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Press Release: Government Demands Transparency of Beneficial Owners of Extractive Industries Corporations

Press Release: Government Demands Transparency of Beneficial Owners of Extractive Industries Corporations

Kuta, 10 August 2018 – In an effort to increase the transparency of the oil and gas and mineral and coal sectors, Coordinating Ministry for Economic Affairs conducted a socialization on the implementation of the Extractive Industries Transparency Initiative (EITI) and Beneficial Ownership (BO) Reporting at Bali Dynasty Resort, Kuta, Bali. BO transparency or the owner of corporate benefits is one of the things required by the EITI Standard, where Indonesia is one of the implementing countries for EITI along with 50 other countries.

 In many extractive resource-rich countries, the secrecy of corporate ownership is one of the causes of corruption, money laundering, tax evasion, and covert monopolies. But until now, there is only little information that can be accessed by the public about BO information.

“In accordance with the EITI Standard, by 2020, all EITI implementing countries, including Indonesia must be able to open data on names, nationalities and domiciles of benefit owners or BOs from extractive industry corporations,” said Assistant Deputy for Extractive Industries, Coordinating Ministry for Economic Affairs, Ahmad Bastian Halim.

 Efforts to implement the transparency of BO in Indonesia have involved cross Ministries and Institutions that have the same goal in an effort to achieve improved governance. As a legal umbrella, the government has issued Presidential Regulation Number 13 of 2018 concerning the Application of the Principle of Recognizing Benefit Owners of Corporations in the Framework of Preventing and Eradicating Criminal Money Laundering and Terrorism Funding Crimes promulgated in early March 2018.

The Ministry of Energy and Mineral Resources also requires transparency of BO data in licensing in the mineral and coal sector. This is stated in the Minister of Energy and Mineral Resources Decree Number: 1796 K / 30 / MEM / 2018 concerning Guidelines for Application, Evaluation, and Issuance of Licensing in the Field of Mineral and Coal Mining

The implementation of extractive industry transparency through EITI which has been carried out by the central government, is planned to also be implemented at the regional level. This effort is needed to improve extractive industry governance in the region, including the management of thousands of mining business licenses (IUP).

“Hopefully this can have a positive impact on improving governance at the regional level, which aims to improve the welfare of the people in the area,” Bastian added.