BANI is Willing to Settle Mining

The Indonesian National Board of Arbitration (Badan Arbitrase Nasional Indonesia – BANI) said that it is available to act as a third party (alternative dispute resolution) in order to settle disputes over mining permits (izin usaha pertambangan – IUP); public mining permits (izin usaha pertambangan rakyat – IUPR); and special mining permits (izin usaha pertambangan khusus – IUPK).

This was stated in a BANI response letter, numbered 11.821/VI/BANI/HU and signed by Husseyn Umar, a BANI board member. The letter answered a question from Bimo Prasetio, a lawyer at Adisuryo Prasetio & Co., on Wednesday (6/7).

Pursuant to Article 154 of Law No. 4 of 2009 on Coal and Mining, disputes regarding IUP, IPR, or IPK can be resolved in court and through domestic arbitration, in accordance with the prevailing laws and regulations.
Bimo, however, thought that the word “and”, in the sentence “court and arbitration” had a cumulative meaning, which means that a mining dispute should be settled both in court and through arbitration. “This is counter productive, since a permit dispute could only be resolved by an administrative court (pengadilan tata usaha negara – PTUN),” Bimo explained.

Meanwhile, BANI stated that if this is what the Mining Law means, BANI will not have any objections to processing disputes. “The disputing parties, however, will choose which institution they wish to settle their dispute,” Hussyen asserted.

Hussyen further emphasized that parties can settle their dispute, either in a court or through non-judicial means, such as arbitration. “If the parties wish to settle their dispute through arbitration, they must include an article on arbitration in their agreement,” he added.

On the other hand, Irwandi Arif, a mining analyst, prefers having a single institution to settle mining disputes. “It’s better to use only one institution, court or arbitration,” he said, on Friday (22/7).

Satya W Yudha, member of Commission VII of the House of Representatives (DPR), had a different opinion. He said that the word “and” is not cumulative. “Another interpretation is that the word ‘and’ is a form of order, not simultaneous,” he explained.

Article 5 (1) of Law No. 30 of 1999 on Arbitration and Alternative Dispute Resolution stated the types of trade disputes that can be solved by BANI. The trade disputes listed in the Law includes mining dispute between the Indonesian government and investors.

Article 154 of the Mining Law, however, did not clearly state what kind of settlement is allowed for disputes that are based on the work contract (kontrak karya).

Satya also had different opinion regarding Article 154. “Only mining companies that have already obtained a permit that can settle their disputes in court and BANI. Whilst illegal mining companies can’t,” he asserted. Satya also added that the court and BANI could settle other disputes, not just permit-related disputes.

Husseyn stated that dispute settlement through arbitration could be conducted in an ad hoc form. Therefore, the dispute has to be settled in the institution that has been appointed by the parties, as long as there are no changes on the agreement.

Furthermore, the disputing parties could always settle their disputes in the International Chamber of Commerce (ICC), or Singapore International Arbitration Centre (SIAC).

(Latifah K. Wardani / Pirhot Nababan)


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