Headlines Observation on Coal Mining Activities Founded in Kompas Jan 26, 2010

It appears that Kompas Newspaper had made serious observations on the Coal Mining Activities in Kalimantan these last days from 25, 26, 28 30 January 2010. As a Business Lawyer who is advising Clients concerning Coal Mining activities in Indonesia, I really am interested in reading  such observation especially from the legal aspects. We are aware that there is the New Law No. 4 Year 2009 on Mineral and Coal Mining which was legalized on 12th January 2009. 

According to Kompas Newspaper dated 26th January, 2010,  The Minister of Forestry, Zulfikli said that 169 holders of the Mining Permit are naughty. They had mined in the Forestry Conservation Area. Each Provincial must owned Forestry Area with the area of 30%. If the Forestry Area is damaged according to Zulfikli quoted in the Kompas Newspaper,  they will face law.

Relating to the indication that the envirornmental damage is geered   by the Overlapping Permits issued by the Forestry Department and the Local Government, the Head of the Forestry Centre Information Masyhud MM  according to Kompas explained 3 matters:  

• Firstly, The Minister of Forestry pursuant to the rules had never issued the pinjam pakai (Lending use) of the Forestry Area to the Conservation Forestry Area. 
• Secondly, the lending use permit forestry area for the mining activities is granted to the extent  it is complying with the applicable rules. Therefore, not every Mining Authority which is issued by the Bupati shall obtain ithe zin pinjam pakai ( lend use permit).  
• Thirdly, the Mining Activities which is outside the forestry area is not the authority of the Minister of Forestry.      

Controlling Team 

According to Kompas the Controlling Team from the Environmental Department  is sent to South Kalimantan to solve the damaged terain/land resulted from the Coal Mining activities.  Eventhough major part of the Mining Authority Permit is granted by the Local Government, the Central Government can impose sanctions according to such Kompas news. Besides the Control Team sent by the Central Government, the Regional Control Team shall also be sent to clarify the damage of the enviromental resulted by the Mining is East Kalimantan.

Kompas quoted that Hermien as the Deputy Minister of Environmental   said that based on the Law No 32 Year 2009 concerning the Protection and Environmental Management (Perlindungan dan Pengelolaan Lingkungan) Article 77, the Minister of Environmental can impose  administrative sanction to the serious violators against the environmental protection and management.

The Coal Mining operation in South Kalimantan and East Kalimantan had left giant holes. These Giant Holes according to Kompas Newspaper dated 26 January 2010, is not only left by the Mining who owns the Mining Authrity Permit, but also by the holder of the  PKP2B  (Work Agreement For Coal Mining Enterprises).

According to Kompas, the data which are collected from Badan Lingkungan Hidup Daerah ( BLHD) (Regional Environmental Body of South Kalimantan) shows that the Mining Reclamation  Activities in South Kalimantan until October 2009 reached 3.132 Hectare from 20.000 Hectare opening Mine. The Reclamation is done by 16 Mining Companies holder of the  PKP2B  ( Work Agreement For Coal Mining Enterprises).  This means that there still exists 16.868 Hectares which Reclamation is not yet done. 





Kompas said as shown in page 15 of its Newspaper dated 26th January,  that acccording to the Head of  Badan Lingkungan Hidup Daerah ( BLHD) there are 2 Mining Holders of PKP2B  ( Work Agreement For Coal Mining Enterprises) who cannot afford to do the Reclamation, where Kompas mentioned PT Adaro Indonesia and PT Arutmin Indonesia.  The Head of  Badan Lingkungan Hidup Daerah ( BLHD) will restrain granting the AMDAL (Analisa Mengenai Dampak Lingkungan - Analysis concerning the Environmental Impact ) for increasing its coal  production of such company, if  there are no serious efforts to close such Mining Holes.  Kompas said that the Public Relation from PT Arutmin Indonesia had not yet received the explanation from its management relating to the non-performance of the Reclamation of the 17 Mining Holes. However, Kompas said that Arutmin as the Partner of the Government shall take notice of the guidance from Badan Lingkungan Hidup Daerah ( BLHD) (Regional Environmental Body of South Kalimantan).

According to Kompas  the Badan Lingkungan Hidup Daerah ( BLHD) (Regional Environmental Body of South Kalimantan) faced difficulties in getting the concrete data on the how much hoiles are left, since the Kabuoaten Government which issued such permit does not report to the Provincial Level. The manpower for controlling is limited upon the mining in such area.

