AmCham Update Vol. 5 #27

Gov't Revising Mining License Regulation, TikTok Faces US Ban, Taylor Swift Inspires Tourism Ministry, Trade Narrows in February But Surplus Continues

Mar 15, 2024

Gov't Discusses Mining License Regulation Revision

President Joko Widodo held a limited meeting with cabinet ministers to deliberate the revision of Government Regulation 96/2021 (GR 96/2021) on the Implementation of Mineral and Coal Mining Business Activities, which governs foreign mining permits, on March 13. Revision of this regulation will be completed soon this year, said Minister of Investment Bahlil Lahadalia.

The proposed revision aims to facilitate the possibility of permit extensions prior to the previous requirement of a minimum five years before the conclusion of operational activities, Minister of Energy and Mineral Resources Arifin Tasrif said.

GR 96/2021 currently mandates that requests for extending the operating production period for metal mineral mining, specific non-metal minerals or coal must be submitted to the minister within a timeframe ranging from five to one year before the current period ends. The mining permit business holders must downstream the metal minerals domestically, regardless of the regulation changes, Arifin added.

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US Gov’t Orders TikTok to Divest Assets of Face Ban

The US House of Representatives has approved a bill mandating TikTok’s Chinese parent company, ByteDance, to divest its US assets within six months or risk a complete ban in the country. The administration of President Joe Biden is poised to swiftly address security regarding TikTok’s alleged connections with the Chinese government, and wants the US Senate to take swift action, White House Press Secretary Karine Jean-Pierre said.

US Senate Majority Leader Chuck Schumer said the Senate will carefully review the bill, as some senators advocate for alternative strategies in regulating foreign-owned applications. The bill generated outcry from US users and content creators, underscoring TikTok’s considerable influence within the US with around 170 million users.

TikTok CEO Shou Zi Chew said that if enacted, the bill could result in significant financial losses for creators and small businesses, endangering around 300,000 jobs in the US. Chew said he intended to engage in negotiations with the US government and utilize legal avenues to oppose any potential ban.

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Tourism Ministry Takes Inspiration From Taylor Swift

Minister of Tourism and Creative Economy Sandiaga Uno explored potential collaboration with Singapore in hosting significant concerts and international events during his visit last week. Sandiaga raised the initiative during his meeting with Singaporean Minister-in-Charge of Trade Relations and Sustainability and the Environment Grace Fu Hai Yien.

The idea was prompted by the highly successful Taylor Swift concerts hosted by Singapore and the emerging phenomenon of Swiftnomics, a term referring to the economic influence of Swift concerts on local economies. The ministry is currently laying the groundwork for the Indonesian Tourism Fund, scheduled to launch before the end of March and designed to support local organizers in bringing forth large-scale concerts and events such as cultural gatherings and sporting competitions.

Member of the House of Representatives (DPR) Commission X Ratih Megasari Singkarru has urged the government to actively seek opportunities to facilitate global concerts and events, underscoring the significance of the creative economy industry as a pivotal economic driver.

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Trade Narrows in February Amid Decline in Exports

Indonesia recorded a decrease in its trade surplus to $870 million, a significant drop from January's $2 billion, but still marking the 46th consecutive month of trade surpluses, according to a March 15 press release by Statistics Indonesia (BPS). The decline is attributed to a noticeable decrease in key exports, with coal and palm oil experiencing downturns of 18.7 percent and nearly 40 percent year-on-year, respectively.

BPS highlighted a total export value of $19.31 billion against imports valued at $18.44 billion for the month. This represents a contraction in the export value by 5.79 percent from January's $20.52 billion, influenced by a slowdown in the manufacturing sector. The largest trade surpluses were recorded with the United States, India, and the Philippines, at $1.44 billion, $1.14 billion, and $627.8 million, respectively. Major exports to these countries included machinery and electrical equipment, non-knitted garments and footwear.

Conversely, Indonesia saw trade deficits with China, Thailand and Singapore of $1.8 billion, $549.6 million, and $317.1 million, respectively. BPS Acting Head Amalia Adininggar Widyasanti, underscored the diverse nature of Indonesia's trade relationships and the impact of global market dynamics on its trade performance.

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OJK Issues New Cryptocurrency Regulation

The Financial Services Authority (OJK) has issued OJK Regulation 3/2024 on the Implementation of Financial Technology Innovation (ITSK). This regulation aims to provide guidance for financial institutions in adopting new technologies, such as cryptocurrency, as part of the government’s efforts to build an integrated financial technology (fintech) ecosystem.

The regulation addresses a range of areas related to financial innovation, including its impact on products and services, digital operations, customer protection, regulatory sandbox testing, reporting specifications and the scope of ITSK, notably digital assets such as cryptocurrencies.

While the regulation does not provide detailed provisions for cryptocurrencies, it lays the groundwork for OJK’s crypto supervision program, slated to begin January next year after transitioning from the Commodity Futures Trading Supervisory Agency (Bappebti). Additionally, OJK has been drafting a memorandum of understanding (MoU) with foreign financial authorities to create a comprehensive crypto currency.

Get to Know Our Members: Black & Veatch

Black & Veatch is an employee-owned engineering, procurement, consulting and construction company with a 100-year legacy of innovations in sustainable infrastructure. Since 1915, we have helped our clients improve the lives of people around the world by addressing the resilience and reliability of our most important infrastructure assets.

Black & Veatch is currently ranked 9th in Engineering News-Record’s Top 100 Design-Build Firms and generated $4.2 billion in 2022 revenue. In Indonesia, Black & Veatch employs more than 100 professionals. Since 1969, Black & Veatch has undertaken more than 100 energy and water projects throughout Indonesia. Over the years, we have contributed to more than 20,000 megawatts of the country’s installed power capacity.

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Update is AmCham’s regular newsletter on developments related to investment, the economy, regulations and issues related to doing business in Indonesia. It comes out three times a week. It is edited by AmCham Managing Director Lydia Ruddy and written by the AmCham Staff. Paul L Goddard is the Managing Editor.

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