ASEAN KEY DESTINATIONS
US financial reforms affect Indonesia
The Dodd-Frank Wall Street Reform and Consumer Protection Act in the US will affect the transparency in business dealings of foreign oil, gas and mining companies operating in Indonesia.
"The law will require oil, gas and mining companies overseen by the US Securities and Exchange Commission *SEC* to publish their income , tax payment and royalties to the host countries and the government of the US," Ridaya Laodengkowe, the national coordinator of Publish What You Pay Indonesia, said at a press conference in Jakarta.
The companies under the jurisdiction of the SEC will also have to disclose their flow of earnings, such as tax payments, bonuses, royalties and retribution fees to local administrators.
Given the fact that about 60 percent of the national oil production is contributed by companies listed on the US stock exchanges, the implementation of the Dodd-Frank Wall Street Reform and Consumer Protection Act will undoubtedly affect the business transparency in Indonesia, he said.
"Major oil and gas companies operating in Indonesia such as Chevron Texaco, Total, Conoco Philips, Talisman, ExxonMobil, Royal Dutch Shell and British Petroleum will be affected by the law," he added.
Apart from oil ad gas firms, mining companies, such as Freeport, Newmont, BHP Billiton and Rio Tinto would also have to abide the law.
"Non-compliance could result in being delisted or suspended by the SEC," he added.
Transparency Indonesia deputy secretary-general Rezki Sri Wibowo said the Wall Street Reform Act was in line with the principle of the Extractive Industry Transparency Initiative (EITI), a global initiative requiring extractive industries to report their income to the public and the government.
"Indonesia has started to adopt the EITI by issuing in April a Presidential decree on the transparency of national and regional income of extractive industries," he said.
He added that the implementation of EITI through Presidential Regulation and the passage of the Wall Street Reform Act would serve as tools to push the oil, gas and mining industry operating in Indonesia to be more transparent.
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