There is also an indication that ther are Coal Mining Contractor in Kutai Kartanegara,  who does not provide  Reclamation Bond in the Mining Activities to the Local Government. However, the Company is still obligated to perform the reclamation upon the holes  which are finished being digged.


   

Analysis

Based on the above Kompas Oberservation, we can see that  there are sevral Siginifacant Issues that emerged :

 A. Overlapping Issues

a) The Overlaping implementation of granting  the  Lending Use of the Forestry  Area to the Mining Contractors, where there appears to be different of  policy between the Regional Government and the Central Government.
 b) Kalimatan seems to be rich of Coal Deposit and Coal Resources, for which for economic reasons Deleping and Mining such Coal Resources seems to be more attractive than keeping the place as a Forestry Conservation and Protection.
c) Thus there maybe a dilema situation faced by the Regional Government where they feel that Revenue for developing the Region is also considered important where the Resources of such Revenue are taken from developing and Mining The Coal Resources.

d) RECLAMATION 

• Relating to the  Reclamation, it appears that from the business side, Reclamation absorb Costs and expenses, and the Coal Mining Companies seems to avoid adding/ allocating the Costs /Expenses for Reclamation such Huges Mining Holes left after they completed their Coal Mining in such Area.   

•  We have to observe the Reclamation Rulings under the New Mineral and Coal  Mining Law No. 4  Year 2009 and we must also observed the Other Laws which are ruling such Reclamation issues which are associated to Mining Activities and Environmental Impacts due to the Coal Mining Operations, particularly relating to the Sanctions which may be imposed against the Coal Mining Companies if they fail to conduct such Reclamation Obligation..    

Observing Kompas news Concerning Coal Mining Activities in Kalimantan

I read in the Kompas Newspapers, the Indonesian Daily Newspaper 25 January 2010, Kompas had made some observations on the Coal Mining in East Kalimantan which according to Kompas is  annoying,   since the Mining Practice is not conducted properly. Kompas had made such observation in East Kalimantan and West Kalimantan, where according to such news paper the Massive Mining activities are  not -controlled.

According to Kompas Newspaper, the Taman Hutan Raya Bukit Soeharto (TAHURA - Forestry Park Mount Suharto) at Kaltim (East Kalimantan) and Forestry Protection Mount Meratus at East Kalimantan which is suppossed to be protected is not avoided from Coal Mining Operations.    

Kompas further said that at TAHURA, the land which are developed is actually part of the Center Research Tropical Forest University Mulawarman, Samarinda having the area of 40 Hectare.  The Developer /Management of PPHT according to Kompas Newspaper,  has no power since the Mining Permit is issued by  The Forestry Minister, with the reason that before the Decision of determining the border of the TAHURA by the Minister Decision No. 577 Year 2009, such location is located outside such Forestry Protection/ Conservation Area.    

One interesting news, shown in Kompas Newspaper is that 2 Contractors who are  supposed to develop House Glass Laboratorium at Telukdalam, Kecamatan Tenggarong  with the Area of 51,000 hectare, had developed Coal Mining after they realized and noticed  that Coal Deposit in such Area is plenty enough and good, without owning the Mining Authority.  

Furthermore in such Kompas Newspaper,  it indicates that on the Protection Forest not only there are plenty of owners of Mining Authority but there are plenty of big holes where the Coal had been completely mined. In such Location according to Kompas there exists 299 Mining Authorities, with the understanding that there are 299 Parties who are granted Permits To Mine Coal  at the Hutan Lindung Pegunungan Meratus      (Forestry Protection Meratus Mountain). Furthermore in such Newspaper it says that only few of those mining which request permit pinjam pakai ( borrowing use permit) of such forestry from the Minister of Forestry.

The other permit are being granted by the Local Bupati since they do not know that such location is within the Forestry Protection Area. According to the records of Kompas, during the last 6 Years (until 2009)  at 4 Provincial Area in Kalimantan there exists 2.047 Mining Authority. East Kalimantan according to Kompas  Newspaper is having the First Rank which issued Mining Authroity, that is 1.180 Mining Authority, followed by  Kalimantan Selatan (400-578), Center Kalimantan (427) and South Kalimantan (40).

According to Kompas, if one Mining Authority covers the area of 2.000 hectare, the location which had been dedicated for mining reached 4.09 million Hectare, which is more than the Area of  Kalimatan Selatan (3,75) hectare.     

