Environmental Law and Sustainable Natural Resources Exploration & Exploitation

The Mining sector (Minerals, Coal, Oil, and Natural Gas) has shown resilience despite the turbulence caused by the revocation of 2,078 Mining Business Permits (IUP)

Overview

The Mining sector (Minerals, Coal, Oil, and Natural Gas) has shown resilience despite the turbulence caused by the revocation of 2,078 Mining Business Permits (IUP) by the Minister of Energy and Mineral Resources / Minister of Investment / Head of the Indonesia Investment Coordinating Board—later gradually reduced to 2,051 revoked IUPs, and based on the latest data as of November 2024, an additional 596 IUP revocation cancellations were issued. According to data from the Ministry of Finance, the Mining sector remains one of the largest contributors to state revenue in the 2024 State Budget (APBN).

Although the sector experienced its deepest contraction of 58.2% in early 2024—compared to its 51.7% growth in the same period of 2023—primarily due to declining commodity prices, the Mining sector rebounded significantly in the second semester of 2024. (Sources: cnbcindonesia.com, 14 November 2024; ikpi.or.id, 12 December 2024; news.ddtc.co.id, 8 July 2024).

The state’s strong reliance on revenue from the Mining sector creates a dilemma, as the Mining and Energy sectors—particularly fossil fuel–based power generation—are major contributors to greenhouse gas emissions. Indonesia has taken concrete steps to reduce emissions while maintaining the sustainability of the mining sector and preserving state revenue. These measures include energy transition efforts, shifting from fossil fuels to renewable energy sources. This transition is crucial for mitigating emissions from fossil fuel use. Biomass-based energy is considered a viable alternative due to Indonesia’s vast forest resources, which store a significant amount of carbon.

Indonesia’s forest vegetation generates biomass levels far exceeding other Asian countries and accounts for nearly 20% of the total biomass in all tropical forests in Africa. In early 2024, the Government enacted Presidential Regulation No. 14 of 2024 concerning the Implementation of Carbon Capture and Storage Activities. The Regulation aims to provide a legal foundation and certainty for all parties involved in emission-reduction activities, supporting Indonesia’s commitment to achieving Net Zero Emissions by 2060.
Indonesia is also promoting the growth of the electric vehicle industry by supporting the transition from fossil-fuel vehicles to electric vehicles through various incentives and regulatory facilitation. These transition initiatives continue to open new opportunities for emerging industries.

The utilization of natural resources must be conducted responsibly and in accordance with applicable laws. Every exploitation activity must consider usage needs, maintain reserves, ensure balance, and preserve sustainability. We provide comprehensive legal opinions and legal safeguards for every transactional decision you make. Over the years, we have built an extensive network of domestic and international companies operating in the Mining, Forestry (including Plantation), Marine, and Fisheries sectors—both in direct production operations and in supporting industries such as financing, heavy equipment leasing, raw material processing, transportation, and sales.

Our Services

Assisting clients with obtaining Mining Business Permits (IUP) and Mining Services Business Permits (IUJP) at all stages of mining: general investigation, exploration, feasibility studies, construction, mining, processing and refining, transportation, and sales. Assisting with supporting permits and requirements, including Forest Area Borrowing and Use Approval (PPKH), Corridor Road Use/Construction Permits, Environmental Impact Assessment (AMDAL), Reclamation plans, Work Plan and Budget (RKAB), etc.
Contracts & Transactional Arrangements:
- Drafting/reviewing cooperation agreements with IUP and IUJP holders. Drafting partnership agreements with individuals (mining experts). Drafting/reviewing agreements for heavy equipment leasing/purchasing and mineral production sales.
- Advising on the selection of business structures—for example, the establishment of Joint Operation (KSO) schemes. Due Diligence & Corporate Compliance
- Conducting background checks of potential business partners*, including preparing Non-Disclosure Agreements (NDA).
- Managing and monitoring OSS Risk-Based Approach (OSS RBA) accounts, Minerba One Data Indonesia (MODI) accounts, and other regulatory platforms.
- Land acquisition, project restructuring, and funding support.
- Assisting with corporate actions, including preparing pre-amendment corporate document requirements (shareholder changes, capital structure updates, Board of Directors/Commissioners changes) requiring prior approval from the Ministry of Energy and Mineral Resources (when applicable).
Internal corporate support related to legal dispute resolution (criminal, civil, administrative courts)
We also provide legal services including, but not limited to Fisheries Sector, Permits for Fishing Business License (SIUP), Fishing Permit (SIPI), Fish
Carrier Vessel Permit (SIKPI), Sailing permits, seaworthiness certifications from the Fisheries Supervisory Agency, and other operational licenses. Oil and Gas Sector, Drafting/reviewing cooperation contracts in the Oil and Gas sector, including Production Sharing Contracts (PSC) and other operational agreements. Processing licenses for Processing business, Natural gas transportation via pipelines, Natural gas storage, Natural gas trading via pipelines, Forestry Sector, Permits including Timber Forest Product Utilization Permit (IUPHHK), Non-Timber Forest Product Utilization Permit (IUPHHBK), Timber Forest Product Harvesting Permit (IPHHK). Plantation Sector, Plantation Business Licenses, land acquisition, and related permits. Marine Sector, Permits for Seawater Space Utilization, Marine Resource Use Licenses (e.g., marine tourism), Carbon Capture and Environmental Restoration Legal assistance for Ecosystem restoration projects, Indonesia National Carbon Exchange proposals, Carbon capture activities, Voluntary carbon trading, Foreign carbon trading requirements.

Experience Highlights

Represented a client—holder of a Nickel Production Operation IUP—in a civil lawsuit filed by the Ministry of Environment and Forestry of the Republic of Indonesia concerning alleged environmental damage, with total claimed losses of approximately IDR 50 billion (ecological loss, economic loss, and environmental dispute verification costs). The client won the case with a Niet Ontvankelijke Verklaard (inadmissible claim) decision.
Represented a Nickel Production Operation IUP holder in a criminal investigation for alleged unlawful use or occupation of forest areas by a corporation. The allegation was proven unfounded.
Represented a Quartz Sand Production Operation IUP holder in drafting a production financing cooperation agreement with an investor, including transportation and sales schemes through subsidiaries and/or affiliates.
Represented a palm oil plantation company in Tanjung Jabung Timur, Jambi Province, in a criminal case under Article 99(1) of Law No. 32/2009 on Environmental Protection and Management relating to forest and land fires (KARHUTLA). The corporation faced potential liability for exceeding environmental quality standards, with a possible fine of IDR 2.5 billion. The client was successfully acquitted (vrijspraak).

Need More Information? Learn more about our Environmental Law and Sustainable Natural Resources Exploration & Exploitation Services by sending us your inquiry. We will contact you as soon as possible.