Decision of the Minister of Forestry No. P 12/Menhut-II/2004 on the exploitation of protected forest areas for mining activities

Article 1 regulating the use of protected forest areas for mining Referred to in this regulation as: activities. 1. Exploitation of protected forest areas for mining ac- tivities shall be the use of protected forest areas for CHAPTER III all kinds of activities in the mining sector without LICENSING PROCEDURES changing designation and main function of the forest Part One areas. Exploration Phase

Article 4 2. License of activity in the protected forest areas shall (l)Applications for exploitation of protected forest areas be a license to undertake activities of feasibility study in the exploration phase shall be submitted to the or mining exploration in the framework of exploita- minister by the highest leader of the mining compa- tion of protected forest areas. nies as meant in Article 2 paragraph (2) with a copy made available to the Minister of Energy and Mineral 3. License to borrow protected forest areas for utiliza- Resources, Secretary General of the Ministry of For- tion shall be a license to use protected forest areas estry, the Head of the Forestry Planning Board, local for activities of mining exploitation/production or con- governor and regent/mayor. struction for a specified period. (2)The applications as meant in paragraph (1) shall be 4. Reclamation of former mining areas in protected for- accompanied by: ests shall be efforts to improve or restore damaging a. map of location and size of forest areas requested land and forest vegetation arising from exploitation for exploration with the minimum basic map scale of protected forest areas for mining activities so as to. of 1:250,000; be able to function optimally in accordance with their b. license or agreement in the mining sector; functions. c. plan for exploration activities in the protected for- est areas. 5. Minister shall be the minister in charge of forestry affairs. (3)Based on the applications as meant in paragraph (1), the Head of the Forest Planning Board on behalf of CHAPTER II the Minister of Forestry shall issue license to under- BASIS AND OBJECTIVE take exploration activities in the protected forest ar-

Article 2 eas. ( 1)Exploitation of protected forest areas for mining ac- tivities shall be based on approval of the minister in Part Two the form of license of activity or license to borrow Exploitation Phase protected forest area for utilization with compensa- Article 5 tion. ( 1) Applications for exploitation of protected forest areas in the exploitation phase shall be submitted to the (2)The approval of the minister as meant in paragrJph minister by the highest leader of the mining compa- ( 1) shall only apply to 13 (thirteen) licenses or agree- nies as meant in Article 2 paragraph (2) with a copy ments in the mining sector with the names of compa- made available to the Minister of Energy and Mineral nies and mining locations as contained in the attach- Resources, State Minister for Environment, Secretary ment to Presidential Decree No. 41/2004. General of the Ministry of Forestry, Head of the For- estry Planning Board, local governor and regenti

