Arya News - Energy minister Bahlil Lahadalia insists that cooperatives and religious will remain eligible for priority mining licenses after the Constitutional Court struck down direct appointments, pledging to introduce new implementing regulations accordingly to ensure transparent vetting.
JAKARTA – President Prabowo Subianto’s administration will introduce new regulations to establish transparent procedures for granting priority mining permits to cooperatives and religious organizations, after the Constitutional Court ruled that the government cannot directly appoint recipients.
Energy and Mineral Resources Minister Bahlil Lahadalia revealed the plan on Monday, saying either a ministerial regulation or a ministerial decree would be issued to create a selection mechanism for priority mining business license area (WIUP) recipients.
“The priority [mechanism] will remain in place. But the court stated that there must be clear mechanisms and regulations in place. We believe the court’s decision is a positive step because we also want the entire process to be conducted transparently,” Bahlil said.
Under the planned new regulations, Bahlil said entities seeking to manage mining operations would now have to meet certain requirements, including being based in the area where the mining activities are located.
In its ruling last week, the court declared that the central government can grant “priority allocations” of mining concessions to cooperatives, small and medium enterprises (SMEs) and businesses owned by religious organizations only through clear parameters and transparent assessment and not through a direct appointment.
The court held that a selection process should be established under the priority allocation mechanism to ensure fairness and equal treatment, noting that not all applicants have the same level of capacity, experience or resources to participate in the sector.
The ruling was made on a case challenging the 2025 Mineral and Coal Mining Law, which was passed last year under Prabowo and followed a regulation signed by his predecessor Joko “Jokowi” Widodo in his final months in office that allowed religious groups to manage state-owned mining concessions. Critics described the policy as “pork barrel politics” to reward groups for supporting Jokowi’s presidency and his preferred successor Prabowo.
The government’s fresh plan to introduce technical guidelines governing priority mining permits immediately drew criticism from activist group the Indonesian Forum on Environment (Walhi), which has opposed granting mining concessions to mass organizations from the beginning.
WALHI campaign coordinator Uli Arta Siagian said the plan would not address the underlying environmental concerns associated with expanding mining activities.
“Mining activities are inherently damaging, so the government should already be moving toward limiting extractive industries, not expanding them [to mass organizations],” Uli said on Tuesday, arguing that expanding mining permits would undermine Indonesia’s climate commitments and efforts to move away from an extractive economy.
Indonesia’s largest Muslim organization Nahdlatul Ulama (NU) became the first to receive a mining concession, securing a permit in 2024 for a coal mining area of more than 26,000 hectares in East Kalimantan. Last year, NU established a business unit to manage the mine.
Muhammadiyah, the country’s second-largest Islamic organization, was also expected to receive a coal mining concession in South Kalimantan, after it initially rejected the offer. The group had also formed a company to oversee the mining project, but the government said in July that the mining area was still under review.
Read also: New Mining Law paves legal way for concessions for religious groups
Asked whether last week’s ruling would affect mining permits already granted to appointed recipients, including NU, Bahlil stressed that existing permits would remain valid.
“The ruling does not apply retroactively, and none of the provisions that were challenged have been annulled. Nothing has been revoked, so there is no problem [with the existing permits],” Bahlil said.
Both NU and Muhammadiyah said they respected the ruling requiring a more transparent process for awarding priority mining permits, with NU executive Ulil Abshar Abdalla saying his organization was ready to return its mining concession if required, although he believed the ruling did not apply retroactively.