Kompas says that the Governor of East Kalimantan cannot do much considering that the Minister of Forestry and Head Area Level II ( Bupati/Wali Kota) has the authority to issue the Mining Authority. It indicates that at the present moment in Samarinda around 70% of its Area (71.823 Hactare) is dedicated for Mining Area.

Kompas got the information from the Head of the RT, Kelurahan Sempaja Selatan , that the location of the living area is around 25 meter from the mining hole, resulting their  houses are frequently flooded. 


Farmers at Desa Separi (Village Separi) and Bangunrejo, Kecamatan Tenggarong  appears also to be affected since they failed to harvest their products due to the coal mining waste water  which entered into their rice field. This causes the farmer to sell their rice filed to the Mining Authority. The Sale price is high says several farmers according to Kompas Newspaper.

Several Rice Fields are sold by the Farmers to the Mining Authority holders and  converted to become Mining Area.

There are also many village roads which are curved - cut out  and developed to become Mining Area.  

Examples of such happening is at Kecamatan Siani, Kabupaten Tapin, where the inhabitants can no longer walk since part o the road had been changed into mining area. According to Kompas several of the inhabitants must be cautious upon the Project Vehicles,  where the inhabitants has to ask for permit to go across such location.

According to Kompas the changes of the Forestry had destroyed 7 - 12 ton of Carbon organic every Year. This Carbon is need by microorganisme for the continuation of the ecosystem. One of the sources being interviewed by Kompas said that the Coal Mining does not contribute much for improving the growth of such region. From the production value of Coal production Kalsel which reached 22 trilliun ( for production of 80-100 ton per year), the genuine revenue of the Region ( Pendapat Asli Daerah) does not reach Rp 1 trilliun.

According to Kompas despite the above, The Business of Coal Mining still said that what they had conducted provides positive effects. Mining absorb manpower and moved the inhabitant economy such as the emerging of warung (small shops) and living places. according to Maskur Achmad project Manager of PT Satria Bahana Sarana, a Coal Ming Contractor at Kecamatan Sangasanga, Kabupaten Kutai Kartanegara as quoted by Kompas Newspaper.              

         Analysis.

• Based on the above Kompas observation.,  we have to observe whether this Coal Mining Activities are in accordance with the proper standard operational mining procedures, to avoid disturbances felt by the people surrounding the area of such Coal Mining. 

• It also indicates that there are several overlapping mappings of activities between the Forestry Protection Area and such Coal Mining activities. 

•  Coordination between the Mining Directorate and the Minister of Forestry, the Bupati  and Governor have  to be intensified seriously. 

•  Socialization with the Local People are significant to be made by the Local Authority in coordination with several Departments concerned such as the Department of Directorate of Coal Mining,  Department of Forestry  and its subdivisions officers including Newspapers including the Coal Mining Rights and Authority pursuant to the Mineral and Coal Law No. 4 Year 2009
  

• INDONESIA: CONTRACT AWARD FOR PLANNED $137,000,000 COAL MINING PROJECT, CLOUGH ENGINEERING [AUSTRALIA] - Order #: 01732000.: An article from: WWP-Report ... & Plant Operations in the Developing WorldINDONESIA: CONTRACT AWARD FOR PLANNED $137,000,000 COAL MINING PROJECT, CLOUGH ENGINEERING [AUSTRALIA] - Order #: 01732000.: An article from: WWP-Business Opportunities in Asia & the Pacific     
  

Managing Your Cash Problems

When we are running our own Boutique Law Firm there are times that you have to seek  ways how to solve your cash flows. It is like other business, where you have to evaluate and start marketing yourself and shop around to your customers and show them that you are there to render the legal services which maybe required by your prospective client. Today I went to several of  my customers. After having been 11 1/2 years independent running my firm, now called Suleiman Agung & Co I realize that we have to manage your health and stamina in order for us to keep on  being independent as a Business Lawyer. Every institution or person regardless of the size of their firm, may  face some cash flow problem once a while  in their life time.

The significant element is that every person who are in this earth has a unique life experience where he or she has to struggle to keep on living. There is a motto : You are what you are. You are not changed by the outside infrastructure condition of your business, since the inner power is planted inside you by ALLAH The ALL MIGHTY and not outside you. Of course if you are lucky enough your outside infrastructure may be great. By becoming more old you tend to believe that every person has its own unique life journey, where he or she must  detect the best way to response every test or problem they are facing.

Yes, we really have to be honest and not run away from the problems that you are facing.  You have to have faith in life.You must be patient, tough and not easily surrendering yourself to  the down side  condition which you may face in your life. By writing in this Blog I am actually self talking to myself as a method to seek the answer which has to be  explored and founded by me in solving this cash problems.But talking to oneself is not enough. You must do the correct and  proper action to solve a certain unpleasant situation. 

