Comparison of Law No.11/1967 (“Previous Law”) and Law No.

4/2009 (“New Law”)

No. 1. 2. Title

Difference

Previous Law Principal Stipulations of Mining. Mining object defined as extractive material. (Article 1 and Article 2 point a) The extractive material is controlled by the State. (Article 1)

New Law Mineral and Coal Mining. Mining object defined as Mineral and Coal. (Article 1)

Mining Object Definition Control of the Mining Object

3.

- Mineral and Coal is controlled by
the State. (Article 4) - Decree on mineral and/or coal priority policy determined by the Government after consulting with the Indonesian Legislative Assembly. (Article 5)

4.

Classification or Grouping of Mining Object and/or Business

a) Strategic extractive material class; b) Vital extractive material class;

a) Mineral mining, consists of: i) Radioactive mineral
mining;

ii)
mining;

Metal mineral

c) Other
(Article 3)

extractive material besides strategic and vital classes.

iii)

Non metal mineral mining; and iv) Rock mining.

b) Coal mining.
(Article 34) 5. Management Authorization Division between Government and Regional Government Divided according to the extractive material: Divided according to the area:

a) Government/Minister manages
the strategic extractive material class and vital extractive material class. (Article 4 point 1)

a) The

Government is authorized to manage mining and coal mining across province and/or sea area of more than 12 mile from the shoreline. (Article 6)

b) Provincial

Regional Government manages the other extractive material besides strategic and vital classes. (Article 4 point 2)

b) The

Provincial Regional Government is authorized to manage mineral and coal mining across regency/city and or sea area of between 4 mile to 12 mile. (Article 7)

c) The Regency/City Regional
Government is authorized to manage mineral and coal mining in regency/city and/or

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sea area up to 4 mile. (Article 8) 6. Mining Area Division It is not stipulated in details, but limited to not include: Mining Area is part of national layout, consists of:

a) Cemetery places, sacred places,
public works places;

a) Mining Area (WUP); b) Populace Mining Area (WPR);
and

b) Other mining work places; c) Buildings, houses or factory
including surrounding land yard, except with the authorization of the concerning party. (Article 16 point 3) 7. Mining License Form

c) National Preservation Area
(WPN). (Article 9 and Article 13)

a) Kontrak Karya (KK); b) Kuasa Pertambangan (KP); c) Surat d) Surat
Ijin Daerah (SIPD); Ijin Rakyat (SIPR). Pertambangan

a) Ijin Usaha Pertambangan
(IUP);

b) Ijin Pertambangan Rakyat
(IPR);

c) Ijin Usaha Pertambangan
Pertambangan Khusus (IUPK). (Article 35)

(Article 10 and Article 15) 8. Mining Stages Consists of 6 stages, which resulted 6 level of Kuasa Pertambangan (KP), as follows: Consists of 2 stages, which resulted 2 level of Izin Usaha Pertambangan (IUP):

a) General Survey or Penyelidikan
umum;

a) Exploration

b) Exploration or Eksplorasi; c) Exploitation or Eksploitasi; d) Processing
& Refining Pengolahan & pemurnian; or

or Eksplorasi, which consists of: i) general survey or penyelidikan umum; ii) exploration or eksplorasi; and iii)feasibility study or studi kelayakan; Operation or Operasi Produksi, which consists of: i) Construction or Konstruksi; ii) Mining or Penambangan; iii)Processing & Refining or pengolahan & pemurnian; iv) Transportation and sales or pengangkutan dan penjualan.

e) Transportation
Pengangkutan; and

or

b) Production

f) Sales or Penjualan.
(Article 14)

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(Article 36) 9. Area License Distribution Procedure Mining area determined in the licenses (KK, KP, SIPD, etc) given by way of filing application with the authorizer.

- Mining License Area of metal
mineral is given by way of auction. (Article 51)

- Mining License Area of coal is
given by way of auction (Article 60)

- Mining License Area of non metal
mineral is given by way of filing application with the authorizer. (Article 54)

- Mining License Area of rocks is
given by way of filing application with the authorizer. (Article 57) 10. Mining Subject according to its License

- KP, SIPD, PKP2B: is given to
local/domestic Investor (PMDN).

- IUP is given to legal entity,
cooperation and person. (Article 38)

- KK, PKP2: is given to Foreign
Investor (PMA).

