Draft Mining Business Employees, Goods, and Services Procurement Regulation

AuthorWilliam A. Sullivan/Christian Teo Purwono & Partners
ProfessionLicensed Foreign Advocate in Indonesia as well as a Solicitor of the Supreme Court of New South Wales
Draft Mining Business Employees,
Goods, and Services
Procurement Regulation
I. Executive Summary
1. Overview
1.1 An advanced draft of the Mining Business Employees, Goods and
Services Procurement Regulation (hereinafter referred to as Draft
EG&S Procurement Regulation) has been circulated by way of
the intended implementation of Article 88 of GR 23/2010.
1.2 At this time, it is not possible to say when the Draft EG&S Pro-
curement Regulation will be nalized and issued.
2. Approach
2.1 Employees: Mining companies are obliged to prioritize the
employment of Indonesian workers.
2.2 Employee procurement is to be managed so as to (i) to empower
and utilize local employees optimally and humanely; (ii) equalize
working opportunities according to the needs of national and
regional development; (iii) give protection to employees, (iv) increase
the welfare of employees and theirfamilies and (v) increase employee
competency in mining business activities.
2.3 Establishment of the mining company organizational structure and
any changes to the mining company organizational structure require
prior approval from the Relevant Government Authority.
2.4 Foreign employee procurement plans or RPTKA should be made to
facilitate access to and mastery of technology in minerals and coal
2.5 Every foreign employee must have an Indonesian employee partner
one organizational structure level below the foreign employee in the
mining companys organizational structure.
2.6 The person in charge of eld personnel may not be a foreign
2.7 Mining companies wanting to hire foreign employees must hold an
RPTKA Authorization from the Minister of Manpower (MoM).
2.8 Mining companies are obliged to provide an education and training
program plan for all foreign employees for the purpose of intro-
ducing the law and culture of Indonesia to foreign employees.
2.9 Goods and Services: Mining companies must prioritize the pur-
chase of commodities, equipment, raw materials, and other sup-
porting materials that are either produced locally or imported and
sold in Indonesia.
2.10 In order to support their activities, mining companies may make
application for the right to import goods: (i) according to a Master
List; (ii) on a temporary import basis; and (iii) that have been
remanufactured and/or reconditioned.
2.11 Commodities, goods, raw materials, and other supporting materials,
not being utilized anymore by mining companies, may be the subject
of application for (i) removal and/or utilization (i.e., handing over,
donation, destruction); (ii) re-export; or (iii) disposal.
2.12 Mining companies that make application, in respect of imported
goods, for (i) removal and/or utilization, (ii) re-export, or (iii) dis-
posal, must obtain a recommendation from the Relevant Govern-
ment Authority before making the application.
2.13 Relevant Government Authority: The Relevant Government
Authority may carry out, on a gradual basis, the development
and supervision of (i) employee procurement and (ii) the purchasing
of commodities, equipment, raw materials, and other supporting
3. Sanctions
The Relevant Government Authority is entitled to impose administrative
sanctions on mining companies that violate the Draft EG&S Procurement
348 Mining Law & Regulatory Practice in Indonesia

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