At the end of the year, the mining community received a “gift” that adds to its concerns. It comes in the form of Minister of Energy and Mineral Resources Decree Number 391.K/MB.01/MEM.B/2025 regarding administrative fine tariffs for violations of mining business activities in forest areas, which have been significantly increased to ensure the sustainability of mining operations in Indonesia.

In the Decree, which was stipulated and came into force on 1 December 2025, fines are regulated for violations involving nickel, bauxite, tin, and coal commodities. The maximum amount reaches Rp 6.5 billion per hectare for nickel and the lowest is Rp 354 million for coal. These fines are considered extremely high when compared with the single-rate fine for oil palm plantations of Rp 25 million per hectare, as stipulated in Government Regulation Number 45 of 2025.

In the Government Regulation (PP) governing procedures for the imposition of administrative sanctions and fines in the forestry sector, it is stated that fine tariffs for non-oil palm plantations are determined by the Minister of Finance, while tariffs for other activities are set by the Minister according to their authority. The fine threat takes into account the area of violation, the duration of the violation, and the applicable fine tariff as determined.

The government views these fine tariff provisions as important to address violations of mining business activities in forest areas. As reported by Antara (21/12/2025), the Task Force for the Enforcement of Forest Areas (Satgas PKH) stated that the total administrative fines that have been calculated as potential non-tax state revenue (PNBP) amount to Rp 29.2 trillion from 22 mining companies operating without permits in forest areas. The Task Force has summoned and verified 120 mining companies spread across 12 provinces. The PKH Task Force itself was established by the government to restore state control over forest areas that are illegally occupied.

The issue of imposing forestry fines seems to have found its momentum when northern Sumatra was hit by floods and landslides, which according to the National Disaster Management Agency (BNPB), as of 20 December 2025, resulted in 1,090 fatalities and more than 500,000 displaced people. The destruction of forest areas—among others due to the oil palm and mining industries—has been blamed as one of the triggers.

The Kompas Team (12/12/2025) revealed that forest loss in Aceh, North Sumatra, and West Sumatra during 1990–2024 averaged 36,305 hectares per year. In 1990, there were still 9.49 million hectares of forest, which then shrank to 8.26 million hectares by 2024. Forest shrinkage from 1990–2024 occurred due to conversion into 690,777 hectares of oil palm plantations, 2,160 hectares of mining areas, 9,666 hectares of urban areas, and 69,733 hectares of industrial plantation forests (HTI).

No one disputes that the environment is an important issue—indeed, extremely important—because a damaged environment cannot easily or instantly be restored to its original condition. The ecological crisis that threatens human life ultimately demands changes in lifestyles and policies, including sustainable mining practices.

On the other hand, it cannot be denied that mining products remain significant for the advancement of civilization and that the mining sector continues to be an important contributor to the national economy. Non-tax state revenue (PNBP) from the mineral and coal subsector reached Rp 140.486 trillion in 2024. Tax revenue from the mining sector as of October 2025 reached Rp 205.7 trillion. Data from the first semester of 2025 show that realized investment in the mineral and coal sector amounted to USD 3.1 million, increasing from USD 2.4 million in the same period the previous year.

The fundamental substance of MEMR Decree Number 391/2025 is the government’s view of the need to clearly and firmly establish fine tariffs for violations of mining business activities in forest areas. The objective of enforcing regulations and ensuring legal certainty goes hand in hand with efforts to optimize state revenue. However, like other public policies, the Decree carries consequences that must be considered by all parties.

First, the issuance of MEMR Decree Number 391/2025 ultimately requires every mining business actor to very (!) seriously review the forest area utilization permits they hold, along with all the obligations attached to them. Operational areas and the boundaries of borrowed-use forest areas must be considered to ensure that they do not impose excessive burdens, including financial consequences. Referring to Minister of Environment and Forestry Regulation Number 7 of 2021, holders of Forest Area Borrow-and-Use Permits (PPKH) must fulfill 17 obligations, including non-tax state revenue for forest area utilization, watershed (DAS) rehabilitation, reclamation and revegetation, as well as fire prevention and forest area protection.

It cannot be denied that there are companies that deliberately use forest areas irresponsibly. The levels range from permit holders who neglect their obligations, operate beyond the permitted areas, or even operate in forest areas without having obtained permits. For cases of violations that are indeed intentional, it is appropriate that the government take firm action at the earliest opportunity.

Another matter that needs clarification is the boundary in cases where violations related to forest areas are committed by parties other than the company as the PPKH holder. If violations are carried out illegally or without permits by other parties, and the company has reported them to law enforcement, it would obviously be unfair if all responsibility were imposed on the PPKH-holding company.

The Job Creation Law also regulates the issue of “existing encroachments,” namely conditions where business permits already existed within forest areas prior to the issuance of new regulations. This provision provides an opportunity for business owners to apply for legalization by fulfilling administrative requirements within a three-year period. The government needs to give special attention to companies that have good faith in pursuing licensing in accordance with this principle of existing encroachments, including mining business actors.

The expectation for the government is the importance of providing adequate explanations regarding the magnitude of fine tariffs for the mining sector. One example is the comparison with the single-rate fine for oil palm plantations of only Rp 25 million per hectare as stipulated in Government Regulation Number 45 of 2025. Such very large fine threats risk having a direct impact on companies’ operational activities.

Provisions that are based solely on the business sector and type of mining commodity also raise questions. What is the underlying rationale for fines being determined by sector and commodity type, rather than by the level of damage or environmental impact resulting from violations in the forest areas concerned? Fine threats with large disparities and unclear rules should not open loopholes for “compromises” that could be exploited by authorities lacking integrity.

Ultimately, the government’s door, as the steward of the state, must continue to be knocked on to affirm its function as a “mentor” in sustaining sound national governance, including in the management of natural resources. The PKH Task Force and the high fine threats would not need to exist if guidance for business actors were carried out properly, including regular monitoring and evaluation. Policy must not mimic punishment alone. Policy must not merely generate fear from the permitting regime and fine issuers.

Written by Dr. Sidik Pramono, S.T., M.A.,
Lecturer in Public Administration, Faculty of Administrative Sciences, Indonesia