Law No. 30/2007 on Energy

Article 3 In the frame of supporting the sustainable na- CHAPTER III tional development and improving the national energy ENERGY ARRANGEMENT tenacity, the objectives of energy management are: Part One a. the achievement of independence in energy man- [nelgy Re5UulI:.es agement;

Article 4 b. the security of domestic energy availability, both from (l)Energy resources offossil, geothermal, big scale hy- domestic and overseas sources. dro ana nuclear energy SOUrces are controlled by the state and utilized for the maximum welfare of the c. the availability of energy sources from domestic and/ people. or overseas as referred to in point b for: 1. the fulfillment of domestic energy needs; (2)New energy resources and renewable energy re- 2. the fulfillment of domestic industrial raw material sources are arranged by the state and utilized for needs; and the maximum welfare of the people. Business News 7609-7610/1-9-2008 (3) The . lOA (3)The control and arrangement of energy resources (3)Further provisions on the energy price and subsidy by the state, as referred to in paragraphs (1) and (2) fund, as referred to In paragraphs (1) and (2) are are organized by the government according to the arranged by the statutes' regulations. statutes' regulations. Part Five Part Two Environment and safety Energy Buffering Reserve Article 8

Article 5 (1 )Any energy management activity is obliged to priori- (I)To secure the national energy tenacity, the gov- tize the usage of environmental friendly technology ernment is obliged to provide energy buffering re- and meets the terms required in the legislation on serve. liVing environment sector. (2)The terms on type, quantltv, time, and location of (2)Any energy management activity is obliged to meet the energy buffering reserve, as referred to in para- the terms.required In the legislation on safety sector graph (1) are arranged further by National Energy which covers standardization, security and safety of Council. installation, as well as occupational safety and health. PartThree Part Si)( Energy Otctc and Emergency Situation ()c~ti\ Omtent l_ev~1 Artide 6 Article 9 (l)Energy crisis Is an energy shortage condition. (1)Thedomestic contentlevel f both goods and services must be. maximlZed in energy exertion. (2) Energy emergency is a condition of disturbed supply of energy caused by the stoppage of energy facilities (2)Government is obUged to encourage the capability and infrastructure. or lIurlH:~~lil.. yuutf~ dnd servtces provtsrcn to support the energy industry which is independent, efficient (3)ln case the energy crisis andemergency, asreferred and competitive. to in paragraphs (1) and (2) causes the disturbance to governmental function, people's SOCIal living, andl PartSeven or economic activities, the government is obliged to International Cooperation take the overcoming act required Article 10 (l)International cooperation in energy sector can only Part Four be done to: Energy Price a. secure the national energy tenacity;

Article 7 b. secure the domestic energy availability; and (l)TI1e price of energy is stipulated based on a fair c. Improve the national economy. economy value. (2)IntemationaJ cooperation as referred to in paragraph (2)Government and regional aovprnmpnt provide sub- (1) is implemented in accordance with the legisla- sidy fund for poor people group. tion. BUSiness News 7609-7510/1-9-2008 (3)ln "~" l1A (3)ln case the government entered into an international (4) Leaders of National Energy Council consists of: agreement Jn energy sector which causes a wide and a. Chairman: President principle consequence on the people' life concerning b. Vice Chairman: Vice President to the state financial burden and/or requiring the c. Daily Chairman: Minister of Energy sector. amendment or creation of law, it must obtain the approval from DPR. (5)The members of National Energy COuncil consist of; a. seven persons, both the minister and other gov- CHAPTER IV ernment officials dJrectty responsible for provision, ENERGY POLlCY AND NATIONAL ENERGY COUNOl transportation, distribution and utilization of en- Part one ergy; and National EnPrgy Policy b. eight persons from stakeholders.

