Country:Indonesia
Year:2014
Policy status:In Force
Jurisdiction:National
Date Effective:2014
Policy Type:Regulatory Instruments
Policy Target:Energy Sector>Electricity Generation>Renewable>Geothermal, Energy Sector>Electricity Generation>Renewable
URL:http://www.hhp.co.id/files/Uploads/Documents/Type%202/HHP/al_jakarta_newgeothermallaw_oct14.pdf
URL:http://www.elexica.com/en/legal-topics/projects/29-indonesia-relaxes-regulation-of-the-geothermal-market
Penalty:There are two levels of penalties: administrative and criminal. Minor breaches may result in administrative sanctions, such as warning letters and temporary suspension of activities or revocation of a license. More serious breaches may result in criminal sanctions, including prison sentences (up to seven years) and/or fines (up to US $7 million). Serious offences could include conducting geothermal activities outside the allowed working area, or without a license, and hindering geothermal activities.
Description:

The New Geothermal Law (No. 21 of 2014) - was recently issued to replace Law No. 27 of 2003 on Geothermal ("Old Geothermal Law").

The New Law relaxes the old legal and regulatory framework. The main changes introduced by the New Law include:

  • geothermal activities no longer considered ‘mining activities’: because mining activities are prohibited (exploration or exploitation) in high conservation value forest areas, previous classification of geothermal as mining severely limited geothermal development activities.
  • distinction between direct and indirect utilization 
  • new restrictions on the transfer of licenses and shares in entities holding such licenses
  • concept of a mandatory ‘production bonus’: whereas the Old Law was vague as to requirements regarding payments, the New Law introduces a mandatory production bonus payable to the local government in which the geothermal field is located.
  • centralization of the tender process for indirect utilization projects
This record supersedes:Old Geothermal Law (No. 27/2003)

Last modified: Fri, 20 Mar 2015 16:45:50 CET