Jakarta – Senior economist Faisal Basri has testified that he once met with the Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan (Menko Marves) and warned him of a potential conflict of interest related to the coal extractive industry.
This was conveyed by Basri when he was presented as an expert witness during a hearing at the East Jakarta District Court on Monday October 30 in the trial of human rights activists Haris Azhar and Fatia Maulidiyanti who are defendants in a case of defamation against Pandjaitan.
"I once met with Pak [Mr] Luhut, I said that his problem is just one, namely a conflict of interest. The Pak minister manages the extractive industry, his policies have the potential to create a conflict of interest", Basri said before the panel of judges presided over by Judge Cokorda Gede Arthana.
Faisal gave an illustration of this saying that in 2022 revenue from coal was worth more than 1,000 trillion rupiah, reaching a quarter of the total revenue from Indonesia's exports. This increase was in the context of the war between Russia and Ukraine.
"And 100 percent of this windfall income was enjoyed by the coal tycoons. None was taken by the state [in taxes]", said Basri.
Basri said that countries like the United States, Australian and all of the countries in the European Union apply tax policies on such "fallen durian" (windfalls). Moreover, he continued, Mongolia applies a 70 percent tax for the state on coal income.
"I proposed to the Menko Marves, the Menko Perekonomian [Coordinating Minister for Economic Affairs], the ESDM [Energy and Mineral Resources] Minister and so on that we use a 'fallen durian' tax", said Basri.
"The minister [Pandjaitan] said, 'Oh, that would be great too, yes. Later I'll talk to the finance minister', Pak Luhut said to me", added Basri.
"But, to this day there's been nothing, because I forgot that Pak Luhut has coal [interests]. So, it was a conflict of interest that was so very real. I met with the person concerned personally, Your Honor", he reiterated.
Aside from the tax incentive, Basri gave another example of a conflict of interest related to the extractive industry, namely revisions to regulations and laws (UU).
"[Tax incentives], among others, there are still many more. 'I have power, I have a big influence on revisions to the law. I revised the law in the process at the DPR [House of Representatives] with a quick process so that when my coal [mining contract] expired the concession period could be automatically renewed until the coal is used up'", said Basri.
"What law was that?", asked Azhar and Maulidiyanti's lawyer Nurkholis Hidayat.
"The Minerba [Mineral and Coal Mining] Law", replied Basri.
Basri added that coal dust has created pollution and threatens people's health.
"Coal creates pollution, emits dust. Before it was categorised as dangerous waste. The new law, the Omnibus [Law on Job Creation], removed it from the list of dangerous waste so it was no longer considered dangerous, Your Honor", said Basri.
"My God, Your Honors, I couldn't imagine a [legal] revision process that was so very fast, in a short space of time the law was issued in the interests of a handful of people", he concluded.
Azhar and Maulidiyanti have been indicted under Article 27 Paragraph 3 in conjunction with Article 45 Paragraph 3 of the Information and Electronic Transaction (ITE) Law, Article 14 Paragraph 2 and or Article 15 of Law Number 1/1946, and Article 310 of the Criminal code (KUHP). Each of these articles are in conjunction with Article 55 Paragraph 1 of the KUHP.
A number of witnesses have appeared since the trial began, including Pandjaitan who testified before the panel of judges. Azhar and Maulidiyanti meanwhile have refused to testify against each other. (ryn/wis)
[Translated by James Balowski. The original title of the article was "Sidang Haris-Fatia, Faisal Basri Akui Pernah Bertemu & Ingatkan Luhut".]