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Indonesia Introduces EITI Principles for Securing Energy and Improving Investment Climate in ASEAN

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Jakarta (IESR). On 9-10 August 2011 Coordinating Ministry for Economic Affairs, Ministry of Energy and Mineral Resources and Ministry of Foreign Affairs were hosting the Regional Workshop: Securing ASEAN Energy Supply: Learning from Best Practice and Global Standards to Improve Investment Climate. The Workshop was held at Hotel Borobudur, Jakarta attended by 30 participants from five ASEAN member countries: Cambodia, Laos, Indonesia, Malaysia and Philippines, and presenting speakers from Timor Leste, Norway and other international institutions.

The workshop plan has been scheduled in the agenda of Indonesia’s Chairmanship in ASEAN. Indonesia had initially proposed this plan at the Senior Official Meeting on Energy (SOME) on 29 June-1 July in Brunei Darussalam and responded positively from ASEAN delegations

During two days, the participants have been discussing about non-technical aspects of energy security in ASEAN. One of those aspects was good governance to support investment climate. In this regard was the implementation of Extractive Industries Transparency Initiative (EITI)-the international quality assurance for governance of extractive industries revenue.

The Government of Indonesia believes that EITI can play important roles in promoting investment in ASEAN. Finding from EITI implementation countries shows that by implementing EITI, country attracts more business and investors in extractive industries (oil, gas and minerals). EITI can address part of the underlying cause of political instability in many resources rich countries through participation and dialogue among stakeholders (government, business and investors and civil society).

Fabby Tumiwa, Executive Director of Institute for Essential Services Reforms (IESR) welcomed the initiative from Government of Indonesia in introducing and encouraging EITI implementation in ASEAN. Fabby said principles of EITI are in accordance with the principles in ASEAN Charters and ASEAN pillars would a gateway for ASEAN to adopt and support the implementation in ASEAN

“We from Civil Society Organizations are supporting ASEAN to encourage its member countries to implement EITI as the initiative,” said Fabby. However, he also emphasized it is important for ASEAN to review the implementations from other standards-not only conclude on EITI-so that ASEAN will have comprehensive standards in managing natural resources as support to a sustainable development.

Chandra Kirana from Revenue Watch Institute (RWI) said essentially EITI could help ASEAN member countries in generating revenue from the extraction of natural resources and contribute to their economic development.

“If those countries can maximize their revenue from the extractive industries there will be a wider fiscal term in budget allocation for poverty reduction and sustainable development.” said Chandra

Indonesia has already implemented EITI principles since last year. On April 23, 2011 President of Indonesia released a decree on Transparency of National/Local Government of Extractive Revenues. Indonesia is now the first country of ASEAN releasing a regulation for EITI implementation as well as the first country in this region officially accepted as the EITI candidate country. Nowadays, the secretariat is preparing the first EITI Indonesia report, the report scheduled to be available by the end of this year

Fabby Tumiwa added, EITI can be a platform to improve country’s revenue from unrenewable natural resources. Optimizing revenue through a transparent fund flow will improve national income. So that the rich hydrocarbon countries would start investing their fund for research and invention for renewable energy technologies and securing energy supply in the future as hydrocarbon reservation is getting declining.

At the end of the workshop the participants agreed on “Outcome Document” covered six action plans of developing joint- study, working group in ASEAN for EITI promotion and dialogue forum among stake holders in ASEAN which facilitated by ASEAN Secretariat and the Government of Indonesia

Results of the regional workshop will be reported by Indonesia delegation on SOME summit and ASEAN Ministerial Meeting on Energy in next September.

Institute for Essential Services Reform (IESR), Revenue Watch Institute (RWI) and EITI Indonesia secretariat also supported for this workshop.

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