MESSAGE
FROM THE CHAIRPERSON OF PURNOMO YUSGIANTORO CENTER

The year of 2017 is an exciting year for all of us at the Purnomo Yusgiantoro Center (PYC) as we continue to expand and develop our center along with our three pillars; research and development in the energy sector, health and social service, and the preservation of Indonesian cultural heritage.

We are also very excited with the progress of our building extension which will be finished next month. There will be two new small classrooms and one extended gallery in the new building. Hopefully, this development will provide a more conducive environment for our new exciting programs and will help to accommodate our pillars, especially in the case of research and development in the energy sector.

PYC plans to conduct some new exciting programs, namely Focus Group Discussions (FGDs), starting off in the 1st quarter of 2017. There will be two FGDs with the first one will be held under the theme of “Energy and Environment”, while the second one will focus on the theme of “Women in Energy”. The first theme is particularly relevant with today’s issues as many people across the world are concerned on how the energy system can go along with the environment. Meanwhile, the second theme is quite fitting in relation with challenges as well as opportunities that many women face in the energy industry. We give priority for the millennial generation to participate in our FGDs because we believe their voices could contribute significantly to such a fast-growing energy industry in the country. We will invite prominent speakers for these two FGDs and their names will be published shortly. Results from our FGDs will be documented in a report which will be published in our website. Seats are limited, so register for your spot as soon as possible.

We are also delighted to announce a "Call for Paper" for our first edition of the Indonesian Journal of Energy. We highly encourage students, professors, or professionals to submit their opinions or research papers for this journal. Kindly note that the deadline is on 12th April of 2017 and the publication is expected to be released in July 2017. In between those dates, submitted manuscripts will then go through a peer-review process before the release.

Finally, as the new center, we are very open to any interest for future collaboration and partnerships. We will always welcome your fresh ideas or collaborative events and we look forward to hearing back from you.

 

A New Extension in Our Building!

PYC hosts various facilities, ranging from libraries, galleries, and meeting rooms. Our aspiration is to always improve our work from time to time thus the requirement for additional facilities are necessary. The extension work on our current building will hopefully be the solution for this vision. As the progress nears the end, there will be two new classrooms and an extended gallery in the center.

Energy Forum Discussion
First FGD- May, 6th

Click application form below to register

Application Form

Energy Forum Discussion
Second FGD - May 20th
POLICY REVIEW
The Sanctity of Contract

Once parties sign a contract, they are bound by the obligations stated within the contract. In business, it is called the sanctity of contract. It is the contract that assures each party that the cooperation will continue as agreed, regardless if the circumastances change.

Yet, what is the limit? Is there anything more sacred than the sanctity itself?

This article will try to examine the contract between PT Freeport Indonesia Company and the Government of the Republic of Indonesia as a case study. It refers to the official data provided by US Securities and Exchange Commission. The contract was signed on December 30th 1991, as the fifth edition of Work of Contract between the two parties. This Contract will end in 2021 and it should be carefully evaluated by the Government of the Republic of Indonesia whether or not the contract to be extended thereafter. The first edition of Work of Contract was signed in 1967. It should have ended in 2013, but in 1991, surprisingly both parties renewed and extended the agreement.

In the Preamble, the contract was signed by Minister of Mines and Energy, on behalf of the Government of the Republic of Indonesia and PT Freeport Indonesia Company. PT Freeport Indonesia Company (PT FIC) is a judicial body incorporated within Indonesia by Notarial Deed and Decree from the Minister of Justice. PT FIC is an indirect Subsidiary of Freeport-McMoRan Inc., a Delaware corporation, and a Subsidiary of Freeport-McMoRan Copper & Gold Inc., a Delaware corporation.

As PT FIC is listed as a legitimate Indonesian company, it will comply with all Indonesian Laws and regulations. It is clearly stated within Article 3 that PT FIC shall be incorporated under the laws of the Republic of Indonesia. Moreover, in article 23, it is stated that PT FIC at all time to comply with the laws and regulations of Indonesia from time to time in effect.  This is a strong message that the Law No. 4 year 2009 on Mineral and Coal is in line with  the contract.

In order to enhance investment in the mining sector, the Work of Contract gave several privileges and benefits to taxes and several financial obligations to PT FIC. It is regulated in Article 13 that there are 13 different taxes and financial obligations which bind both parties. Article 13 states the obligation of taxes and royalty fees applicable to PT FIC and specifically states that PT FIC shall not be subject to any other taxes, duties, levies, contributions, charges or fees now or hereafter levied or imposed or approved by the Government other than those expressly provided for in this Article and elsewhere in this Agreement.

In order to enhance investment in the mining sector, the Work of Contract gave several privileges and benefits to taxes and several financial obligations to PT FIC. It is regulated in Article 13 that there are 13 different taxes and financial obligations which bind both parties. Article 13 states the obligation of taxes and royalty fees applicable to PT FIC and specifically states that PT FIC shall not be subject to any other taxes, duties, levies, contributions, charges or fees now or hereafter levied or imposed or approved by the Government other than those expressly provided for in this Article and elsewhere in this Agreement.

In this context, the Contract is sacred indeed. However, the limit is the contract itself which is governed and subject to higher regulations, such as Law and Indonesian Constitution. It is written in the Contract itself that all parties oblige to submit to the prevailing laws and regulations. The other most important aspect is that this contract was made based on goodwill, that both parties wish to fulfill its interest. Accordingly, any new circumstances must be solved by goodwill as well. This was also shown when PT FIC agreed to accept the increase of gold and copper royalty to the Government. 

