LOCAL INNOVATION : OIL/GAS TRANSPARENCY MECHANISMBLORA DISTRICT
LOCAL INNOVATION : OIL/GAS TRANSPARENCY
MECHANISMBLORA DISTRICT
Jakarta, May 23rd 2012
Basic Problem
Revenue Sharing Mechanism: A mere socialization Local Govt. do not have the necessary data for calculating
revenue Production data (update real time production) cost recovery per oil/gas block Oil/gas deposits/reserveField development data (Example: PoD and WP&B)
Corporate Social Responsibility Lack of coordination in CSR-CD implementation (local govt.
only receive reports after the implementation is done) Environmental Impact
Lack of socialization & simulation over environmental impact treatment
Objectives of Transparency Mechanism
To make transparent of information on revenue, CSR-Comdev and information on mitigation and environmental impact of oil/gas mining
To build dialog and constructive multi-stakeholders mediation
Provide input on data and information for local development planning and budgeting
Stages of Process
Study Study on local problems related to revenue, CSR and environment Study on rules and regulations Research on oil/gas revenue flow and transparency aliran penerimaan dan
transparansi Migas Model Development
Multi-stakeholders discussion: formulating model/transparency mechanism Agreed upon formulated model Legal Drafting in local level
Advocacy and campaign Local regulations advocacy Seminar, workshop, media campaign, and sharing lesson learn
Implementation and Institusionalization Formation of Transparency Team (Regulation from Head of Municipal/Bupati) Budget advocacy for Transparency Team Working meeting of Transparency Team Socialization and Publication Facilitating over local issues (PPGJ, Old Well, CSR, etc) Advocacy to Central Government
Transparency Mechanism Model
Implementing Institution Oil/Gas Transparency Team- Multi-stakeholders (Local Govt,
Company, Civil Society) Legal Based
Head of Municipal Regulation (Peraturan Bupati) No. 65/2010
Type of information to be made transparent : Revenue Information Social/Environment Information CSR Information
Funding Local Bugdet (APBD) and other legal funding
Working mechanism: Sosialization and Information publication; Multi-stakeholders Dialog; Policy Advocacy to central govt.; conduct studies /or forming working group
Membership and Funding
Member of Oil/Gas Transparency Team in Blora district consist of 20 person from various stakeholders
Selected stakeholder mostly invovled in the process since the very beginning
Involved Stakeholder: Executive (Assistant II, Local Development Planning
Body/Bappeda, Environment Office/Dinas LH, Energy and Resource Office/Dinas ESDM, Law Section, Economy Section)
Legislative (Commission B DPRD) NGO Media Mining Society Group Association of Mining Workers Local Companies
Team Main Duty (As mandated in Bupati regulation)Article 5: Duties and FunctionI. Formulate working agenda and
implement extractive industry transparency mechanism
II. Conduct strategic studies and formulate policy recommendation to related stakeholders
III. Conduct assessment, socialization and publication to the society, working result , and data of extractive industry
Work Plan
Work Meeting conduct every once a year to formulate Work Plan for the next one year
Sample of work plan from Transparency Team in Blora (2012):1. Build Revenue Working Group and CSR-Environment
working group--> to focus team’s work2. Revenue Working Group: to continue Blora’s revenue
sharing/DBH advocacy (Blora do not receive DBH from Cepu block since DBH sharing based on the location of the mouth the well located in BojonegoroCSR & Environment working group: to support trasnparency and the improvement of environment management and CSR by companies
3. To agreed upon tranparency mechanism that has not been regulate yet under the Bupati regulation
Transparency’s Working Mechanism
Transparency Mechanism: Data collection:
Every related institution and companies provide data to transparency team every quarter
Create medium for socialization: leaflet and media release
To be published per quarter Content of publication materials: Activity report and
Tranparency Team Achievements, Data Lifting, Realization of oil/gas revenue sharing/DBH, Realization of PI revenue sharing, oil/gas tax, Data on old well management, Data on CSR by oil/gas companies
Transparancy Mechanism
Companies Central Govt.
Transparency Team
Public/Society
Related Local Govt. Unit
-Collecting Data-Analyzing Data-Formulating information
Achievements of Transparency Team|2011-2012
2012: Publication of Information: Data on DBH,
Old Well, team’s working result, budgeting, in the form of leaflet and media release
Workforce mediation: Mediation between citizens, companies and
local govt. due to citizens complaint over Pertamina project PPGJ in Sumber village, Kradenan
Advocacy on Cepu block oil/gas DBH to central government (wich was still consider unfair by Blora)
1. Policy advocacy for oil/gas DBH in Cepu Block
Considering option to initiate Letter of Joint Agreement/SKB from 3 ministries to give DBH to Blora; has been discussed with the three ministries (ESDM, Keuangan dan Dalam Negeri)
2. Actively involved in Judicial Review of UU 33 2004
about Financial Balance (becomes expert witness)
3. Mediator between citizen and companies Facilitating agreement to resolve problem
as stated in Berita Acara/BA. BA will serve as reference document for parties during the resolving process
Achievements of Transparency Team|2011-2012
Lesson Learn
Building trust Trust between stakeholders – main key Need approaches and process in order for society, companies,
and local government to sit together and to agreed upon a joint initiative.
Transparency and ‘beyond transparency’ Transparancy trigger the improvement of performance of the
mining companies—certain intervention from the local govt. and the society with specific institution and organized work
Transparency itself isn’t enough, start to conduct mediation Innovation and Institutionalization
Building model phase- the role of champion (from each parties) is vital
Next important stage– institutionalization within the system (perbub/Bupati regulation, detail implementation rules, local budget for funding, mechanism for monitoring performance, etc)
Challenges Time needed to encourage the government to be transparent in
revenue sharing/DBH In the reconcilitaion of DBH today, there is aggregate information on cost recovery
The involvement of contractor (KKKS) in the Transparency Team is not formal yet Internal bureaucracy issues and interpretation of law product KKKS was an active obervant
Change of actors- the position within companies and government often change, resulting in certain process during the changing of team member
Policy improvement needed: Encouraging transparency mechanism to have stronger legal based (perda) Encouraging the revision of oil/gas regulation so the local govt. can have maximum
involvement in managing oil/gas
The need to replicate the mechanism to other resource-rich region
Terima KasihThank You