Afghania Dwiesta
Universitas Indonesia

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INDONESIA’S UPSTREAM PETROLEUM GOVERNANCE REFORM: WHICH MODEL IS CONSTITUTIONAL ENOUGH? Dwiesta, Afghania
Indonesia Law Review Vol. 8, No. 3
Publisher : UI Scholars Hub

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Abstract

The Indonesian Constitutional Court abruptly annulled provisions regarding the function of BP Migas as state representative in managing upstream oil and gas operations in Indonesia, declaring it unconstitutional. Apparently, the Court was convinced that exercising absolute state control over hydrocarbon operations would give the utmost benefit to the people. This research argues that in achieving such goals, a state must be able to create strong administrative infrastructure and regulatory regime capable of controlling and supervising hydrocarbon operations in accordance with both national and international oil fields. Using a comparative study method with secondary data collection, this research observes Norway’s, Mexico’s, Malaysia’s, and Russia’s experiences as its underlying methodology. It examines the Court’s interpretation of “control” and “ownership” over hydrocarbon operations and provides possible solutions for the most effective and suitable institutional design for BP Migas’ replacement. Finally, it concludes that to fulfill the constitutional mandate, the government’s ability to manage oil and gas sector depends on how much it is willing to consistently: (i) implement good corporate governance among related stakeholders so as to lessen political interference in the decision-making process, and (ii) maintain the balance of ex ante procedures and the post ante monitoring system in the adopted institutional model.
INDONESIA'S ENERGY SECURITY: ARE WE SECURING IT RIGHT? LESSON LEARNED FROM THE EU Dwiesta, Afghania
Indonesia Law Review Vol. 7, No. 3
Publisher : UI Scholars Hub

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Over the past few years, one of Indonesia’s state-owned enterprises, PLN, has conducted dialogues focusing on developing a new value-creative business model to transform itself, a sleepy regulated utility, into a truly competitive electricity service provider. However, efforts to preserve the prominence of the Country’s electricity sector have been ongoing as the sector is still experiencing sustained rolling blackouts, net import dependency and lack of transmission facility enforcement throughout the Indonesian archipelago. Such efforts have been varied from the incentivise policy and programs such as the Public-Private Partnership and the two phases of Fast Track Program. The reformation of electricity law dated back on the 1985, 2002 and 2009 to attract investors in the development of Indonesia’s electricity sector have been enacted, but a controversial issue arose from the annulment of the Law No. 20 Year 2002 on Electricity by the Constitutional Court Decision No. 001- 021-022/PUU-I/2003 stating that such law which clearly stating that the requirement to privatise electricity operation was unconstitutional. This article will try to provide a comprehensive comparative analysis of such decision with the common practice adopted by the EU which has successfully implemented its deregulation and separation of the electricity’s business chain through unbundling the sector as part of liberalisation.