The document describes a local transparency mechanism for the oil and gas industry in Blora District, Indonesia. It was established to address issues like a lack of revenue and CSR data sharing, and environmental impact information. The mechanism's objectives are to transparently share information on revenues, CSR programs, and environmental impacts. It consists of a multi-stakeholder team that collects, analyzes and publishes data quarterly. In its first years of operation, the team advocated for increased revenue sharing, participated in legal reviews, and mediated citizen issues. While building trust between groups, challenges remain in formalizing company involvement and improving revenue and impact policies.

1. LOCAL INNOVATION :
OIL/GAS TRANSPARENCY MECHANISM
BLORA DISTRICT

2. LOCAL INNOVATION :
OIL/GAS TRANSPARENCY
MECHANISM
BLORA DISTRICT
Jakarta, May 23rd 2012

3. Basic Problem
 Revenue Sharing Mechanism:
 A mere socialization
 Local Govt. do not have the necessary data for calculating
revenue
 Production data (update real time production)
 cost recovery per oil/gas block
 Oil/gas deposits/reserve
Field development data (Example: PoD and WP&B)
 Corporate Social Responsibility
 Lack of coordination in CSR-CD implementation (local govt.
only receive reports after the implementation is done)
 Environmental Impact
 Lack of socialization & simulation over environmental impact
treatment

4. Objectives of Transparency Mechanism
 To make transparent of information on
revenue, CSR-Comdev and information on
mitigation and environmental impact of oil/gas
mining
 To build dialog and constructive multi-
stakeholders mediation
 Provide input on data and information for
local development planning and budgeting

5. Stages of Process
 Study
 Study on local problems related to revenue, CSR and environment
 Study on rules and regulations
 Research on oil/gas revenue flow and transparency aliran penerimaan dan
transparansi Migas
 Model Development
 Multi-stakeholders discussion: formulating model/transparency mechanism
 Agreed upon formulated model
 Legal Drafting in local level
 Advocacy and campaign
 Local regulations advocacy
 Seminar, workshop, media campaign, and sharing lesson learn
 Implementation and Institusionalization
 Formation of Transparency Team (Regulation from Head of Municipal/Bupati)
 Budget advocacy for Transparency Team
 Working meeting of Transparency Team
 Socialization and Publication
 Facilitating over local issues (PPGJ, Old Well, CSR, etc)
 Advocacy to Central Government

6. Transparency Mechanism
Model
 Implementing Institution
 Oil/Gas Transparency Team- Multi-stakeholders (Local Govt,
Company, Civil Society)
 Legal Based
 Head of Municipal Regulation (Peraturan Bupati) No. 65/2010
 Type of information to be made transparent :
 Revenue Information
 Social/Environment Information
 CSR Information
 Funding
 Local Bugdet (APBD) and other legal funding
 Working mechanism: Sosialization and Information publication; Multi-
stakeholders Dialog; Policy Advocacy to central govt.; conduct studies
/or forming working group

7. Membership and Funding
 Member of Oil/Gas Transparency Team in Blora
district consist of 20 person from various stakeholders
 Selected stakeholder mostly invovled in the process
since the very beginning
 Involved Stakeholder:
 Executive (Assistant II, Local Development Planning
Body/Bappeda, Environment Office/Dinas LH, Energy and
Resource Office/Dinas ESDM, Law Section, Economy
Section)
 Legislative (Commission B DPRD)
 NGO
 Media
 Mining Society Group
 Association of Mining Workers
 Local Companies

8. Team Main Duty
(As mandated in Bupati regulation)
Article 5: Duties and Function
I. Formulate working agenda and implement
extractive industry transparency mechanism
II. Conduct strategic studies and formulate
policy recommendation to related
stakeholders
III. Conduct assessment, socialization and
publication to the society, working result , and
data of extractive industry

9. Work Plan
 Work Meeting conduct every once a year to formulate Work
Plan for the next one year
 Sample of work plan from Transparency Team in Blora
(2012):
1. Build Revenue Working Group and CSR-Environment
working group--> to focus team’s work
2. Revenue Working Group: to continue Blora’s revenue
sharing/DBH advocacy (Blora do not receive DBH from
Cepu block since DBH sharing based on the location of the
mouth the well located in Bojonegoro
CSR & Environment working group: to support trasnparency
and the improvement of environment management and
CSR by companies
1. To agreed upon tranparency mechanism that has not been
regulate yet under the Bupati regulation

10. Transparency’s Working
Mechanism
 Transparency Mechanism:
 Data collection:
 Every related institution and companies provide data to
transparency team every quarter
 Create medium for socialization: leaflet and media
release
 To be published per quarter
 Content of publication materials: Activity report and
Tranparency Team Achievements, Data Lifting,
Realization of oil/gas revenue sharing/DBH,
Realization of PI revenue sharing, oil/gas tax, Data on
old well management, Data on CSR by oil/gas
companies

11. Transparancy Mechanism
Companies Related Local
Govt. Unit Central Govt.
-Collecting Data Transparen
-Analyzing Data cy Team
-Formulating
information
Public/Society

12. Achievements of Transparency Team|2011-
2012
 2012:
 Publication of Information: Data on DBH, Old
Well, team’s working result, budgeting, in the
form of leaflet and media release
 Workforce mediation:
 Mediation between citizens, companies and local
govt. due to citizens complaint over Pertamina project
PPGJ in Sumber village, Kradenan
 Advocacy
on Cepu block oil/gas DBH to central
government (wich was still consider unfair by
Blora)

13. Achievements of Transparency Team|2011-
2012
1. Policy advocacy for oil/gas DBH in Cepu Block
 Considering option to initiate Letter of Joint
Agreement/SKB from 3 ministries to give DBH to
Blora; has been discussed with the three
ministries (ESDM, Keuangan dan Dalam Negeri)
2. Actively involved in Judicial Review of UU 33 2004
about Financial Balance (becomes expert witness)
3. Mediator between citizen and companies
 Facilitating agreement to resolve problem as
stated in Berita Acara/BA. BA will serve as
reference document for parties during the

14. Lesson Learn
 Building trust
 Trust between stakeholders – main key
 Need approaches and process in order for society, companies, and
local government to sit together and to agreed upon a joint initiative.
 Transparency and ‘beyond transparency’
 Transparancy trigger the improvement of performance of the mining
companies—certain intervention from the local govt. and the society
with specific institution and organized work
 Transparency itself isn’t enough, start to conduct mediation
 Innovation and Institutionalization
 Building model phase- the role of champion (from each parties) is
vital
 Next important stage– institutionalization within the system
(perbub/Bupati regulation, detail implementation rules, local budget
for funding, mechanism for monitoring performance, etc)

15. Challenges
 Time needed to encourage the government to be transparent in revenue
sharing/DBH
 In the reconcilitaion of DBH today, there is aggregate information on cost recovery
 The involvement of contractor (KKKS) in the Transparency Team is not formal
yet
 Internal bureaucracy issues and interpretation of law product
 KKKS was an active obervant
 Change of actors- the position within companies and government often change,
resulting in certain process during the changing of team member
 Policy improvement needed:
 Encouraging transparency mechanism to have stronger legal based (perda)
 Encouraging the revision of oil/gas regulation so the local govt. can have maximum involvement in
managing oil/gas
 The need to replicate the mechanism to other resource-rich region

16. Terima Kasih
Thank You