The Jakarta Post reported that Indonesian government claims that significant progress has been made in the effort to make Indonesia an Extractive Industries Transparency Initiative compliant country, a step that would improve the reputation of Indonesia’s mining industry.

Under the EITI framework, extractive companies are required to submit data regarding taxes and other payments to the government in regard to their exploration and exploitation activities.

Government institutions, in this case the Finance Ministry and local administrations collecting revenues from the businesses are also required to submit data regarding the revenues. EITI proponents in the country have argued that by being EITI compliant, Indonesia would attract more international investors in extractive industries.

Poor governance in the sector, they have said, makes Indonesia less attractive for foreign investment.

The coordinating economic minister’s deputy for energy and mineral resources, Mr Wimpy S Tjetjep said Indonesia’s EITI secretariat had received almost all reports from both private industry and government institutions. He said that “As of now, about 88% of the companies have submitted their reports to us, while government institutions have completed around 86 percent of their data. If everything goes as planned, Indonesia will become an EITI compliant country and this means more transparency over income from the mining sector.”

He added that “This is a crucial step for the country where income from the mining sector can be utilized as capital for development.”

There are at present 33 EITI-compliant countries. Indonesia is hoping to join the initiative, which is supported by the World Bank, within the next two years. Based on the Office of the Coordinating Economic Minister’s latest data, 15 out of 17 mineral mining companies and 49 out of 54 coal mining companies have completed and submitted their EITI compliance reports.

Source - The Jakarta Post

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