Article 3 mayor. Regulation of exploitation of protected forest areas as meant in Article 2 shall aim at restricting and (2)The applications as meant in paragraph (1) shall be Business News 7125/15-10-2004 accompanied ..... accompanied by: (3)Based on the results of the monitoring and evalua· a. map of location and size of the requested forest tion as meant in paragraph (1), the Minister shall i:.,,,i areas with the minimum basic scale of 1 : 100,000; sue a decision on license to borrow protected fore'>ti b. license or agreement in the mining sector; areas for utilization after applicants fulfill the obliga-1 c. plan for exploitation of protected forest areas; tions mentioned in the borrowing approval. d. statement of readiness to meet the required obli- gations and bear costs arising from the applica- CHAPTER IV tions in accordance with the stipulated guidelines, O_BLIGATIONS OF APPLICANTS/LICENSEES ratified by notary; Part One e. Environment Impact Analysis (AMDAL) already rati- General fied by the authorized institution; Article 7 f. Recommendation of local regent/mayor and gov- (l)The obligations of applicants in the exploration phase ernor.. as meant in Article 4 paragraph (2) shall be as foJ- lows: {3)Based on the applications as meant in paragraph (1), a. paying compensation for the value of the felled. the Head of the Forestry Planning Board shall coordi- uprights; nate the implementation of technical study of the in- b. formulating plan of activities in forest areas; tegrated team in the framework of the issuance of c. maintaining security of the borrowed forest areas license to borrow protected forest areas for utiliza- and holding responsibility for negative impacts tion. arising from mining activities on surrounding en~ vironments; (4) The implementation of activities of the integrated team d. reclamation and reforestation of forest areas be- shall be financed by applicants. ing former locations of exploration activities; e. conveying report periodically, every three months~ {S)Based on results of the study as meant in paragraph to the minister; (3), the Head of the Forestry Planning Board shall f. making statement of readiness to meet all obliga- convey technical considerations to the minister not tions, ratified by notary. later than 15 (fifteen) working days as from the date of receipt of the report on the results of the study. (2)The obligations of applicants in the exploitation phase as meant in Article 5 shall be as follows: (6)Based on the technical consideration of the Head of a. paying compensation for the value of the fellect' the Forest Planning Board as meant in paragraph (5), uprights; the Minister shall issue borrowing approval to appli- b. providing and giving up other land to the Ministry cants as the basis for fulfilling the stipulated obliga- of Forestry as companies for the borrowed pro tions. tected-forest areas; c. bearing costs of measuring, mapping and pegging. Article o of border marks and settlement of account of bor- {l)The Forestry Planning Board and provincial and re- der arrangement, as weli as costs of inventory of gental/municipal forestry institutions shall monitor and the borrowed protected-forest areas and compen- evaluate the fulfillment of the obligations as meant in sation land; the borrowing approval already issued, minimally once d. formulating working plan for exploitation of forest in one year. areas for five years and specified in annual basis, containing among others, mining activities and sup- (2) The Head of the Forestry Planning Board shall convey porting facilities, land reclamation and conserva- results of the monitoring and evaluation as meant in tion, utilization/felling, forest protection and con- paragraph ( 1) to the minister. servation of biological resources and cluster plan Business News 7125/15-10-2004 approved ..... approved by the Head of the Forestry Planning b. free from the imposition of mortgage right; Board on behalf of the minister;_ c. free from dispute; e. paying fund of guarantee for reclamation; d. directly sharing border with forest area; and f. financing and applying reforestation to the com- e. located in the same river stream area/sub-river pensation land; stream area of regency/city as the borrowed ar- g. maintaining security of the borrowed forest areas eas; and holding responsibility for negative impacts aris- f. fulfilling technical requirements for becoming land. ing from mining activities on surrounding environ- ments; (3)In provinces where forest areas account for less than h. undertaking reclamation of the borrowed pro- 30% of the mainland area, the compensation area tected-forest areas on the basis of the working shall be twice of the borrowed forest area. plans for exploitation of the approved forest areas as meant in letter d; ( 4) In provinces where forest areas account for 30% of i. conveying report every three months to the Minis- the mainland area or mo~e, the compensation area ter; shall be equal to the borrowed areas. j. in the case of licensees being subjected to admin- istrative sanction in the form of revocation of li-

Article 10 cense, the licensees must continue completing The costs of measuring, mapping, pegging of activities of reclamation in the borrowed forest border marks and settlement of account of border ar- areas; rangement as well as costs of inventory of the borrowed k. making statement of readiness to meet all obliga- • protected-forest areas and compensation land shall be tions, ratified by notary. in accordance with the provisions in force. Part Two

Article 11 Value of Upright (l)Reforestation of the compensation land shall be done

Article 8 in accordance with the provision in force. ( 1) The Forestry Planning Board shall make inventory of upright potential in the areas to which license to bor- (2)Delivery of plants resulting from reforestation in the row is issued. compensation land shall be done in the fourth year after the institution in charge of forestry affairs in the (2)Based on the results of inventory of upright potential said regency/city evaluates. as meant in paragraph (1), licensees shall pay com- pensation for the value of the uprights to the state (3)The delivery of plants resulting from reforestation as through the Ministry of Finance. meant in paragraph (2) shall be mentioned in account of delivery of reforestation plants in the compensa- Part Three Compensation for Leasehold tion land from licensees to the relevant regental/mu-

Article 9 nicipal government. ( 1) License to borrow protected forest areas shall be sub- jected to compensation in the form of the obligation Part Four to provide and give up land outside forest area. to be Reclamation used for forest area. Article 12 Provisions on reclamation and criteria for the (2)The requirements for compensation land shall be: success of forest reclamation as meant in Article 7 para- a. having clear status and right on behalf of the ap- graph (2) letter h shall be in accordance with the provi- plicants; sions in force. Business News 7125/15-10-2004

Article 13 Part Two ( 1) In the case of forest areas formerly used for mining Exploitation Phase activities being unable to restore into forest, licens- Article 16 ees shall be subjected to additional compensation in (l)License to borrow protected forest areas shall app the form of production sharing with the ratio stipu- for 5 (five) years as from the date of signing of tt lated in accordance with the law in force. license and can be extended. (2)The fund obtained from the production sharing as (2)The extension of the license as meant in paragrap meant in paragraph (2) shall be used for restoring (1) shall be submitted not later than 6 (six) monil:'1 reclamation land of forest areas through trial run ac- before the license expires. tivities and other supporting activities. (3)The extension of the license as meant in paragrapl Part Five (2) shall be based on results of the evaluation as mean Working Plan for Exploitation of Forest Area in Article 17.

