Indonesia govt to draft rules to fill void in water management

The Public Works and Public Housing Ministry will issue follow-up rules on a landmark Constitutional Court ruling banning a private monopoly on the nation's water resources that has sparked uncertainty among water-based businesses on the management of the resources.

The ministry expects to issue a fatwa next week that would ensure the continuity of any existing business agreements and permit use for those established before the court ruling, under the condition that they adhere to six guiding principles laid out by the court, Public Works and Public Housing Minister Basuki Hadimuljono said.

It also aims to finish a government regulation in April and a draft replacement law before the end of this year to provide regulatory certainty as a consequence of a change in the legality of water-resources management and businesses.

Several other ministerial regulations are also in the pipeline to govern more specific issues like water-source mapping, organizational bodies and dams, according to Basuki.

Last week, the court revoked the 2004 Water Resources Law, effectively paving the way for the state to take full control of water resources from the private sector and for concessions of water resources by companies that sell water-related products. The verdict also reinstated the previous 1974 Water Law until a new one is deliberated.

Basuki said his office would take on a number of "urgent" tasks of drafting several government regulations (PP) that expand on the 1974 law, not forgetting to invite all stakeholders in the drafting process.

"Together we'll draft a government regulation that will address matters of [resource] coordination and counsel, enterprise, protection and funding - all of which are broadly regulated in the 1974 law," he told reporters.

"We expect to have the draft up for discussion by the end of March, so that it'll be ready in April," Basuki added.

Unlike the complicated structure of the 2004 law, with its hundreds of articles, the 1974 Water Law allows the state to expand the rules simply by issuing more specific government regulations.

The court's ruling came as the result of a judicial review filed by several parties which were convinced that the government should regain full control over water resources from the private sector, especially from the packaged drinking water industry.

Indonesia's packaged drinking water industry, comprising 600 national businesses, is projected to produce 23.9 billion liters of packaged water this year, according to recent Association of Indonesian Producers of Packaged Drinking Water (Aspadin) data. Almost 80 per cent of it will be consumed in Java and Bali alone.

Basuki said that it was the perfect time to tighten control over the industry through a dedicated government regulation. "We may have to be stricter with the packaged water industry. We'll be looking into collaborating with SOEs [state-owned enterprises], region-owned enterprises and cooperatives in the regions."

Aspadin welcomed the government's move to establish short-term fixes in order to resolve confusion resulting from the 2004 law's annulment.

"It's what we've been waiting for. The fatwa should suffice for the time being," Aspadin chairman Hendro Baruno told The Jakarta Post.

As a next step, Hendro urged the state to have President Joko "Jokowi" Widodo sign off on a new law draft by the end of this year, so that the industry could prepare for an onslaught of incoming water products when the ASEAN Economic Community comes into effect this December.