Article 11 Artide 13 (1) National energy policy covers, among others. a. energy availability fnr na&n:>rol nPPrl...; (ljMulbers of National Energy COundl, as referred to inJlltk::le 12 paragraph (5) point-a are appointed and b. energy development priority terminated by President. c. the utilization of national energy resource; and d _ national energy bufferin!3 reserve. (2)Members of National Energy Coundl, as referred to in Article 12 paragraph (5) point b are selected by (2)National energy poJi<y as referred to in paragraplJ the, People's House of Representative. (1) is stipulated by government upon the approval from DPR. (3)Members of N.ational Energy COUadl as referred to in Article 12 paragraplJ (5) point b consist of: fl;)rt: Two a. 2 (two) persons from scholar group; National Energy Coundl b. 2 persons from industrial group;

Article 12 c. 1 person from technological group; (1)111e President estebltsbed National Cnergy Council. d. 1 person from living environment group; .and e. 2 persons from consumers group. (2)National Energy COundl hasthe tasks of; a. lu L1t5ign and fonnullrt.e the national energy policy (4)1hegovernment suggests the candidates of National to be stipulated by the Government by the ap- Energy Council members as referred to Jn paragraph proval from DPR as referred to in Article 11 para- (2) to the DPR shall be 2 tim!" of the quantity of graph (2); each group of stakeholders, as referred to in para- b. to determine the national energy general plan as graph (3). referred to in Article 11 paragraph (3), c. to detennme tre overcommq steps on me energy (S)The determination of candidates as referred to in crisis and emergency-condition; and paragraph (4) is done through a transparent and ac- d. to monitorthe implementation of policy in energy countable screening process. field with cross sectoral charectertsnc. (6)The members of National Energy Council as referred (3) National Energy Council consists of leader and mem- to in Article 12 paragraph (S) point b are assigned bers. and terminated by president. Business News 7609-7610/1-9-2008 (7) Further ..... 12A (7)Further provisions on the screening procedure for the regional governments as well as paying atten- National Energy Council candidates as referred to in tion to the opinion and input from the people. paragraph (2) are arranged by President Regulations, (3)Further provisions on the composing of national en-

Article 14 ergy general plan is stipulated by virtue of the Presi- (l)The term of serviceof National Energy Council mem- dent Regulation. berscomingfrom the minister and other govemment offidals shall end when they no longer occupy the Part Four position as referred to in Article 12 paragraph (5) Regional Energy General Plan point a. Article 18 (l)The regional govemment composes the regional en- (2)Theterm of service of National Energy Council mem- ergygeneral plan by referring to the national energy bers as referred to in Article 12 paragraph (5) point general plan as referred to in article 17 paragraph b shall be five years. (1).

Article 15 (2)The regional energy general plan as referred to in The budgetary cost of National Energy Council section (1) is stipulated by regional regulation. shall be imposed on the state revenue andexpenditure budget. Part five People Rights and Participation

Article 16 Article 19 (1)ln performing their duty, the National Energy Coun- (l)Anyone has the right to obtain energy. cil is assisted by a secretariat general which is led by a secretary general. (zjpeopie, either indiVidually or in group, can nave the role in: (2)5ecretary General is assigned and terminated by the a. the composing of national energy general plan President. and regional energy general plan and b. energy development for public interest. (3)The organizational composition and work procedure for the secretariat general of National Energy Coun- CHAPTER V en is further arranged by virtue of the decision of the ENERGY MANAGEMENT chairman of National Energy COuncil. Part one prOVision and uttnzauon Part Three Article 20 National Energy General Plan (l)The provision of energy can be done through:

Article 17 a. inventories or energy resources (1)The government composes the design of national b. increasing of energy reserve energy general plan based on national energy c. composing of energy balance policy. d. diversification, conservation, end intensification of energy source and energy; and (2)1n composing the national enorgy general plan as e. security on the smoothness of provision, trans- referred to in paragraph (1), the government lnvoises rrusstcn, and t::1lt::IYY ::'UUI~~ end energy :;uving. (2) The ..... Business News 7609-7610/1~9-2008 13A (2)The provision of energy by government and/or re- and/or regional government according to their au- gional government is prioritized in underdeveloped thorities for certain period until its economic value is regions, remote area, and village regions· by using reached. the local energy sources, especially renewable energy. Article 22 (1) Further provisions on the providing for the fadlity (3)The energy source producing regions get the pri- and/or incentive by the Government and/or regional ority to obtain the energy from the local energy government according to their authorities, as referred source. to in article 20 paragraph (5) and Article 21 para- graph (3) are governed by the Government requla- (4)The provision of new energy and renewable energy tlon and/or regional regulation. is obliged to be increased by the government and regional governments according to their respective (2)Further provisions on the procurement and utiliza- authority. tion of energy by the Government and/or regional government according to their authorities as referred (5)The provision of energy from new energy sources to in Articles 20 and 21 are governed by the Govern- and renewable energy sources done by business ment Regulation and/or regional government regu- entity, permanent form of business and individual lation. might obtain facility and/or incentive from the Gov- ernment and/or regional government according to Part Two their authorities for certain period until the economic Exploitation value is reached. Article 23 (l)The exploitation of energy covers the exploitation of

