Richard C. Adam
Universitas Tarumanagara, Jakarta, Indonesia.

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From Contract of Work to Licensing Regime: Balancing State Sovereignty and Legal Certainty in Indonesia’s Mining Law Transformation Mohamad Syah Indra Aman; Richard C. Adam
Greenation International Journal of Law and Social Sciences Vol. 4 No. 2 (2026): (GIJLSS) Greenation International Journal of Law and Social Sciences (May - Jun
Publisher : Greenation Research & Yayasan Global Resarch National

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.38035/gijlss.v4i2.833

Abstract

The transformation of Indonesia’s mining legal framework from the contract of work regime to the licensing regime represents a significant restructuring of the relationship between the state and investors in the governance of natural resources. While this shift reflects an effort to strengthen state sovereignty and enhance regulatory control over strategic resources, it also raises complex questions regarding the evolving nature of legal certainty in investment activities. This study aims to critically examine the comparative characteristics of both regimes and their implications for legal certainty within Indonesia’s mining sector. The research employs a normative juridical method supported by statutory, conceptual, and comparative approaches. The findings indicate that the relationship between contractual stability and administrative flexibility is not strictly dichotomous, but rather reflects a dynamic tension shaped by regulatory design, institutional practice, and governance objectives. Although the licensing regime increases state discretion in resource management, its impact on legal certainty is contingent upon regulatory consistency and institutional coherence, rather than the regime itself. This study concludes that the transformation of mining law should not be interpreted as a linear decline or improvement in legal certainty, but as a complex reconfiguration of legal governance that requires a more balanced approach between state authority, investor protection, and sustainable resource management.
An Economic Analysis of Law on Legal Certainty in the Transition from Contract of Work to Licensing Regime in Indonesian Mining Law Mohamad Syah Indra Aman; Richard C. Adam
Greenation International Journal of Law and Social Sciences Vol. 4 No. 2 (2026): (GIJLSS) Greenation International Journal of Law and Social Sciences (May - Jun
Publisher : Greenation Research & Yayasan Global Resarch National

Show Abstract | Download Original | Original Source | Check in Google Scholar | DOI: 10.38035/gijlss.v4i2.836

Abstract

This study examines the transition from the Contract of Work regime to a licensing-based regime in Indonesian mining law through the lens of Economic Analysis of Law, focusing on legal certainty, regulatory efficiency, and transaction costs. The transformation reflects a shift from contractual governance toward an administrative framework that redefines the relationship between the state and investors. This change raises a fundamental tension between investment stability and strengthened state control over natural resources. The objective of this study is to analyze how this institutional transition affects legal certainty and economic efficiency in the mining sector. This research employs a normative juridical method combined with a law and economics approach, operationalized by examining changes in transaction costs, regulatory predictability, and the distribution of authority. The findings indicate that the licensing regime may improve administrative efficiency and reduce coordination costs through centralized control, yet it simultaneously increases regulatory uncertainty and discretionary risks that affect legal predictability. This study argues that the relationship between efficiency and legal certainty is mediated by the quality of regulatory governance. The novelty lies in integrating legal certainty and transaction cost analysis to explain the governance implications of mining law reform in Indonesia.