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Indonesia: Breaking down a complex extractives sector

Indonesia: Breaking down a complex extractives sector

EITI Board agrees that Indonesia has made “meaningful progress” in EITI implementation. Aligning the EITI process with broader national objectives will remain vital in the governance of a complex extractive sector.

Indonesia has achieved meaningful progress in implementing the EITI Standard, as agreed by the EITI Board following Validation. While the country’s extractive sector is characterised by complex and decentralised governance systems, efforts to enhance transparency have helped to clarify how and where extractive revenues are being allocated. The EITI process has provided a platform for coordination between various government agencies, enabling better and more disaggregated disclosures on areas such as on licensing, social expenditures and subnational transfers.

“It is heartening to see the progress made on EITI implementation in Indonesia,” commented Helen Clark, EITI’s Board Chair. “More granular information is being published on licenses, social payments and the allocation of extractives revenue sub-nationally. Indonesia’s government has made strides in building systems to routinely publish data from the extractives sector. We urge them to continue this work, align EITI implementation with national priorities and use the EITI as part of their anti-corruption efforts. Indonesia’s growing population stand to benefit from further reform and continuing investment.”

Indonesia’s EITI Reports have helped clarify financial flows between companies and central and subnational governments. In addition, these reports identify opportunities for reforms in government oversight of state-owned enterprises and their accountability to the broader public, at a time when the government is restructuring its interest in the mining sector.

Indonesia has also taken steps to make sector information accessible online through routine disclosures. One Map Indonesia, for example, is a publicly accessible license portal that shows where and to whom mineral licenses are allocated.  

While acknowledging the progress made, the Board’s decision underscores the importance of sustained political commitment and meaningful participation of industry and civil society in EITI implementation. The Board further encouraged stakeholders in Indonesia to ensure that EITI data is leveraged for policy-making and public debate, and that there is public information available to stakeholders at a local level.

Indonesia will have 18 months to address the recommendations arising from the Validation process.


Notes to Editors

About Validation

The EITI holds all implementing countries to the same global standard. During the Validation process – the EITI’s quality assurance mechanism – each implementing country is evaluated on their degree of progress in implementing the EITI Standard.

Validations are intended to provide all stakeholders with an impartial assessment of whether EITI implementation in a country is in line with the provisions of the EITI Standard. The Validation report, in addition, seeks to identify the impact of the EITI in the country being validated, the implementation of activities encouraged by the EITI Standard, lessons learnt in EITI implementation, as well as any concerns stakeholders have expressed and recommendations for future implementation of the EITI. The outcome of a Validation report is an overall assessment of Satisfactory, Meaningful, or Inadequate progress.

More information about the Validation procedure can be found on EITI’s Overview of Validation page.

Photo by Tom Fisk from Pexels