- IPR is given to local, whether
personal or society group and or cooperation. (Article 67)

- IUPK is given to Indonesian legal
entity, with the priority on BUMN and BUMD. (Article 75) 11. Mining Subject Obligation

- Monetary obligation: a) for KP, in accordance with the b)
prevailing laws and regulations; for KK/PKP2B, in accordance with the signed agreement.

- Monetary obligation: to pay
national and regional income namely tax, PNBP and contribution. (Article 128 to 133)

- Environment: obligated to conduct
good mining practice, management and monitoring of mining environment including conservation, reclamation and post-mining activities (Articles 96 s/d 100)

- Environment: not much stipulated. - Added value: in accordance with the
agreement.

- Utilization of local worker: not
stipulated.

- National interest: obligated to
conduct processing and refining mining product in the country. (Articles 103-104)

- Community development and
empowerment program: not stipulated.

- Utilization of local worker:
obligated to prioritize the utilization of local worker, product

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and service. (Article 106) - Utilization of local entrepreneurs: obligated to involve the local entrepreneurs in conducting production operation activity. (Article 107) - Community development and empowerment program: obligated to arrange a community development and empowerment program. (Article 108) - Utilization of local and/or domestic mining service company: obligated to use local and/or domestic mining service company. 12. Divestment Not stipulated. After 5 years operation, the legal entity holder of the IUP and IUPK which shares owned by foreigner, is obligated to conduct divestment to the Government, Regional Government, BUMN, BUMD or domestic private legal entity. (Article 112)

13.

Guidance & Supervision of Mining Operations Management

For holder of KK, KP , PKP2B are centralized by the government.

- The Government/Minister guide
and supervise the management operations of mining conducted by provincial government and regency/city government. (Article 139 point 1 and Article 140 point 1)

- The Government/Minister may
bestow to the governor in guiding and supervising the management operations of mining conducted by regency/city government. (Article 139 point 3 and Article 140 point 2) 14. Public Protection Holder of KP is obligated to returne the land in such way that it will not cause sickness or other hazardous to public. (Artilce 30) Not stipulated. The public who suffered a negative impact directly have the right to obtain a proper compensation, or to file legal claim. (Article 145)

15.

Investigating Officer in an Investigation

a) Police or POLRI
investigator;

b) PPNS investigator. 4

(Article 149) 16. Criminal and/or Administrative Sanctions for Mining Subject

- He/she who do not hold an KP but
conducted a mining activity, shall be punished by jail in the maximum of 6 years and/or fined in the maximum of Rp. 500.000,-. (Article 31 point 1)

- If a holder of IUP, IPR or IUPK
conducted an administrative violation, then the Minister, the governor or head of regency/city according to its authority may give administration sanctions as follows: a) Written warning; b) Temporary termination of part or whole activity of the exploration or production operation; and/or c) Revocation of IUP, IPR or IUPK. (Article 151)

- He/she who conducted a mining
activity before fulfilling its obligation to the owner of the land, shall be punished by confinement in the maximum of 1 years and/or fined in the maximum of Rp. 50.000,-. (Article 31 point 2)

- Holder of KP who did not met/fulfilled
the requirements under the law or did not conduct the orders and/or instructions under the law, shall be punished by confinement in the maximum of 3 months and/or fined in the maximum of Rp. 10.000,-. (Article 33)

- A person conducting mining
activities without IUP, IPR or IUPK shall be punished by jail in the maximum of 10 years and fined in the maximum of 10 Billion Rupiah. (Article 158)

- Holder of IUP, IPR or IUPK
intentionally provide incorrect report under the law or provide false statement, shall be punished by jail in the maximum of 10 years and fined in the maximum of 10 Billion Rupiah. (Article 159)

- Each person conducting
exploration without owning IUP or IUPK shall be punished by jail in the maximum of 1 year or fined in the maximum of 200 million Rupiah. (Article 160 point 1)

- Holder of IUP Exploration or
Eksplorasi but conducting an operation production activitiy, shall be punished by confinement in the maximum of 5 years and fined in the maximum of 10 Billion Rupiah. (Article 160 point 2)

- Horder of IUP Operational
Production or Operasi Produksi or IUPK Operational Production or Operasi Produksi accommodate, conduct processing and refininf,

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transportation, sales of mineral and coal not from holder of IUP or IUPK, shall be punished by jail in the maximum of 10 years and fined in the maximum of 10 Billion Rupiah. (Article 161)

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