14 Feb 2018
MEMR Announces Easing of Regulatory Burden: New & Renewable Energy Sector to Benefit
On 5 February 2018, the Ministry of Energy and Mineral Resources (“MEMR”) issued a press release announcing the revocation of 32 regulations in the energy and mineral resources sector. Subsequent checking revealed that the bulk, if not all, of the regulations have not yet been revoked but are due to be revoked at some time in the future. However, there is no time line yet as to when this will happen. In the meantime, the MEMR has unofficially stated that the regulations in question will no longer be enforced. In this regard, it is important to remember that until such time as the regulations are legally revoked by another legal instrument of the same or higher status in the legal hierarchy, they remain legally binding, which is something that could have consequences should a dispute involving the relevant regulations subsequently come before the courts.
In the power sector, the ministry has announced that 11 regulations will be revoked, of which 3 are of particular importance to independent power producers (‘IPP”) in the new and renewable power sub-sector, namely:
The revocation of the above regulations will simplify the licensing process and eliminate certain obligations placed on IPPs operating in the new and renewable energy sub-sector, namely:
The MEMR states in its press release that the wholesale revocation of regulations is being undertaken as part of the government’s economic reform program, one of the goals of which is to enhance transparency. While any reduction in the regulatory burden on investors is to be welcomed, one nevertheless has to question the ministry’s commitment to transparency, given the lack of clarity over which regulations have been revoked and which will be revoked in the future. Consequently, we will continue to monitor and report on the situation going ahead. (By: Giffy Pardede: firstname.lastname@example.org & Serafina Muryanti H.P.: email@example.com)DOWNLOAD FILE