- Indonesian coal miner Bayan Resources is suing Indonesia’s investment board head over a decision to revoke its permits.
- The revocation effectively reduces by 16% the total area of concessions held by five Bayan subsidiaries in Borneo.
- The move reflects the latest ruling in a long-running dispute between Bayan and another coal miner, PT Senyiur Sukses Pratama (SSP), over parts of their respective concessions that overlap.
- The revocation was announced as part of a sweeping series of permit revocations ordered by President Joko Widodo in January to retake land from companies that the government says have failed to exploit them to the utmost.
JAKARTA — Indonesian coal mining company Bayan Resources has challenged the government’s decision to revoke its permits and effectively shrink its concession area.
The legal challenge is the latest in an ongoing battle over mining concessions in Indonesian Borneo between Bayan and another mining company, PT Senyiur Sukses Pratama (SSP).
On April 8, five Bayan subsidiaries filed a lawsuit at the state administrative court in Jakarta against the head of the national investment agency, Bahlil Lahadalia, for revoking their mining permits. The announcement was made in a filing to the stock exchange regulator; Bayan is listed on the Jakarta bourse’s main board.
“Right now, there is no impact on the company’s finances, but BYAN’s five subsidiaries are unable/obstructed from continuing their operations,” the company wrote in the filing in Indonesian.
On Jan. 14 and Feb. 2 this year, Indonesia’s national investment agency, known as the BKPM, issued letters revoking permits held by the five Bayan subsidiaries. The move was part of a mass permit revocation announced by President Joko Widodo on Jan. 6 on the grounds that the affected companies had failed to exploit their licensed concessions to the utmost.
The mass permit revocation prompted up to 50 mining companies to lodge complaints against the government.
Ridwan Djamaluddin, director-general of minerals and coal at the mining ministry, said the BKPM had revoked 387 mining permits, including 137 for coal miners, as of March 5. He said the BKPM had started to process the complaints.
“And we have accepted parties that filed these complaints well, we’ve communicated [with them] and the BKPM has also replied to their letters officially,” Ridwan said during a parliamentary hearing on March 31.
The Bayan subsidiaries’ permit revocations effectively reduces the size of their concessions in Borneo by 16% overall, from a combined 13,647 hectares to 11,468 hectares (33,722 acres to 28,338 acres). The most affected subsidiary was PT Orkida Makmur (OM), which saw its concession slashed by 70%, from 1,061 to 310 hectares (2,621 to 766 acres).
The reason the concessions were reduced was because of a long-running legal tussle with another mining company, PT Senyiur Sukses Pratama (SSP), whose own concession overlapped with those of the Bayan subsidiaries.
The seesaw of litigation between the two started out in Bayan’s favor in May 2016, when SSP’s concession was slashed by the East Kalimantan provincial investment agency. SSP sued in administrative court and won a decision to roll back the reduction. Bayan, through OM, then took the case to a court in Jakarta, and after a series of four rulings up the list of courts, each one falling in favor of one side and then the other, SSP finally prevailed. In a Supreme Court review in February 2019, it had its original concession restored, with the areas of overlap ruled to be inside SSP’s concession and no longer in dispute.
Because of this, the BKPM decided to whittle down the Bayan subsidiaries’ concessions to exclude the areas that now fell inside SPP’s concession.
Grita Anindarini, a program director at the Indonesian Center for Environmental Law (ICEL), said the revocation could backfire on the government. The court hearing the Bayan subsidiaries’ lawsuit could find the BKPM guilty of maladministration, she said, if indeed the investment agency had acted without first exhausting its options of administrative sanctions such as written warnings and a stay order on their activities.
Under a 2021 government regulation on mining activities, a concession can only be automatically revoked if the concession holder has committed a crime; if a government evaluation has determined there’s been environmental degradation; or if the concession holder is declared bankrupt.
“If any of these criteria aren’t met, then there’s maladministration” in the revocation of the Bayan subsidiaries’ mining permits, Grita told Mongabay.
Banner image: Coal mining in East Kalimantan, Indonesia. Image by Rhett A. Butler/Mongabay.