DPR, govt agree to revise law on oil and gas

DPR, govt agree to revise law on oil and gas
The Jakarta Post, Jakarta | Fri, 06/18/2010 1:59 PM | Business

The House of Representatives and the government have agreed to revise Law No. 22/2001 on oil and gas as its clauses are considered to be no longer relevant to the current condition.

Head of the House Commission VI Airlangga Hartarto cited as an example that one of the of the
clauses, which were no longer relevant, dealt with an obligation to supply only 25 percent of the domestic oil and gas demands.

“In line with the special fuel oil inquiry committee, the law on oil and gas will be revised during the current House period,” Hartarto said Friday as was quoted by the state Antara news agency.

Hartarto explained that the revision of the law would give priority on the national interest and also on the cost recovery in the oil and gas operation.

“Principally the House and the government agree to meet all the domestic demand first,” he said, adding that the revision was expected to help settle problem of limited gas supplies for the domestic industries.

Trend of Krakatau Share Price Seen to be Abnormal
Thursday, 02 December, 2010 | 15:49 WIB
TEMPO Interactive, Jakarta:The chairman of the State-owned Enterprises (SOE) Commission at the House of Representatives (DPR), Airlangga Hartarto, said that the Krakatau Steel share trade trend is not normal, judging by the fluctuation of its share price. The shares sold at Rp 850 each have risen to Rp 1250 at the first and second day but its price declined the next day.

Beside the price hike, Airlangga also questioned the first tier of the investors’ act of selling their shares during the first day of trade in the Indonesia Stock Exchange. “Yet this was explained that foreign shares was meant for long term,” said Airlangga in a meeting with SOE Minister Mustafa Abubakar, Krakatau Steel Board of Director and three underwriters in Jakarta, Tuesday night.

The SOE Commission, which pushed for the establishment of Krakatau Steel Working Committee, will collect and complete data related to the Krakatau Steel IPO. The committee will ask three underwriters, Danareksa Sekuritas, Bahana Sekuritas, and Mandiri Sekuritas, to open the list of Krakatau share allotment.

Besides auditing share allotment, the deputy chief of the Finance Commission at the DPR, Achsanul Qosasi, said that they asked the Supreme Audit Agency to audit the Krakatau Steel bidding process.

IQBAL MUHTAROM

Royalties on mineral ores may be raised, lawmaker says
The Jakarta Post, Jakarta | Wed, 09/05/2007 2:20 PM | Business
A | A | A |
Ika Krismantari, The Jakarta Post, Jakarta
The government may raise the royalties on certain mineral ores under the new mining bill, a legislator involved in the deliberation of the bill says.
Chairman of the House of Representatives' energy and mineral resources commission, Airlangga Hartarto, said Tuesday that the current royalties on valuable minerals, such as gold, silver and copper, would be raised.
""With the current high commodity prices on the domestic market, royalties of 1 percent on gold, copper and silver are too low. We are in discussions with a view to raising the royalties on these ores,"" Airlangga said.
He refused to reveal how much the new royalty rate would be, saying that discussions were still underway.
Airlangga said that the commission was also discussing a revision of the royalty mechanism applied to coal.
""We are considering differentiating between the royalty on high-rank coal and low-rank coal. We will consider applying a lower royalty to low-rank coal producers to boost production,"" Airlangga said.
Currently, the state gets a cut of 13.5 percent in taxes and royalties on coal production.
Indonesia is expected to see increasing demand for low-rank coal over the next three years, by the end of which state power firm PT PLN will have opened a large number of new coal-fired plants under its 10,000-megawatt program.
The mining bill, which has been under deliberation for the past several months, still has a small number of outstanding items to be resolved -- such as determining the transition period for the holders of existing contracts of work (CoW) in adjusting to the new permit system.
""Some have suggested that we give a 5 year transition period, but the government wants us to keep honoring the existing contracts and let them continue operating until they expire.""
Airlangga is optimistic that the House will have passed the bill into law by December.