There may be people who are lucky to succeed in their financial condition. During  the 11 1/2  years  being self employed,  there are some fruitful financial years but there are also some hard time in terms of cash in. Since you are conducting services done by  person, this really depends on the physical and stamina condition of your body. There is no free lunch in this world, nobody will help you but you yourself  has to rise back and take your grip and identify the action that has to be taken.

You must have gained lots of experiences during such time.Frankly speaking sometimes you feel really tired,  since there is no automatic continuous Clients who  always  use  your legal services. In reality there is no automatic on the air situation where Clients will always need your legal services. There is always a risk that you have to take and there are always the subsequent consequences you must face in the real life.  

You have to be really tough and patient. In terms of experiences of providing legal services I really have  a lot of experiences in rendering legal services  to various Business Clients. If you are running your own business legal firm, you have to remember that there are many competitors  who are also rendering  legal services that you are providing. So the competition is really tough, and networking might be a significant element.

One of the business strategy that I am doing as a Business Lawyer is writing legal aspects and your  real life experiences so that you can detect the phase of your life journey to cope with the problems, ups and downs of running you independent life as a Business Lawyer.

Legal Fee pricing of your legal services may also play a significant role, where frequently, Clients may request for a cheap and lesser price, which may be really hard for you to handle and manage your cash  flow.   It appears that Clients really do not care how your overhead expenses are. What they want is receiving legal services with cheap and lesser legal fee.These are my  cash flow experiences in running a boutique law firm in Indonesia now called Suleiman Agung & Co

I am not talking about theoretical cash flow here,  but really factual 11 1/2 Years experiences in running a self employ legal firm. Since I started from scratch and bottom rock, my only problem in running and continuing this self employ Legal practices is how to reduce my operational  expenses to enable balancing the cash in and cash out of my Legal Firm.

In terms  of rendering professional legal services, since I have 30 Years experiencing  working as legal professional Lawyer, I really feel confident in handling and providing the effective and efficient legal services. However in terms of cash flow I really have to combine the need of proper legal fee to cope with my needs  in maintaining healthy cash flows so that I can survive in feeding my family and the continuation of my self employ Legal Firm.                      

          

Legal Justice Versus Legal Certainty

The above issue appears to merge in Indonesia at this present moment. The people in Indonesia has the perception that the Legal Enforcement only applies to the powerless people. Whereas for the Big Powerful person or institution,  since they can hire Lawyers they feel that the are immune and untouchable by the law.

These perceptions was demonstrated by the Prita Case where a patient who makes complaint upon the hospital service through internet had been sued by the Hospital claiming that their good name was being damaged by Prita's writing in the Internet media.

There were 2 cases being filed, by the Lawyers representing the Hospital, one through the Criminal Court and the other through a civil claim. Initially the First Instance Court issued its Decision  against Prita where she was demanded to pay around Rp204 million to the Hospital. However, the public's Voices  through the support of the TV Media in Indonesia  had  made a protest against such verdict  by  collecting  coins to support Prita, where they succeeded in collecting  and raising around Rp600million. This is really fantastic amount which shows that the Indonesian People are voicing their rights for Legal Justice Treatment by the Court in Indonesia. In the progress the Criminal Court in the First Instance had rejected the Hospital claim.

This Coin Protest was actually a symbol of protest from the people against Injustice Court Treatment  that is felt  being imposed against the powerless  victims. Indonesia is a democracy society where we can freely make  protests against Injustice Legal Treatment felt by  the people being made by the Legal Institution in this Country of Indonesia.

Hospitals in Indonesia nowadays appears to be more of Commercial  rather than Social Institution, who must serve the sick people who needs medical care. Lawyers defending Hospital  against complain made by the patient must also be sensitive in handling cases like above. If there are complaints by the Patients,  the Hospital must actually appreciate such inputs for better services to its Patients. Eventually, in the progress after facing the public reaction,  the Hospital realize of their negative reaction,  for which  they  decided to revoke  their claim against Prita in the Court.

The above is really a good lesson for us  as Business Lawyers that we have to be sensitive upon issues relating to maintaining good services to its patients.     

