Beneficial Ownership Transparency in Extractive Industry is a Global Concern, Says Official

MINISTRY OF ENERGY AND MINERAL RESOURCES

REPUBLIC OF INDONESIA

PRESS RELEASE

NUMBER: 458.Pers/04/SJI/2021

Date: 14 December 2021

Beneficial Ownership Transparency in Extractive Industry is a Global Concern, Says Official

The Extractive Industries Transparency Initiative (EITI) encourages transparency in the management of oil, gas, coal and mineral resources, such as through the principle of Beneficial Ownership (BO) transparency.

"Disclosure of BO information is becoming increasingly a global concern. International standards of financial transparency and the standards in the prevention and eradication of money laundering and terrorist funding emphasize the regulations and mechanisms to identify the beneficial owners of a corporation in order to obtain accurate, current, and publicly available information about beneficial owners," said Advisor to the Minister of Energy and Mineral Resources for Natural Resource Economy, Sampe L. Purba, in a webinar titled Beneficial Ownership Transparency: Why is It Important for Extractive Companies, on Tuesday (14/12).

Sampe went on to say that the government had developed systems for collecting data on beneficial ownership. The Ministry of Law and Human Rights has a database application of the BO of all companies. The Ministry of Energy and Mineral Resources (EMR) also has a database application of the BO of mining companies, which is integrated with the one belonging to the Ministry of Law and Human Rights.

"This application is expected to promote compliance and help corporations achieve better accountability goals, in oil, gas, and mining extractive industries," added Sampe.

The availability of BO information facilitates companies to negotiate business more transparently. In addition, such information helps companies conduct business investment due diligence at lower costs.

"In contrast, the unavailability of beneficial owner information can cause problems for companies, because companies do not know who they do business with. Not many companies are aware of how Beneficial Owner disclosure can support a level playing field in doing business. Also, not all companies are aware that transparency about actual owners can reduce reputational and financial risks," said Sampe.

In the closing remarks, Head of the Center for Data and Information Technology of the Ministry of EMR, Agus Cahyono Adi, emphasized that the management of natural resources by the extractive industry in Indonesia can be held accountable. In this digital era, all data and information are increasingly transparent.

"In essence, the world is becoming more transparent because we cannot hide, we cannot erase digital footprints. Even if we hide or cover them up, people will be suspicious. In this forum, let's show the public that the management of natural resources, the extractive industry, can be held accountable. We are accountable to God, the community, and the next generations," Agus concluded.

This webinar was attended by stakeholders from the extractive industry, such as representatives from gas company BP Tangguh, mining company PT Freeport Indonesia, KUD SUPPME--a community cooperative engaged in extractive business, and non-profit organization Open Ownership.

The webinar panelists included the Civil Law Director of the Ministry of Law and Human Rights, Senior Executive Analyst of the Handling of Anti-Money Laundering and Prevention of Terrorist Funding Group of the Indonesian Financial Services Authority (OJK), and Legal Affairs Director of the Indonesian Financial Transaction Report and Analysis Center (PPATK).

For the record, Indonesia has regulated the disclosure of BO information through Presidential Regulation Number 13 of 2018 on the Application of the Principle of Recognizing Beneficial Owners of a Corporation in the Context of Prevention and Eradication of Money Laundering and Terrorist Funding. (IY)

Head of Bureau of Communication, Public Information Services, and Cooperation

Agung Pribadi (08112213555)

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