PT FI Contract of Work ("PT FI's COW"), it regulates that the Company (PT Freeport Indonesia ("PT FI") acknowledges the Government's Policy  to encourage the domestic processing of all of its natural resources into final products where feasible. The Company further acknowledges the Government desire that a copper smelter and refinery be established in Indonesia and agrees that it will make available copper concentrates derived from the Contract Area for such smelter and refinery so established in Indonesia as provided below.     

.......In the event that during the five period commencing on the signing of this Agreement, a copper smelter and refinery facility to be located in Indonesia has not been established or is not in the process of being constructed by any Person, the, subject to the mutual determination by the Government and the Company as to the economic viability of such smelter and refinery, the Company shall undertake or cause to undertaken the establishment of a copper and smelter refinery  in Indonesia to comply with the Policy of the Government.

As implementation of this provision,   PT FI through its affiliates PT Smelting Gresik in Surabaya had constructed the Smelter Processing Plant,  whereby Mitshubishi Materials owned 60.5 % and PT FI  owner 25%, Mishubishi Corporation 9.5% and Nippon Mining and Metals Co owned 5% of the Equity/Shares issued by PT Smelting Gresik. Chiyoda had constructed this Smelter Plant Facilities in the amount of USD 500 Million.

The feedstock smelter is shipped from Freport Grassberg which distance around 2,600 Kilometer from the Smelter Facilities which is closed to Petrokimia Gresik, a Government Fertilizer, who used smelter sufuric acid, and this was the prime reason why the Smelter Gresik was build in this Location.http://www.mmc.co.jp/sren/Gresik.htm The copper smelting and refining complex consists of the smelter itself, which produces copper anodes and process off-gasses high in SO2, the sulfur acid plant, the tankhouse and any other infrastructure within the Site Boundary, including waste water plant, jetty and wharf and material handling facilities.

We observe that Gresik Smelting Facilities processed 40% of PT FI Copper Mining  products output, while the remaining  60%  of PT FI's contrates output are exported,  In implementing this provision of the COW,  Mitsubishi together with PT Freeport Indonesia had developed PT Smelting  Gresik in Gresik Surabaya, in the Year 1997, operated by PT Mitsubishi and PT FI, whereby a certain long term agreement between PT Freeport Indonesia as a General Cooper Mining Company and this Gresik Smelter Processing Plant to process the Cooper Mining Product to produce copper cathode.  PT Smelting Gresik takes in  40 % of PT FI output and export the remaining 60% out-put of PT FI's raw concentrate ore.

In the recent latest progress, PT FI had halted the production of concentrates since February 10, 2017 waiting to receive the Export  Permit  from  the Government of Indonesia to export  ores  and concentrates.We observe that PT FI will only be allowed to Export such Concentrate Ores if  PT FI agree to convert the COW into IUPK (Particular Mining Business Permit). As we understand the Government of Indonesia had issued new regulations, among others the Presidential Decree No.1 Year 2017, whereby these New Regulations permits the continuation of copper concentrate exports for a five (5) Year period through January 2022, subject to certain pre-conditions  to be fulfilled by the Mining Companies operating in Indonesia.

Well, in reality, PT FI as other business Mining Companies, are focusing more on the Profit oriented approaches, whereby the Government of Indonesia, has the more broader and wider task  to Optimize, manage and ensure that the remaining National Resources owned by the People of the Republic of Indonesia are being extracted, explored, exploited and produced for the Most Beneficial Interest to increase and guarantee the Social Welfare of the whole entire people of the Republic of Indonesia.

In other words  each and every step taken by the Government of Indonesia represented by the President as well as the Ministerial level of  the Energy and Mineral Natural Resources Department ("ESDM") are to be taken  for the National Interest of the Republic of Indonesia,  particularly to gain more Added Value of the Mineral National Resources as the National Asset of the Republic of Indonesia.

In this Open, Transparency, Democratic Area, the entire people of Indonesia are controlling, monitoring each and every step and action taken by the Government, the People's Representative in the Parliament (DPR)  in managing, developing, and making policies and rulings on the Mineral Natural Resources, which based on the Basic Principals under the Indonesian Constitution Basic Law, which is Article 33 (3) of the Undang-Undang Dasar 1945 (the 1945 Basic Law Constitution), such  Remaining Mineral National Resources, which are owned by the People of the Republic of Indonesia, must be managed, developed, produced   for the Social Welfare of the Entire People of the Republic of Indonesia.

