Jakarta – Mines and Energy Minister, Purnomo Yusgiantoro, yesterday said that despite the grant of regional autonomy, oil and gas industry operations will still be controlled by the central government, although other aspects of the mining sector may be handed over to the regions.

Purnomo said certain regencies considered ready for regional autonomy will have the right to handle certain mining operations, as well as issue mining laws in line with central government laws and policies.

Due to poor human and natural resources, not all regencies have the ability to manage their regions. Classification of regencies is therefore necessary.

Purnomo added the government will also set up a consultative team prepare the regencies to handle foreign investment in mining. The team will consist of government officials, representative of non-government organizations and representatives from the private sector.

The team will be tasked with publicising laws relating to foreign mining investment to the provinces, Purnomo told those present at a recent informal discussion here.

He noted that while regional autonomy would be effective January 1, 2001, a transition period would be in force between November 6 and January 1, 2000. During this period, both the central and regional governments are not permitted to make any strategic decisions relating to the mining industry.

Mining sites that straddle two regencies will be controlled by the two provinces as well as the central government.

The minister also appealed to industry executives to set up a development project for the community living near mining areas to enable a better standard of living.

Director General of the Mines and Energy Ministry, Surna Tjahya Djajaningrat also asked foreign investors to adopt a wait and see attitude on possible fresh investment, and wait until the new laws take effect.

Under (original) working contract agreements, arrangements were made between the (central) government and foreign contractors. But in the case of the regencies, foreign investors are bound to require clarification, Surna said.