State Control over Natural Resources in Indonesia: Implications of the Oil and Natural Gas Law Case of 2012

Abstract

In late 2012, the Indonesian Constitutional Court disbanded BP Migas – the institution the Indonesian Government had established to regulate and monitor the oil and gas sector. A majority of the Court decided that BP Migas exerted insufficient control over the sector, thereby violating Article 33 of Indonesia’s Constitution. In particular, the majority held that Article 33 required that the state maintain virtually unbridled control over the sector, including by directly managing upstream activities. This article sets out the Court’s reasoning in this case and critiques it. It also speculates on the likely implications of the decision, particularly for other natural resource sectors, in which many foreign investors are involved.

Additional information

Notes on contributors

Simon Butt

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Simon Butt is Associate Professor, Sydney Law School, where he teaches and researches Indonesian law. Fritz Edward Siregar is a SJD Candidate, University of New South Wales and Researcher, Sydney Law School. Mr Siregar previously worked at the Indonesian Constitutional Court as a judge’s associate. The authors can be reached at, respectively, [email protected] and [email protected].

Fritz Edward Siregar

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Simon Butt is Associate Professor, Sydney Law School, where he teaches and researches Indonesian law. Fritz Edward Siregar is a SJD Candidate, University of New South Wales and Researcher, Sydney Law School. Mr Siregar previously worked at the Indonesian Constitutional Court as a judge’s associate. The authors can be reached at, respectively, [email protected] and [email protected].