Now Indonesia's Judicial Mafia Fight Gets Serious: SBY

----- Original Message -----
From: Loeky Harahap
To: fhui-70an
Sent: Wednesday, January 06, 2010 7:06 AM
Subject: [FHUI-70AN] Now Indonesia's Judicial Mafia Fight Gets Serious: SBY



President Susilo Bambang Yudhoyono on Tuesday stressed his resolve to purge the “judicial mafia,” calling on law-enforcement agencies to commit to the fight. To boost those efforts, he said he would demand bureaucratic reforms across 13 ministries and state institutions linked to law enforcement and governance.

“Remember, in the hands of corrupt law enforcers, anything bent can be straightened and the straight can be bent. I want judicial mafia practices to cease,” said Yudhoyono at the State Palace, while introducing the 2010 budgets for ministries, government institutions and regional administrations. Law-enforcement officials, whether in Jakarta or the regions, should not manipulate the law, he said.

The president named eliminating corruption in the judiciary as one of his top priorities when announcing the government’s first-100-day program in October. Last week, he formed a six-member task force to suggest ideas for eliminating graft in the country’s courts, considered to be some of Asia’s most corrupt. The task force met with leaders of the National Police and the Corruption Eradication Commission (KPK) on Tuesday to discuss the way forward. A high-profile feud between the two institutions brought judicial corruption into the political spotlight last year.


Task force chairman Kuntoro Mangkusubroto said the antigraft agency had vowed to help. “The KPK pledged to assist us through its facilities, such as its complaint-handling mechanism that enables people to report judicial mafia activities online and anonymously,” he said. Edward Aritonang, a spokesman for the National Police, said it was also forming a team to support the task force. “We leave everything fully in the control of the task force,” he said. The team would brief provincial police chiefs in Jakarta today, he added.

Yudhoyono also warned critics against judging his government’s success in fulfilling the pledges of its first-100-day program. On Monday, Coordinating Minister for the Economy Hatta Rajasa claimed, without offering evidence, that the government had completed 92 percent of its 100-day goals. “Although the government’s first-100-day program is important, it is impossible to contain all the development priorities and targets for five years. In addition, it is illogical to measure government success for the 2009-14 period by the first 100-day program,” Yudhoyono said.

But Ikrar Nusa Bakti, a political analyst at the Indonesian Institute of Sciences (LIPI), called the first 100 days “crucial,” saying success would boost public trust. “I’d say the success of the program is the embryo of the success of the government’s five-year program,” he said. Yunarto Widjaja, a political analyst at Charta Politika, suggested that ministers should not hesitate to admit failures. “They should convince the people that they will work harder to implement their programs,” he said. 

Yudhoyono said the economic achievements of last year made him optimistic his government could reach its 2014 economic goals: an annual growth rate of 7 percent, inflation of 5 percent, poverty at 8 percent to 10 percent, and unemployment of 6 percent. The economy grew by more than 4 percent in 2009. Inflation was 2.78 percent, the lowest in a decade.

Additional reporting by Antara


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Lawyer is like Artist

A Lawyer according to me at a certain level is like an artist. They tend to be freedom. Freedom to express their ideas and visions.  If the rules are  regarded as rigid, uncertain, unclear,   Lawyers must seek and  found a breakthrough or way out from such uncertain rules to solve the problem.

If  you are a Business Corporate Lawyers you tend to seek a solution to  make the business goal and achievement  met and be fulfilled. Well, my 30 Years of Experiencing as a Business Lawyer educates me that nothing in this world is perfect. Especially in Indonesia the product of Rules is actually a Political Product created by the House of Peoples Representatives which consists of members of the winning Political Parties and the Executives from the President together with its Ministers including the Departments headed by the Ministers.

Since all Departments have their interests in their respective fields, these Departments frequently  tend  to  only look from their own perspectives without viewing  other Departments view. These are  the reason why there  are lots of situation where  Overlapping and contradictory rules  occurs between one Department and the other Department  such as the Department of Forestry and the Department of Mining and Energy. You must also remember that besides the written rules there may also be Policies made by the Ministers of a certain Department which sometimes may need further clarification for the business players. We may also frequently found contradictory rules between the Central Governments and the Regional Local Governments in  this  Non-Centralize Era in Indonesia.  I believe that the Government and the Parliament knows about such problems which are usually expressed by the Business Associations representing the business players concern.

Well as a Business Lawyer you have to found out a way how to overcome such overlapping rules for the interest of creating certainty for your Clients business goals and objectives.

Experiencing Negotiating Joint Operation Agreement

As a Business Lawyer it will be really  interesting and exiting,  if you have the experience accompanying your Client in negotiating a Joint Operation Agreement (JOA) which are entered by the Participant Interests Holders of a Technical Assistance Agreement (TAC) in Indonesia. 