Article 21 energy resources, energy sources, and energy (1) Energy utilization is done based on the principles as rpfprred to in Article 2 by : (2)The exploitation of energy can be done by business a. optimizing all energy resources potential, entity, permanent business form and individual. b. considering the technological, social, economic, ccn<;prv",tinn, ~nr1 Pnvironmental aspects, and (3)The exDloitation of energy services can only be done c. prioritizing the fulfillment of people needs and im- by business entity and individual. provementof economicactivitiesin energysource producing region. (4)The exploitation of enerev services as referred to in paragraph (3) follows the provision on energy ser- (2)The utilization of new energy and renewable energy vices classification. must be lncroased by the Government and ~i(ln..,1 government. (S)Classification of energy services is stipulated among others to protect and give the first opportunity in the (3)The utilization of energy from the new energy source utilization of domestic energy services. and renewable energy source done by business en- tity, permanent business form and individual might (6) Further provisions on the classification of energy ser- obtain facility find/or incentive from the Government "ices; are governed by thf! raovemment Regulation. Business News 7609-7610/1-9-2008 (7) The .... 14A (7)The exploitation of energy and energy services as conservation as well as the provision of facilities, ln- referred to in paragraphs (1), (2) and (3) is done centive and disincentive as referred to in paragraphs according to the leqrslanon. (1), (Z), (3) and ('1) are governed by the Govern- ment Regulation and/or regional regulation.

Article 24 (l)The business entity who engages in energy business CHAI-' 11::1{ VI operation as referred to in Artide 23 is obliged, among THe AIJ1liORmeS OF GOVeRNMeNT others: AND ReGIONAL GOveRNMeNT a. to empower the neighboring people, Article 26 b. to preserve and maintain the environmental (l)The authorities of government in energy sector, sustainability function, among others: c. to facilitate the research and development activ- a. the creation of statutes regulations ity of energy; and b. the determination of national policy d. to facilitate the education -and training in energy c. the determination and enactment of standard; and sector. d. the stipulation, procedure. (2)Further provisions on the obligation of energy ex- (2)The authorities of provincial government in energy ploitation as referred to in paragraph (1) are gov- sector, among others: erned by the Government Regulation. a. the creation of provincial regional regulation; b. the nurturing and supervision on the cress-dis- PartThree triet/city exploitation; and Energy Conservation c. the stipulation on cross-district/city management

Article 25 policy. (l)National energy conservation becomes the responsi- bility of the Government, regional government, busi- (3)The authorities of district/municipal government in ness entities, and the people. energy sector, among others: a. the creation of district/munlopallty regional regu- (2) National energy conservation as referred to in para- lation graph (1) covers all phases of energy management. b. the nurturing and supervision on the exploitation in district/city; and (3)Energy consumers and producers of energy efficient c. the stipulation on the management policy in the appliances who perform the energy conservation are district/city. given facilities and/or incentive by the Government and/or regional government. (4)The authority of provincial and district/city govern- ments as referred to in reracranhs (2) and (3) is (4)Energy sources consumers and energy consumers performed according to the legislation. who do not perform the energy conservation are given disincentive bv the Government and/or regional gov- CHAPTE'R VII ernment. NURTURING AND SUpeRVISION Part One (I:j)FIJrthpr provision-Iii on the implementation of energy Nurturinu Business News 7609-7610/1-9-2008 Article 27 ..... ISA

Article 27 (4) The provisions on funding as referred to In paragraph The nurturingon e[lergy resources management (3) are governedfurther by GovernmentRegulation. aetlVlLY, energy sources anc energy IS aone by the GOV- ernment and regional government. CHAPTER IX TRANSmONAL PROVISIONS Part two Article 31 Supervision (tjwhen ttlis Law commences to be in effect, all stat-

Article 28 utes' regulations in energy Sectorremain in effect as The superveron on the menegement activity of long as they do not opposeor not replaced yet based energy resources, energy sources and energy is done on this law. by the Government regional governmentand the people. (2)Natfonal EnergyCoordinating Agency keeps perform- CHAPTER VIII ing their tasks and functions until the establishment RESEARCH AND DEVELOPMENT of National Energy Council.