Article 14 ( 1) Licensees shall formulate five-year working plans for CHAPTER IX exploitation of forest areas, specified by annual work- MONITORING AND EVALUATION ing plan. Article 17 ( 1) Monitoring shall be applied to the realization of ol.,ii (2)The working plan as meant in paragraph (l) shall gations which must be fulfilled by holders of licenSt contain the planned mining activities specified in to borrow forest areas as meant in Article 7. blocks, mining road development plan as well as plans for reclamation, land conservation, utilization/felling, (2)Monitoring shall be executed by forestry institutio, forest protection and conservation of biological re- concerned in region and coordinated by provincial ser- sources. vice in charge of forestry affairs. (3)The working plan as meant in paragraph (2) shall be (3)The monitoring as meant ir. paragraph (1) shall !::rt! approved by the Head of the Forestry Planning Board. done at least once in one year. CHAPTER VIII ( 4) Results of the monitoring as meant in paragraph (2) PERIOD AND EXTENSION OF LICENSE shall be reporte dto the minister with a copy made Part One available to the said licensee, Minister of Energy ant! Exploration Phase Mineral Resource, State Minister for Environment:,

Article 15 Secretary General of the Ministry of Forestry, Head oi ( 1) License of activities in the protected forest areas shall the Forestry Planning Board, Director General of For- apply for one year as from the date of signing of the est Protection and Natural Conservation, Oirecto:A\!" license and can be extended. General of Land Rehabilitation and Social Forestr;" local governor and regent/mayor. (2)The extension of the license of activities in the pro- tected forest areas as meant in paragraph ( 1) shall Article 18 be submitted not later than three months before the (!)Evaluation shall be done central forestry institutio,~iz, license ends. together with regional forestry institution in the frame- work of returning the borrowed forest areas or eY- (3 )The application for extension of the license as meant tension. in paragraph (2) shall be accompanied by report on results of exploration already executed. (2)The evaluation as meant in par~graph (1) shall be Business News 7125j15-10-2004 gone__,__._._.. done at least 3 (three) months before the license ex- Article 23 pires. ( 1) The administrative sanction in the form of revocation of license as meant in Article 21 paragraph (2) letter (3)Prov_isions on monitoring and evaluation shall be fur- b shall be imposed because the licensees: ther regulated by the Head of the Forestry Planning a. fail to meet the provision as meant in Article 7. Board. paragraph (2) for one year; b. use the borrowed forest areas by ways contraven-

Article 19 ing the license. The costs of monitoring and evaluation shall be c. Transfer the borrowed forest areas partly or wholly borne by holders of licenses to borrow protected forest to other parties without written approval of the areas. minister; d. Are subjected to the criminal sanction as meant in CHAPTER X Article 78 of Law No. 41/1999. RETURNING OF BORROWED PROTECTED-FOREST AREAS (2)The revocation of license arising from the violation as

Article 20 meant in paragraph (1) letters a, b and c shall be (l)Protected forest areas already completed to be bor- done after the licensees are warned three times at a rowed or used for mining activities shall be returned time intervals of 30 (thirteen) days respectively, as to the minister. from the date of receipt of the warning. (2)The return of the protected forest areas as meant in (3)The revocation of license on the basis of the reason paragraph (1) shall be based on results of evaluation. as meant in paragraph ( 1) letter d shall be done after the court decision having permanent legal power CHAPTER XI comes. SANCTION

Article 21 CHAPTER XI (l)Holders of licenses to borrow protected forest areas MISCELLANY failing to meet the obligations shall be subjected to Article 24 administrative sanction. Mining activities shall be executed by using ap- propriate and environmentally sound technology. (2)The administrative sanction as meant in paragraph ( 1) shall be in the form of: CHAPTER XII a. suspension of activities in the field; CONCLUSION b. revocation of license. Article 25 The regulation shall come into force as from the

Article 22 date of stipulation. (l}The administrative sanction in the form of suspen- sion of activities in the field as meant in Article 21 Stipulated in Jakarta paragraph (2) letter a shall arise from the failure of On September 24,2004 licensee to meet one or more of the stipulated obli- THE MINISTER OF FORESTRY gations. Sgd MUHAMMAD PRAKOSA ( 2) The imposition of the administrative sanction as meant in Article 21 paragraphs (1) and (2) letter a shall be effective until the licensees meet the obligations. --===c E__ )===- Business News 7125/15-10-2004