The position as a Business  Lawyer may be different from one case to another. If for instance, you are a Business Lawyer, who are representing your Client, who needs some additional investors to support its cash flows to perform the oil and gas operations as agreed upon under the TAC with BP Migas,  and decides to transfer or assign a major portion of its undivided interest under the TAC to a certain potential Investors, you may be in a position to be more of a listening and wait for the proposal of a draft JOA from such prospective Oil/Gas Investors.You may also submit a proposal of  the first draft to be further reviewed by such potential prospective oil/gas investors. Some significant elements which are usually touched in a JOA, when you just entered into a  negotiation are among others  concerning the issues describing or clarifying the purpose  the Parties entered into this JOA.

As we are aware in the Oil and Gas Business several Investors are involved into this venture since significant amount of Monies are involved where the Parties shall share the costs and expenses in such Oil and Gas Business Operations in proportion to the percentage of their Participant Interest Share. The operations usually involved activities such as  exploration, appraisal, exploitation, development, storage, production and disposition of Hydrocarbons from the Contract Area. There are operations that are being Jointly Operated in the sense that the costs shall be shared, this will be the Joint Operations.

However there are also circumstances where Only  a number or some of  the Participant Interest Holder  who  participates  in the operations,  which shall be usually called Sole Risk Operations.Thus in order to create a clear understanding between the Parties who intends to participate in the TAC , the Parties requires a separate agreement among themselves which is covered by this JOA. Accordingly  this JOA  is required to  regulate   the  rights and obligations of the Parties ( which does not include BP Migas)  concerning  the operations to be conducted under the TAC between the Signing Parties mentioned under the TAC as the Participant Interest Holder, who had signed the TAC with BP Migas. These  includes among others  the joint exploration, appraisal, exploitation, development, storage, production and disposition of Hydrocarbons from the Contract Area,  the decommissioning of  the joint property and conditions for carrying out Exclusive Operation in the Contract Area. 

This JOA shall usually be agreed by the Parties  as  the entire agreement between the Parties regulating  the terms and conditions between them related to the Joint Operations, unless there  exists other documents which are agreed by the Parties  to also also govern their agreements. The scope under the JOA may include the terms under the TAC between The Parties with BP Migas, but may also contain activities which are under the TAC but is not intended to be addressed in this JOA.

These for instance may consists of construction, operation, ownership, maintenance, repair and removal of facilities downstream from the delivery point, transportation of the Parties’ Entitlements downstream from the delivery point, marketing and sales of the Hydrocarbons and other issues which are  not intended to be addressed in such JOA.The Parties shall further specify the composition of the Participating Interests of the Parties. The composition of the Parties will play an important role in describing the portion of rights, obligations and liabilities.

The major portion holder of the Participant Interest under the TAC, shall usually be elected as the Operator of such TAC. If a Party transfers all or part of its Participating Interest pursuant to the provisions of this JOA and the TAC, the Participating Interests of the Parties shall be revised accordingly. The Parties will also regulate the terms which covers the rights, obligations and liabilities of the Parties, including any and all of the rights and interests in and under the TAC. 

The Parties will decide  which part of the expenses incurred by the Operator are being considered and be charged to the Joint Account and which are not. There will also be an Operating Committee (or Op Com) to be established by the Parties which will consist of each party’s representatives. The OpCom will  be the organ where the Parties or the Operator shall communicate upon the work program and oil and gas activities such as the Exploration program and Budget of Operating Costs which will be conducted in a certain running Calendar Year.

Thus,  before a work program is being submitted to BP Migas,  such work program will be first discussed and agreed upon through this Operating Committee mechanism. Frequently there will be instances, where Sole Risks Operations may be allowed to be conducted, if one of the party under the JOA decided to conduct exploration activities, which the other Party at such moment does not wish to participate.

If the results of such Sole Risks Operations happens to be a commercial field, the Non-Participating Party may participate, provided however, that on top of the Real Expenses and Costs which  had to be met pursuant to its portion of Participant Interest, such Non-Participating party has to pay and compensate a certain percentage payment.

Please note that the above items  are  not intended to be a legal advise nor legal opinion  in any form or manner by the Writer and thus shall not be used as a legal advise or legal opinion, but is merely intended to share information and experiences.    

Cheers 

Agung Supomo Suleiman

Law Firm Suleiman Agung & C0

Email : agungsuleiman@gmail.com

Mobile Phone : 0816830647