ASEAN-China open free trade area
By Stephen Coates (AFP) – Dec 29, 2009
JAKARTA — China and Southeast Asia establish the world's biggest free trade area (FTA) on Friday, liberalising billions of dollars in goods and investments covering a market of 1.7 billion consumers.
Eight years in the making, the ASEAN-China FTA will rival the European Union and the North American Free Trade Area in terms of value and surpass those markets in terms of population.
Officials hope it will expand Asia's trade reach while boosting intra-regional trade that has already been expanding at 20 percent a year.
"In 2010 we are sending a strong signal that ASEAN is open," H.E Sundram Pushpanathan, of the Association of Southeast Asian Nations (ASEAN), told AFP.
China has just overtaken the United States to become ASEAN's third largest trading partner, and will leap Japan and the EU to become "number one" within the first few years of the FTA, said Pushpanathan, Deputy Secretary-General for the ASEAN Economic Community.
Under the agreement, China and the six founding ASEAN countries -- Brunei, Indonesia, Malaysia, Philippines, Singapore and Thailand -- are to eliminate barriers to investment and tariffs on 90 percent of products.
Later ASEAN members, including Vietnam and Cambodia, have until 2015 to follow suit.
Zhang Kening, the director-general of the department of international trade and economic affairs in Beijing, said the average tariff rate China charged on ASEAN goods would be cut to 0.1 percent from 9.8 percent.
Average tariffs imposed on Chinese goods by ASEAN states will fall to 0.6 percent from 12.8 percent.
ASEAN-China trade has exploded in the past decade, from 39.5 billion dollars in 2000 to 192.5 billion last year, Pushpanathan said.
At the same time, ASEAN-China trade with the rest of the world has reached 4.3 trillion dollars, or about 13.3 percent of global trade.
Teng Theng Dar, chief executive of the Singapore Business Federation, said sectors likely to reap the most benefits from the FTA included services, construction and infrastructure, and manufacturing.
"Other than product and service innovations, this is one great new business opportunity for the establishment of a regionally-based innovative supply chain for market reach and growth," he said.
Officials said there was more to the deal than sating China's thirst for Asian raw materials like palm oil, timber and rubber, and opening up regional markets for its manufactured products, steel and textiles.
"China and ASEAN countries are all export-oriented economies. A large proportion of our products target the US and EU markets... Generally neither side took the other's market as its most important target market," Zhang said.
"But with the establishment of the China-ASEAN free trade zone, we think there is potential to improve or adjust this situation... Both sides have many goods that complement each other's needs."
Not everyone is happily singing the free-trade anthem, however.
At the 11th hour, industry groups in Indonesia, Southeast Asia's biggest economy, and the Philippines are frantically pressing their governments to keep tariffs on vulnerable sectors until 2012.
"These sectors aren't ready to compete with imported Chinese products. If the government implements free trade now, these industries are surely going to die," Indonesian lawmaker Airlangga Hartarto said.
He cited 12 sectors including textiles, petrochemicals, footwear, electronics, steel, auto parts, food and drinks, engineering services and furniture.
"For example, a local sack for sugar, rice and fertilizer costs about 1,600 rupiah (1.70 dollars) each. A Chinese sack costs about 800 rupiah each," he said.
Indonesian Footwear Association chairman Eddy Widjanarko said Chinese firms would take their share of the Indonesian market to 60 percent from 40 percent, costing some 40,000 local jobs.
Indonesian Furniture Producers Association executive director Tanangga Karim blamed the government for failing to level the playing field, and called for non-tariff protection in the form of strict safety and quality controls.
"We have to admit that we aren't ready to compete now with imported Chinese products," he said.
Pushpanathan conceded that some local businesses would struggle.
"In the short term there will be some adjustments that some countries have to make. Some local companies will lose their domestic market share but ultimately consumers will benefit," he said.
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