This concept of Mineral Natural Resources Title Ownership being posses and owned by the People of the Republic of Indonesia, differs from the concept of Legal Title Ownership on the Mineral Natural Resources, adopted by several Western  Countries, whereby Individual or Private company (ies)  are given  the Legal Right Title Ownership on the Mineral National Resources found, extracted  in the location under or below the Surface Land owned by the Individual or Private Company (ies) in such specific country.

This difference Concept of  Mineral Natural Title Ownership, for sure creates differences of policies and rulings taken by the Government and Legislative in approaching,  handling,  managing the exploration, exploitation and producing of the Mineral Natural Resources between Country to Countries. Accordingly, General Mining Investors who are interested to Invest their Mining Business in Indonesia must be fully aware of this Differences Concept, especially in this New Transparent, Openness, Democratic  Era occurring in Indonesia, for which for sure National Interest will also play a significant important role in shaping the trend of Policies and rulings in the Mineral Natural Resources Sectors.

Jakarta, 15 April 2017
Agung Supomo Suleiman
Independent Business Lawyer's View  

Snapshot Artikel Hukum AgsS Law 

                 

   

   

ALWAYS THANKFULL to ALLAH the Most Merciful

Hi Folks, without us being aware, with the Blessings of ALLAH the Creator of this World that we lived in, we are being permitted  to be still alive and can enter the New Year 2017. We really have to be thankful to our Creator ALLAH  that we are allowed to be still alive, which for sure must have some real significant reasons why ALLAH is still permitting us to be still alive in this Beautiful and wonderful world that we lived in. 

• By being permitted to practice  in the professional life carrier as an Independent Business Lawyer (Self-Employed) by ALLAH, for more than 18 Years, since 1st of June 1998, which formerly was allowed by ALLAH  to experienced blended combinations as Company Man - In-house Legal Counsel for more than 17 Years, in the Law Firm of Adnan Buyung Nasution & Associates (Nasution Lubis Hadiptranto) 5 Years, Vico Indonesia (Huffco Indonesia) 5 Years, PT Freeport Indonesia Company 5 Years,  accumulative,   the Writer of this BLOG,  must  always continuously keeping reminding  himself, to always allocate part of  his  daily 24 Hours time to read the Holy Al Quran, at least  1(one) ayat, a day Insya ALLAH, so that Insya ALLAH with the permit of ALLAH, we are guided by the Creator ALLAH to be on the Right Straight Path as been shown by the Prophets, during their period, as recited in many Surah of the Holy Book Al Quran  

• Yes as a Moslem believer (meaning surrender and worshiping only to ALLAH, the Only One Creator of this Live), we must force ourselves to seek Enlightenment from  the Creator of this Universe, by reading the Holy Book, particularly as a Independent Business Lawyer, where we are dealing with different of interpretation in implementing the Agreements involving Business Aspects between the parties involved in such Contractual Business Transactions 

  We have to always remember to put faith in our Heart (Qolbu), by filling our Qolbu with the Holy Words of ALLAH recited in the Holy Al Quran, which    was sent down by ALLAH  to ALLAH's Messengers called the Prophets or Rasul of ALLAH continuously; 

• Praised be to ALLAH that, the Writer of this Blog  was permitted by ALLAH to practice his profession  as a Business Lawyer for more than 35 Years since the year around 1979, and the Writer of this Blog, keeps on focusing in practicing his Professional Carrier as an Independent Business Lawyer. With the Blessings of ALLAH, he is permitted to practice his Professional, by serving Clients in the Business Circles related to Natural Resources, which includes Copper, Oil, Gas, Mining Minerals, Iron, Gold, Coal, Iron, Limestone, Bentonite,  and recently assisting Client involved in the Drilling of Production Wells of Geothermal and Injection Wells.    

• His motto in running his Professional Carrier,  is striving to develop  in Believing and  maintaining faith to ALLAH as the Creator of this World. You can imagine the Temperature Heat Decree being tapped and captured in  the Geothermal Production Wells can reach 270 Degree, which can boost turbine to generate electricity.  The potential magma from the earth can boiled the water which was sent down to the earth by the Creator of this World from the sky through the mechanism being vaporized by the Sun of the Sea Water and collected as Clouds, and poured down  to the earth, and  become hot steam  to be used for energy in many ways. 

