Jakarta Globe, November 13, 2012
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| Constitutional Court chief Mahfud MD. (JG Photo/Yudhi Sukma Wijaya) |
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The
Constitutional Court on Tuesday annulled select articles within the Oil and Gas
Law that allowed BP Migas to act as a state upstream oil and gas regulation
company.
In a ruling
published on the court’s website, chief judge Mahfud MD noted that all
provisions within the law and the explanatory portion related to the phrase
“regulator company” was both unconstitutional and not legally binding.
“The
function and role of the Upstream Oil and Gas Regulator Company should be
carried out by the government or a related ministry until a new law related to
the matter is issued,” Mahfud said.
The court
declared invalid various articles that gave BP Migas, the country’s upstream
oil and gas regulator company, the right to represent the government, manage
its oil and gas resources and sign contracts with foreign companies.
Several
Muslim activists, including Muhammadiyah chairman Muhammad Din Syamsuddin, former
Nahdlatul Ulama chairman Hasyim Muzadi, the chairman of the Indonesian Ulema
Council Amidhan, Muslim politician Ali Mochtar Ngabalin, former Manpower and
transmigration minister Fahmi Idris and twelve Islamic organizations filed for
the judicial review of the law.
According
to them, the existence of BP Migas was violating Article 33 of the Constitution
which stated that “the land, the waters and the natural resources within shall
be under the powers of the State and shall be used to the greatest benefit of
the people.”
The court
agreed, and stated that some articles within the law were nullified in order to
liberate the management of the oil and gas sector, which is highly influenced
by foreign parties and therefore antithetical to the provision that such
resources should be under state control.
Hikmahanto
Juwono, an international law expert on the government’s side, previously said
that the law placed the government in a safe position since contracts were only
signed between BP Migas and the other business involved.
“It’s
indeed good, because there’s a fear that if the state makes the agreement it
could cause state losses,” Hikmahanto said. “The state’s assets could be taken
away [if a losing dispute in international arbitration]. This way, it’s limited
to the assets of BP Migas.”
Din
Syamsuddin said that the court’s ruling represented a triumph for all
Indonesian people.
“This oil
and gas law caused losses for [Indonesian] people, so, this is a victory for
the people,” Din said, as quoted by Detik.com. “We hope that with this ruling,
oil and gas resources will be better managed.”
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