Implementation of Beneficial Ownership Transparency within the Ministry of Energy and Mineral Resources Energy and Mineral Resources

In the discussion entitled “Disclosure of Beneficial Ownership Data/information: Opportunities and Challenges” held by PWYP, on Thursday, September 30, 2021. The Centre for as the Secretariat of EITI Indonesia, participated in discussions regarding efforts that has been done by MEMR related to beneficial ownership. Disclosure of data / information regarding the ownership of corporate benefits, or Beneficial Ownership (BO) has invited interested governments, financial institutions, banks and also the corporation itself. The disclosure of BO data/information is expected to improve the investment climate by reducing financial risks for investors and at the same time creating a fair business climate. The practice of openness of BO data/information to the public in various countries has shown a precedent in minimizing the risk of corporate abuse as well as encouraging the prevention and handling of financial crimes and corruption that can harm the corporation itself, the public as well as the climate and investor confidence.

As the implementing country for the Extractive Industries Transparency Initiative (EITI), Indonesia has also prepared an BO Openness Roadmap in 2017. The roadmap includes the following stages: 1) Defining BO for the Indonesian context; 2) development of institutional framework and legal transparency of BO; and 3) data verification and open access to the public. Still in the context of EITI, Indonesia has recently also become 1 (one) of 9 (nine) countries in the world that are committed to participating in Opening Extractives, an initiative under the supervision of EITI to accelerate the implementation of BO transparency.

Agus Cahyono Adi, Kapusdatin ESDM said that the MEMR has made regulations, namely through the Decree of the Minister of Energy and Mineral Resources Number 243 K/08/2019 concerning the obligation to include NPWP and beneficiaries in submitting applications for licensing and reporting in the ESDM sector, which is the basis for policies in accelerating the implementation of Beneficial transparency. Ownership in the ESDM sector. In addition, the Ministry of Energy and Mineral Resources is currently building a BO ESDM application that is integrated with Beneficial Ownership Data through a mechanism web service/ API (Application Programming Interface) belonging to the Directorate General of General Legal Administration – Ministry of Law and Human Rights, and Taxpayer Identification Number Data belonging to the Directorate General Taxes – Ministry of Finance. The Ministry of Energy and Mineral Resources is also integrating the BO ESDM application with the Business Licensing System. However, for now, the implementation is in the pilot stage and ensures that licensing at the Ministry of Energy and Mineral Resources runs in accordance with PP 5/2021.

Unfortunately, there are still some obstacles in the stage of strengthening BO itself, such as compliance with business actors, as well as related to BO verification and validation. Efforts to improve are also being carried out by the Ministry of Energy and Mineral Resources, among others, (1) increasing compliance using regulations so that the implementation of BO Data runs optimally, which is clearer in collecting BO Data; (2) coordinate with the Ministry of Law and Human Rights to be able to coordinate and provide guidelines that apply nationally as the basis for verification of beneficial ownership data by verifiers; (3) It is necessary to have a regulation containing a black list or database that applies nationally as a basis for licensing verifiers in the ESDM sector to be able to reject licensing applications submitted by business actors who do not meet the provisions of legislation in the field of taxation or fulfill the elements of money laundering as referred to in paragraph (1). regulated in the provisions of the relevant laws and regulations.