• If you are practicing as a Professional, are you practicing it in accordance with the guidance and enlightenment from the Holy Books ?   Do we practiced our Professional by suffering or disadvantaging or making loss to others ?   Those are some of the tough Questions that we have to answer to the Creator  of this live and the Creator of us human beings.  Of course for sure this "faith" issue is the element of "Faith" or we called it "Iman" in the Holy Book of Al Quran, where with the permit of ALLAH, if we seek the Truth Guidance from ALLAH, based on Allah's words we can be guided by ALLAH to build and develop our Faith in believing ALLAH as the Creator of this World  where we lived in until when the times comes to an end to each of us.       

 Jakarta, 16 th January 2017
Agung Supomo Suleiman
Independent Business Lawyers  

                 

EXPERIENCING TEAM SURVEY DOING CONSTRUCTIONS BUSINESS IN UAE

Well Folks,  it has been over more than 18 Years since 1st June 1998, when Indonesia was hit by the Economic Crisis, that the Writer of this Blog as an Independent Business Lawyer had jumped - up from the "Certainty World" to the "Uncertain World", being self-employed which is really challenging and exiting,  because during his  18 Years Life Journey as a Self-Employed - Independent Business Lawyer  using Brand Name AgsS Law - or sometimes SACO Law the abbreviation of  Suleiman Agung & Co,   you are not sure what will happen to you in the life journey ahead of your professional carrier,  from year to year life journey.

At one time you are busy and buried  with your work load, but at another point of time,  you may be  wandering as to whether there will be another Business Project which requires your professional Legal Services relating to the Legal Aspects surrounding such Business.

 At one time the Writer of this Blog  as an Independent Business Lawyer by the permit, blessing and merciful of ALLAH,  had been appointed as one of the member of a Survey Team to conduct research and for collecting the necessary  construction business information in the United Arab Emirates (UAE) to explore Doing Construction Business work in that part of the Middle East Countries. The main significant purpose of the research was among others  gathering all the necessary data and business information on Doing Construction Business in United Arab Emirates. The research was done for around 14 Days, where as the result of such Research, we managed to gather significant Information and resulted making the Booklet called Doing Construction Business in United Arab Emirates.The work was solely done to enable the Indonesian Construction to pursue business in UAE.

During the time the research was conducted, the Active Construction Crane in the World was 25% (Twenty Five Percent) occurring in that Part of the World, which for sure would attract all Constructions Companies to get  part of the Construction Project in UAE. We also gathered information that 1 (one) Ton out of the 8 (eight) Ton of Gold Worldwide being sold in the Market Place was happening in Dubai during that period of time. Amazing isn't. We had met the Abu Dabhi Chamber of Commerce and Industry, the UAE Ministry of Public Works, Ministry of Labour and Social Affair, The Department of Economic Development of Dubai as well as privates institutions of investors, consultants including several reputable companies such as Isthitmar, United Eastern Group, Bloke Stone Investment Consultants Co LLC-Abu Dabhi, Bin Laden, MCM and other investors and consultants and architect including the Indonesian Engineers and Architecs who are working in the multi national Company in Dubai. We really gather significant information and data from all those Officials and Investors, which enable the Survey Team to assist the Indonesian Government particularly The Ministry of Public Works to produce the relevant booklet to be used as an  initial guidance by the Indonesian Construction Companies to conduct their business in UAE.          

That was part of the experience that the Writer was involved in getting the significant data relating to the Construction Business in United Arab Emirates, where the writer was being one of the Editor of such Booklet to be used by Indonesian Companies such as Construction Companies, Architect who are interesting to explore doing construction business ventures in that Part of the World, where the Indonesian Government had really  encouraged the Indonesian construction to enter the market with diligent and good preparation to enable them to venture and pursue construction business opportunities abroad particularly in UAE. The understanding of the political, economic, social, legal and cultures systems and related significant business practices are of important step for those Indonesian Companies who are interested to penetrate their business construction abroad.

Well, the above Life experience, which  the Writer was engaged and involved,  really contributed in expanding and developing  our mind to be more active in our efforts to contribute to the development and growth of the Business Players in this  Country to be able to participate locally and internationally. In ending this writing, the Writer wanted to dedicate this Writing to one of the Survey Team member who had passed away, namely Pak Wahyu Prapto Yuwono, which in the above photo was on the very left side, where we all pray to ALLAH the Al Mighty,   asking  that his  contribution and dedication as member of the Survey Team in enabling the Booklet Doing Business In United Arab Emirates, will be accepted and regarded by ALLAH as his good deeds to the Construction Business Society in Indonesia as well as in UAE, Aamiin YRA. 

Jakarta, 10 September 2016
Agung Supomo Suleiman