THE CONFORMITY OF REGULATION ON FOREIGN OWNERSHIP OF INDONESIAN COAL MINING (CASE STUDY THE CHURCHILL MINING IN EAST KUTAI KALIMANTAN)

Abstract

The question addressed in the thesis seek to elucidate how the case of Foreign Shares Ownership conducted by Churchill Mining on the acquisition of several domestic coal mining companies. Under the Investor Agreement 2007 between Churchill and Ridlatama Group, Churchill have the rights and interests over Ridlatama Group Companies—a group of PMDN (Penanaman Modal Dalam Negri). Churchill is allowed to own and control 75% (seventy five percent) shares in Ridlatama Group. Churchill became the main KP Holders of several Ridlatama Group Coal Mining Companies on East Kutai, East Kalimantan. The author uses Normative legal studies Research method. This thesis also use upon the Statute Approach on Foreign Investment Law of 1967 and its amandment, the Investment Law 2007 and the Company Law 2007. The author proposed to answer the questions by placing her attention on the Conformity of Foreign Investment Laws to the case of Churchill mining. Foreign Shares Ownership conducted by Churchill Mining is not in accordance with the provisions of Foreign Investment Law of 1967 which is must based on Agreements with the Government of Indonesia. The Investor Agreement 2007 which created by Churchill and Ridlatama was also contrary to the Investment Law 2007 and Company Law 2007. Therefore, the author stated that every foreign company has to follow the applicable investment regulation in Indonesia. Government of Indonesia has set the regulation to protects the investment climate which needed clear rules ranging from licensing for businesses up to the costs for the operation of the company. The Author also see the lack of readiness of the Foreign Investment Supervision on relevant authorities by BKPM to any agreements made by the Foreign and Domestic Investors.