Minister of Energy and Mineral Resources Regulation Number 48 of 2017 Regarding Supervision of Business Activities in the Energy and Mineral Resources Sector



Indonesian Minister of Energy and Mineral Resources (“MEMR”) has recently issued Regulation number 48 of 2017 on Supervision of Business Activities in the Energy and Mineral Resources Sector on 3′ of August 2017 (“MEMR 48/2007″), replacing the previous MEMR regulation number 42 of 2007 (“MEMR 42/2007″).

MEMR   Regulation      48/2017   regulates   Government’s   supervision   on   the   changes   of ownership/control, transfers of shares/participating interests and changes to the composition of boards of directors and boards of commissioners in the energy and mineral resources sector.  The issuance of MEMR 48/2017 has simplified the Government supervision for certain corporate action. Under the MEMR 42/2017, certain corporate actions as mentioned above, required MEMR approval. But with the new regulation MEMR 48/2017, for some of the corporate actions are only required to submit reports to MEMR.

In the upstream oil-and-gas industry, the transfer of any participating interest must be approved by the MEMR. Meanwhile, any transfers of shares which result in any change in direct control must also first be approved by MEMR after an assessment has been made by the Special Task Force for Upstream Oil-and-Gas Business Activities (Satuan Kerja Khusus Pelaksana Kegiatan lu Migas – SKK Migas). In addition, MEMR 48/2017 requires any transfers of shares which result in any change in indirect control must be reported to MEMR through Director General of Oil and Gas.  Meanwhile, any change of ownership or board of directors and/or commissioners in the downstream oil-and-gas industry, shall be reported to MEMR through the Directorate General of Oil and Gas.

In the electricity industry, any transfer of shares involving a Power-Plant Permit Holder (Izin Usaha Pembangkit Tenaga Listrik – IUPTL) must be reported to the MEMR. Moreover, any changes that are made to any IUPTL boards of directors or commissioners must be reported to the MEMR through the Director General of Electricity.

While   in   the   New   Renewable   Energy  Conservation   Industry  (Energi  Baru   Terbarukan Konservasi Energi – EBTKE) any transfers of shares which are undertaken under a Geothermal License (Izin Panas Bumi – IPB), involving holders of geothermal-resource concessions, joint-operation contractors for geothermal resource concessions, or geothermal resource concession licenses within the Indonesian stock market after the completion of an exploration stage, must first be approved by the MEMR. Moreover, any transfers of shares through any stock exchange outside of Indonesia undertaken after completion of the relevant exploration stage must be reported to the MEMR through the Director General of EBTKE. Finally, any changes that are made to any boards of directors or commissioners must be reported to the MEMR through the Director General of EBTKE.

In the Minerals and Coal Industry   (Mineral dan Batubara – Minerba), the transfer of any shares under either a Mining Business License (Izin Usaha Pertambangan – IUP) or a Special Production Operation IUP License (Izin Usaha Pertambangan Operasi Produksi Khusus – IUP-OPK) must be approved by the MEMR. Moreover, any changes that are made to any boards of directors or commissioners also must be approved by the MEMR.

The transfers of any shares or the changes to board of directors and/or commissioner under either holder Mining Businnes License (IUP) or a Special Production Operartion (IUP OPK) License of Production Operation specifically for processing and/or refining issued by the MEMR, IUPK, KK, or PKP2B (Petitioner) shall submit a written application to MEMR through the Director General of Minerals and Coal with following requirements:

a.   Administrative, which encompass:

    1. an application letter signed by the Director registered with the Directorate General of Mineral and Coat;
    2. the bases   or   reasons   for   transfer   of   shares   or   change   in   board   of directors/commissioners;
    3. copy of the results of General Meeting of Shareholders;
    4. documents of the latest/newest articles of association of establishment with validation from the minister who engages in government affairs in law and human rights;
    5. copy of the IUP Clear and Clean which is issued by the Directorate General of Mineral and Coal for holders of IUP which according to the law need the Clear-and-Clean status;
    6. copy of IUP Production Operation specifically for processing and/or refining for holders of IUP Production Operation specifically for processing and/or refining;
    7. the shares-purchase plan or the profile of the new directors/commissioners together with their copy of identity or passport;
    8. for shares transfer, the identity/profile of the transferee of the share transfer completed with:

a. copy of Resident ID (for changes to board of directors or commissioner) Card (KTP) for                                                       Indonesian Citizens or a copy of passport for Foreign Citizens; and/or

b. copy of the latest/newest deed of establishment and/or articles of association validated by                                                he minister who engages in government affairs in law and human rights, Certificate of                                                          Company Registration (TDP), and the Taxpayer Identification Number (NPWP) of the                                                        company

    1. duty-stamped statement which states that all documents submitted are valid; and
    2. digital copy of the application-requirement documents.

b.     Financial, which encompass:

  1. reports on Annual Company Income-Tax Return of the last 2 (two) years of holders of IUP, IUPK, IUP Production Operation specifically for processing and/or refining, KK, or PKP2B;
  1. financial statements of the last 2 (two) years audited by a public accountant of holders of IUP, IUPK, IUP Production Operation specifically for processing and/or refining, KK, or PKP2B;
  1. the receipt of payment of non-tax state revenue which is registered with the Online PNBP System Information (SIMPONI);
  1. reports on Annual Income-Tax Return of the share transferee of the last 2 (two) years and its taxpayer identification number (NPWP);
  1. financial statements of the share transferee of the last 2 (two) years which have been audited by a public accountant.