The discussion of the Draft Law on Island Regions (RUU Daerah Kepulauan) is considered to need to provide legal certainty for long-term investment, including in the mining sector. Regulatory certainty is considered essential so that natural resource development in island regions can proceed in line with regional development interests and the welfare of local communities.
Ferdy Hasiman, Executive Director of the Indonesia Mining & Energy Watch, said legal certainty is one of the main factors determining investment interest, particularly for industries that require substantial capital and have long investment payback periods.
“If you want to invest for the long term, there has to be certainty. Certainty in everything. If there is no certainty, why would anyone want to come?” Ferdy said in a statement, as quoted on Monday, September 7, 2026.
The RUU Daerah Kepulauan is currently being discussed by the Indonesian House of Representatives (DPR) to establish a legal framework suited to the characteristics of island regions. This includes arrangements concerning central and regional government authorities, the management of marine and coastal areas, and fiscal support through a Special Fund for Island Regions. The discussions are being conducted by a special committee (Pansus) of the DPR together with the government and relevant stakeholders, with completion targeted for 2026.
He said regulatory changes that too easily follow shifts in political regimes could create uncertainty for the business community. Such conditions could ultimately cause investors to reconsider their investment plans.
“Foreign investment in our country is low because we currently don’t have legal certainty. Regulations can simply be changed at the government’s or the regime’s discretion. When the regime changes, the laws will change. That’s why people are reluctant to come,” he said.
Ferdy said the issue of legal certainty becomes even more important when the RUU Daerah Kepulauan intersects with sector-specific regulations, including rules governing mineral and coal mining, as well as oil and gas.
He urged that the RUU Daerah Kepulauan ultimately be harmonized with various sectoral regulations so that it does not create overlapping authorities or new rules that could disrupt existing business activities.
“The Island Regions Law must be harmonized. In the mineral and coal mining sector, it needs to be synchronized with the Ministry of Energy and Mineral Resources [ESDM]; the oil sector needs to be synchronized with this, with that—minerals, mineral and coal mining,” he said.
Don’t Create New Uncertainty
Ferdy also warned that the creation of a new law should not instead create new problems for investments that already have existing permits or contracts as their legal basis.
He gave the example of the possibility of new regulations restricting the mining industry’s ability to operate after companies had already made substantial investments.
“For example, someone has already obtained a Mining Business License (IUP) and a Contract of Work. They’ve already spent a lot of money, and then a new law is made,” he said.
Therefore, according to Ferdy, lawmakers need to go directly to the regions and examine conditions on the ground before establishing provisions related to the management of island regions.
“Don’t create a new law that creates new problems. Make sure the definitions in the regulations are clear,” he said.
He stressed that lawmakers must visit island regions directly to identify the problems they face and should not limit their visits to cities.
“Go directly to the regions. Let’s see the situation firsthand. That way, the problems can be clearly identified, and the definitions in the law can also be made clear,” he concluded.