Article 29 (l)The research and development on science and tech- (3) Prior to the establishment of such National Energy nology of energy provision and utilization must be Council, any policy to be issued by the national en- facilitated by the government and regional govern- ergy coordinating agency is adjusted to this law. ment according to their authorities. CHAPTER X (2)Rc5C3fCh end development es referred to in para- CLOSING PROVISIONS graph (1) is mainly directed for the development of

Article 32 new energy and renewable energy to support the National EnergyCouncil must have been estab- development of independent national energy indus- lished at the latest of 6 (six) months after this Law is try. enacted. ArtidQ 30

Article 33 (l)The funding on research and development activities The implementing regulations of this Law must as referred to in Article 29 is facilitated by the Gov- ernment and regionalgovernment acrordina to their have been stipulated at the latest of 1 (one) year after authorities. this law is enacted (2)The funding on research and development activity in Article 34 energy science and technologyas referred to in para- This Law shall become effective as of the date graph (1) among others coming from the state rev- of its enactment. enue and expenses bl,lrlget, reqlonal revenue and ex- penses budget, and funds from private sector. For public cognizance, it is instructed to pro- mulgate this law by inserting the same in the Statute (3)The development ;mrllltiIi7;ttinn on the result of re- Book of the Republic of Indonesia. search on new energy and renewable energy is fi- nanced from the state revenue coming from the non Ratified in Jakarta renewable energy_ On 10th of August 2007 Business News 7609-7610/1-9-2008 THE ..... 16A THE PRESIDENT OFTIiE R£PUBUCOFINDONESIA, necessary for the Government to compose an energy sgd management plan to fUlfill the national energy needs DR. H. SUSILO BAM BANG YUDHOYONO which is based on the long term energy management policy. Enacted in Jakarta Based on the foregoing, it is necessaryto stipu- On 10th of August 2007 late a Law on energy as the legal basis and guidance in THE MINISTER OF LAW AND HUMAN RiGHTS the context of regulation and management in energy OFTHE REPUBLIC OF INDONESIA sector. sgd As for the basic material governed in this law AND! MATALATTA are among others: a. energy arrangement which consists of control and THE STATE GAZETTE OF arrangement of energy resources, THE REPUBLIC OF INDONESIA OF 2007 NUMBER 96 b. energy buffering reserve in order to secure the na- tional energy tenacity, ELUCIDATION OF c. energy crisis and emergency situation as well as en- LAW OF THE REPUBUC OF INDONESIA ergy price/ NUMBER 30 of 2007 d. government's and regional government's authoritfes REGARDING in the arrangement of energy sector, ENERGY e. national energy policy, national energy general plan and the establishment of National Energy Council, GENERAL f. people's rights and role in energy management, Energy resources as a natural treasury consti- g. nurturing and supervision on management activities tute the blessing of the one and only God to the people in energy sector, and nation of Indonesia. Besides, energy resources are h. research and development. strategic natural resources and very important for the people's life espedalry in improving the economic ac- rr, ARTICLE BY ARTICLE tivities, employment opportunity, and national tenacity, therefore the energy resources must be controlled by Article 1 the state and utilized for maximum welfare of the people Sufficiently dear. as mandated in Article 33 of 1945 Constitution of the Republic of Indonesia. Article 2 The energy management which covers the pro- What's meant by utility principle is the principle curement, utilization, and exploitation must be performed in energy management which must fUlfill the people in fair, sustainable, rauonal, optimal and integrated way needs. to give value added to the national and the Republic of What's meant by fair p,ffidp,nry principle is the Indonesia unitary state's economy. principle in energy management which must achieve the The procurement, utilization, and exploitation access evenly distribution to energy with economic and of enerov conducted continuously to improve the people affordable Ilrirf'- welfare in the implementation must be in harmony, suit- What's meant by value added increase principle able and balance to the living environmental functions. is the principle in energy management which must Given the importance of en~rgy resources. it je:; ar:hieve thp nprlmnm Pronomic vatue_ Business News 7609-7610/1-9-2008 What's • ~.. to • 17A What's meant by sustainability principle is the Articles 8 through 12 principle in energy management which must secure the Sufficiently clear provision and utilization of energy for current and fu- ture generation. Article 13 What's meant by people welfare principle is the Paragraphs (1) and (2) pnnciple in energy meneqement which must achieve the Sufficiently dear maximum people's welfare. What's meant by living environment functions Paragraph (3) preservation prrncrple Is the principle In ~nergy men- Point a agement which must guarantee the better quality of What's meant by scholar group is the energy experts coming from university education. environmental functions. Point b What's meant by national tenacity principle IS What's meant by industrial group is the practi- the principle in energy management which must achieve tioners engaged in energy industrial sector. the national capability In energy management. Point c What's meant by integrity principle is the prin- What's meant by technological group is the ex- ciple in energy management which must achieve the perts in the energy technological engineering sector. cross-sectoral integrated energy management. Point d What's meant by living environmental group is

