Here is The New Terms of Business and Legality of Mining Companies in Indonesia (Part 2)

 In Korporasi

“Legality of Business License, obligations and restrictions in the field of Mining Services shall always be considered”

IUJP as the Legality of Mining Services Company
As mentioned before in Here is The New Terms of Business and Legality of Mining Companies in Indonesia (Part 1) that with the withdrawal of Permen ESDM No. 24 / 2012, IUJP is the legality for business actors who want their company to engage in mining services. in Permen ESDM No.34 / 2017 clearly stated in Article 1 number 6 that:

“Mining Services Business License, hereinafter abbreviated as IUJP, is a license granted to conduct mining services business activities.”

This IUJP is provided by the Minister if mining service business activities are conducted throughout the territory of Indonesia. If mining activities are conducted in 1 (one) province, IUJP shall be granted by the Governor. As for private business entities in the framework of Foreign Investment (PMA) IUJP is still provided by the Minister. The Governor shall be obliged in Article 19 of Permen ESDM No.34 / 2017 to submit the IUJP documents which have changed the status of PMDN to PMA to the Minister to update its IUJP.

The granting of this IUJP is based on a request from a Business Entity, which in this case is the Company, by meeting the specified administrative and technical requirements. How is the process of IUJP application and the requirements to be met by mining service companies?

First, in submitting an application for IUJP, the company may apply to the Minister or the governor in accordance with its authority through the Investment Coordinating Board (BKPM) or Provincial Integrated One Stop Service (PTSP) Provincial delegation. Furthermore, the officer receiving the application verifies the completeness of administrative, technical, environmental, and financial requirements.

If the application meets the requirements will be given a receipt of the application to the company, and forwarded to the evaluator for evaluation. On the other hand, if there is a lack or incomplete, then the application is rejected. For rejected or unacceptable applications will be returned to the company with applicable notes in accordance with the verification results.

The Company may reapply the application after completing the requirements in accordance with the verification result with the number and date of the new application letter.
Secondly, for the IUJP requirements, as explained that IUJP can only be processed if it meets both administrative and technical requirements, administrative requirements, such as:

  1. Application letter signed by the Board of Directors, sealed, and wet stamped (original company stamp);
  2. Articles of incorporation and amendments thereto which have been approved by the competent authority;
  3. Taxpayer Registration Number (NPWP) of Company and Taxpayer Code Number (NPWP) of board of directors (in accordance with the Deed);
  4. Statement written on stamp duty and in wet stamp (original company stamp) stating that all information attached to the application is true;
  5. Certificate of domicile;
  6. Official company contact data;
  7. Softcopy results scan the entire completeness of documents in the form of Compact Disc.

While the technical requirements, consisting of list of experts, made in the form of tables that include:

  1. Name of experts;
  2. Expert background;
  3. Expertise / certificate / expert experience;
  4. KTP / Permit to hire Foreign Workers (documents attached);
  5. Diploma (document attached);
  6. Curriculum Vitae (document attached); and
  7. Expert statement

In addition, there is also a list of equipment, made in the form of tables consisting of type, quantity, condition, ownership status, and location of the existence of the equipment in this case if the company does not own equipment either own or lease, it must attach letters of cooperation agreement (MOU) with companies which owned the equipment.

With the fulfillment of the requirements, the IUJP will be granted for a maximum period of 5 (five) years and may be extended for a period of 3 (three) years each time of renewal.

Liability and prohibition for Mining Services Company
In addition to the fulfillment of the legality of the IUJP as a mining service company licenses, in the Permen ESDM No.34 / 2017, also regulates what are the obligations of the mining service company as the holder of IUJP, among others:

  1. Prepare and submit work plans to the Minister or governor in accordance with their respective authorities. With regard to the obligation to prepare and submit the work plan, it will be issued approval of the work plan and budgetary fees provided based on the evaluation of the results of supervision of business activities from the previous year period.
  2. Apply the rules of good mining techniques, that is, to appoint operational responsibility as the highest leader in the field, and to have competent mining technical personnel in accordance with the provisions of legislation
  3. Prioritize the use of local goods and services as well as local workforce; and
  4. Submitting written reports periodically to the implementation of its business activities to the Minister or the governor in accordance with their authority through the head of mining engineering.

In addition, IUJP holders are prohibited from owning IUP, Mining Permit, IUPK, and Production Operation IUP specifically for processing and / or refining, and are prohibited to transfer their IUJP to other parties.

Violations of these obligations and restrictions will be subject to administrative sanctions in the form of written warning and suspension of part or all of the business activities under certain conditions in accordance with the applicable provision.

We hope this article is useful.

BP Lawyers can help you: we can assist you in providing the best solution to the legal program of your business or your company’s.  You can contact us via or +62821-1234-1235

Author :
Iskandar DP, SH/ Ali Imron, S.H.I

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