The Indonesian Journal of Energy
Vol. 1 No. 1 July 2017

The Indonesian Journal of Energy (IJE) is an international multi-disciplinary journal in the field of energy under the auspices of PYC. It aims to be one of the peer-review platforms with the vision of becoming a reliable source of information for analysis, review and evaluation related to energy as a whole.

IJE publication is intended as the program to meet one of PYC’s pillars, to be a center for research and development in the energy sector. Journal will be published in every 6-month period, on January and July each year.

The call for paper is open until April 12, 2017 for the journal’s first publication, expected to be released this July.

You can also visit our journal website for more info

www.ije-pyc.org

ACADEMIC CORNER
Environment in Energy Economics
Energy in the Sustainable Development Context

The following text is closely related to the principle of sustainable development. Sustainable development is defined as the development that meets the needs of the present and able to compromise the ability of future generations to meet their own needs, while at the same time sustaining the ability of natural systems to provide the natural resources and ecosystem services upon which the economy and society depends. It is expected that the upcoming generation will also enjoy the calibre of living as to the one today’s population does. Therefore, the sustainable development can be recognized as a dynamic term instead of a static one.

One of important factors in determining the sustainable development among nations is to compare their level of income per capita or living standard.  Each government will always strive to increase people’s income, but this is not the only plot at play. In sustainable development concept, an effort to enhance the quality of life must not leave environmental abatement behind. With regards to that, there are three principal pillars in achieving the sustainable development: (1) allocation, (2) distribution and (3) scale.

In regards to the allocation principal, environmental issues sometimes arise from misallocation of energy sources by the government. A price subsidy to fossil energy in developing countries increases energy consumption. Fossil energy produces negative emissions such as green house gases. This kind of public policy would create negative impacts on the environment. Besides, this allocation gives more privilege to high income society as they enjoy cheap energy prices.  The optimum efficiency can typically be attained at price that reflects the maximum marginal opportunity cost.

In regards to the distribution principle, inappropriate distributions can also induce environmental problems. A distribution of  income in the surrounding area of energy activities emerges disparities among the society. This gap is between the one that earns high income from the energy companies and the society that only receives social responsibility from the energy activities. As Maslow theorem shows that low income people may not consider negative environmental impacts in their daily life. The life priority for this kind of society do not include environmental concern in their  day to day life.  But high income society may be able to consider environmental concern as their basic needs, which have already been met from time to time.       

In regards to the scale principle, an excessive adjustment scale is another potential factor in the rise of environmental issue. In this regard, the scale is more related to the physical economic dimension. In other words, a total continuing flow of energy sources from upstream to downstream is related to the environmental pollution. In the case of energy, pollutions are severe in the downstream as they produce more negative emissions caused by energy burning. The development of energy sources is not supposed to disturb the environmental carrying capacity. If it does, any sort of disruption would eventually terminate the development of entire energy sources. Identical to the abovementioned on allocation and distribution, the scale can also be divided to the un-sustained and sustained type. The optimum scale can be generally achieved if the increase of marginal benefit can match its associated marginal cost.

Source: Yusgiantoro, P., (2000), Ekonomi Energi: Teori dan Praktik, LP3ES, Jakarta, 367-368. 

OUR PAST EVENT
The Rapid Chess Series 2016 in Conjuction with Trophy of Prof. Ir,. Purnomo Yusgiantoro., MSc., M.A.,PhD

From left to right (Winner : UGM A Team with the trophy 'Prof. Ir. Purnomo Yusgiantoro, MSc., MA., Ph.D' | 2nd place: Gunadarma Team | 3rd place: UGM B Team | 4th place: UPI A Team | 5th place: Universitas Airlangga Team | 6th place: ITB A Team)

PYC supported the national chess championship, hosted by PERCAMA ITB (Persatuan Catur Mahasiswa ITB). The event was held from November 26 – 27, 2016 in Bandung. The 25-minute rapid chess championship for university students was joined by approximately 14 groups of students from various universities; not only from Bandung but also other cities and provinces as well.

In the end, the team from UGM (University of Gadjah Mada) sealed the first spot of the championship. Big congrats to the winner!

We Have Launched Our New Website!

PYC is proud to announce the launch of our new website. This website is one of our commitments for a better communication to wider public regarding the information related to our three pillars.

 There will be access to our publications such as the Indonesian Journal of Energy (IJE). The website will also have a section devoted to opinions and commentaries, which is open for everyone to contribute. If you are interested in publishing your works with us, please let us know and send them to our email.

Visit our new website and go explore!

Our gratitude to:

Mrs. Evita Legowo,

Mr. Simon Sembiring,

Mrs. Edna Caroline,

Mr. Hilman S. Fathoni

We really appreciate for their contributions in our e-newsletter.

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Purnomo Yusgiantoro Center

Copyright ©2017 PYC
Jalan Wijaya IX No. 12, Kebayoran Baru, Jakarta, 12160, Indonesia
Phone: +62 21 720 3917
Fax: +62 21 22 77 5786
Email: pyc@purnomoyusgiantorocenter.org

For more info:

EVENT     : event@purnomoyusgiantorocenter.org

LIBRARY   : library@purnomoyusgiantorocenter.org

 
Website: www.purnomoyusgiantorocenter.org

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