Article 3 the envlronrnental experts in energy sector. Points a through d Point c SUfficiently clear. What's meant by consumers group is the people Point e consuming energy. Theutilization of energy in all sectors according to the needs based on the energy utilization standard. Paragraphs (4) through (7) Points f through i Sufficiently clear ~lIffi("_iP.ntly clear. Articles 14 through 18 Articles 4 through 6 Sufficiently clear SUfficiently cteer.

Article 19

Article 7 Paragraph (1) par~rdph (1) Suffkiently clear What's meant by the fair economic value is a value/cost that reflects the energy production cost, in- Paragraph (2) cluomg the environmental and conservaucuat costs, as The people mvotvement ill llli:;, prcvreion 15 giv well as the benefit reviewed on the basis of people's ing the inputs in the form of written suggestions, datal capability and stipulated by the government and/or information. Paragraphs (2) and (3) Article 20 Sufficiently clear Paragraph (1) Business News 7609-7610/1 ~9-2008 Points ..... !8A Points a -and b Points b through d ~ufficicntly clear Sufficiently cleer. Point c Whars meant by energy balance is the retlec- Paragraph (2) tlon of a balance between supply from various energy Sufficiently dear. sources and the utilization, of energy within certain pe- riod. Article 25 Points d and e Pdldyldphs (1) end (2) Sufficiently clear Sufficiently clear. Paragraphs (2) through (4) paragraph (3) Suffidently clear What's meant by producer is the domestic pro- ducers. Paragraph (ll) What's meant by economic value is the value Paragraphs (4) and (5) formed from the balance between the management on Sufficiently clear. demi=lnrt ;:mri c;lIpply. Incentive can take the form of capital, tax, and

Article 26 fiscal. Facilities can be in the form of simplified licensing Paragraph (1) procedure and exploitation requirements. Point a Sufficiently clear. Articles 21 and 22 Point b Sufficiently clear. The stlpulatlcn of national policy is among oth- ers Including the stIfJuiatidiT of erieigy price.

Article 23 Points c and d Paragraph (l) Suffideritly clear. Sufficiently clear. Paragraph (2) Paragraphs (2) lhrough (4) Business entity covers state-owned enterprises, Sufficiently clear. region-ownedenterprises, cooperative, and privateen- terprises. Article 27 The nurturing is prioritized far the development Paragraphs (3) through (7) of human resources and technology. Sufficiently clear. Articles 28 through 34

Article 24 SuffICiently clear. Paragraph (1) Point a SUPPLEMENT TO THE STAlUTE BOOK OF The form of local people empowerment is ad- THE REPUBUC OF INDONESIA NUMBER 4746 justed to the needs at the people around the business premises ta improve such people welfare. -~~~(RY)~~~ Business News 7609-7610/1-9-2008