Indonesia’s Transformation to Gross Split Contract: an Evaluation of Energy Worker Regulation

DOI

10.2991/iceml-18.2018.59How to use a DOI?

Keywords

gross split, workers, oil and gas

Abstract

This paper aims to analyze the evaluation of the energy worker regulation that has been transformed to gross split contract. As the Government of Indonesia changed the PSC scheme with cost recovery to the scheme of gross split revenue contract through the Regulation of Minister of Energy and Mineral Resources No. 52 Year 2017 on Amendment to Regulation of the Minister of Energy and Mineral Resources No. 8 Year 2017 on the Gross Split Revenue Contract, the production sharing is set for the base split, which can then be adjusted to the revenue-generating components. This is unlike the conventional profit-sharing contracts, where the share of production between the Government and contractor is fixed. While the new system is expected to reduce the replacement cost incurred by the government when using the PSC scheme, it arises several issues. The oil and gas operator is given freedom to operate without government interference. When the oil and gas work contract expired, one of the things that comes to mind is whether the old worker will be re-employed by a new operator or not. With article 33 of the 1945 Constitution of the Republic of Indonesia as the basis for implementation in the economic sector, including oil and gas, we can see the contradiction between cost efficiency and social protection for all citizens. The results show that there are no regulations that specifically regulate the status of oil and gas workers at the time of contract expiration. Therefore, the need for protection is indispensable. Several steps may be taken, including the adoption of provisions in the Transfer of Undertakings (Protection of Employment) Regulations Year 2006 into the law of labor-related legislation in Indonesia as well as by streamlining the Regulation of Minister of Energy and Mineral Resources No. 15 Year 2015 on Management of Oil and Gas Working Areas Whose Contract of Cooperation is Expired.

Copyright

© 2018, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Ranitya Ganindha
AU  - Setiawan Wicaksono
AU  - A.A.A. Nanda Saraswati
PY  - 2018/09
DA  - 2018/09
TI  - Indonesia’s Transformation to Gross Split Contract: an Evaluation of Energy Worker Regulation
BT  - Proceedings of the 2018 International Conference on Energy and Mining Law (ICEML 2018)
PB  - Atlantis Press
SP  - 272
EP  - 275
SN  - 2352-5428
UR  - https://doi.org/10.2991/iceml-18.2018.59
DO  - 10.2991/iceml-18.2018.59
ID  - Ganindha2018/09
ER  -