New Indonesian job creation (omnibus) law focusing on direct use of geothermal
New job creation law (omnibus law) in Indonesia gives central government more control in matters related to direct use of geothermal resources in Indonesia.
The Indonesian Government enacted Law No. 11 of 2020 regarding Jobs Creation (or so called Omnibus Law). An omnibus law is a piece of legislation that covers a number of diverse or unrelated topics. The legislation was passed on November 2, 2020, as reported by Conventus Law.
The Omnibus Law of the Job Creation Law version has a wopping 1,187 Pages [ download here ]
The stated aim of the Omnibus Law is to bolster investment and create jobs by streamlining regulations and simplifying the licensing process to improve the ease of doing business in Indonesia. With its extent, the law also covers geothermal energy with amending 29 provisions and removing six provisions in the Law No. 21 of 2014 regarding Geothermal (the “Geothermal Law”).
Several of the amendments to the Geothermal Law concern the direct use of geothermal energy resources.
Regarding the direct use of geothermal resources, the central government receives the authority on norms, standards, procedures and criteria for the direct use of resources.
In its stipulation the determination of the price of direct use of geothermal will be handled by a geothermal regulation to be issued.
The production fee for direct use of geothermal is removed with the hope of encouraging greater investment in Indonesia’s geothermal sector.
The law further eases the process of doing business with removing the provision of the Geothermal Law requiring a separate license for activities related to the indirect utilization of geothermal resources in water conservation areas.
Further qualifications for certain criminal offenses under the Geothermal Law limiting offenses to those having resulted in casualties or having damaged health, safety, and or environment.
Overall, the law seems to give the central government extended power and removing those from local governments.
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Source: Conventus Law