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Geothermal projects in Indonesia

Wednesday, January 3, 2007

Update on renewable energy investment in Indonesia. There is an interesting article in the Jakarta Post on Geothermal investment. Indonesia has developed only less than a thousand MW of geothermal power although it is estimated to have nearly one-third of the world's geothermal resources. A research (in Bahasa) from the ministry of mineral resources mentioned that there are 252 geothermal locations which have been identified along a volcanic belt extending from Sumatera, Java, Nusa Tenggara, Sulawesi until Maluku. These heat resources has the total potential of 27 GWe, which puts Indonesia as the biggest geothermal potential country in the world!

The Jakarta Post op ed told that (i) tax uncertainties and (ii) legal uncertainties are among the frontlines of investment barriers. Geothermal investment is really a high risk-high return investment scheme which involves huge exploration and exploitation funds. It is never intended as a short term investment. Investors are afraid that their contracts are not being honoured.

I'll give a little comment on the legal barriers. Generally contract observance remained high. Business partners will think twice before deciding to bailout from a contract since litigation costs are too high. The problem stems not from observance of the contract but mainly due to regional autonomy. How much share will the regions receive are the hot issue. There has been a case where Garut regional government requests Chevron and the Central Government to disburse concession money for their region. They even threatened to invalidate Article 41 of the Geothermal Law to the Constitutional Court. Article 41 governs a transitory provision which stipulates that all contracts prior to the entry into force of the Geothermal Law will remain valid. Under this transitory provision, regions don't receive any money. Of course, their attempts to invalidate the article are futile.

It must also be noted that the 2003 Geothermal Law gave many power to regions in particular with respect to licensing. This is a good opportunity for investors as they can now deal directly with the regions. During the old days, people will have to deal with state owned enterprise such as PLN or Pertamina. However, it is necessary to make sure that both central and regional government approves or condone the projects. It wouldn't be good if after a few years of investing the license given by regional government is revoked by the central, or a license given by central government is revoked by the central. In any event, although the regions are granted more power, it is always important to asks some sort of condonation from the central government.

Click here to read the Jakarta Post article and here to get some general views on geothermal potentials in Indonesia.

 

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Regulating nanotech in food packaging

Nanologue has completed its interview research conducted at the sponsorship of the EU. This post will highlight the part of the research discussing regulaiton of nanotech in food packaging.

According to the research, nanotech in food packaging will bring benefits in the form of (i) Reduced usage of energy and raw materials (polymers) (ii) improvement of the mechanical properties of biodegradable polymers (iii) beneficial for reusable packaging due to improved mechanical strength and (iv) help to reduce the amount of packaging waste and save resources at the same time. There are however, risks associated with this. The first type of the risk deals with inconclusive research on impacts and lack of effects data: (i) Knoweldge about the effects of engineered nano-materials in the environment is still insufficient (ii) Risk of environmental pollution by nanoparticles (persistence and unknown catalytic effects) whereas the rests of the risks are common risks also found in normal chemicals which relates to pollution and waste: (a) Release of nano particles into the environment during the production and disposal phases of a product, (b) Uncontrolled incineration of nanocomposites could cause emissions of nanoparticles into environment and (c) Nanocomposite materials could disturb plastic recycling processes. Recyclers will have to deal with nanoparticular fillers, which eventually will be found in recycled materials.

Now, let's compare this with FDA's institutional capacity as has been discussed in my previous post. Taylor divided supervision mechanisms (on food packaging and other products) into pre marketing and post marketing.

Pre marketing. He reported that FDA's authority to inspect product on the pipeline is 'weak'. However, it has the strong capacity to (i) enforce safety and testing requirements, (ii) place burden to prove safety to sponsor and (ii) review safety prior to marketing. Post marketing. FDA has only moderate capacity to inspect facilities and safety records and it has 'no' capacity to requiry timely adverse event reporting or in requiring producers to conduct post market monitoring and testing. It has however, strong authority to remove unsafe products from the market -- of course!

The Nanologue's concerns with regards to "food packaging" is more toward its environmental risks (I suppose it means the use of nano-bags in replace of paper bags) while Taylor's report concerns more to its health impact. I think the nanologue should have also highlighted more on the implications of nano-food packaging to human, although food packaging undeniably have important side-effect towards the environment. When it comes to Taylor's proposal, then the recommendation is relatively simple: move the gradation of FDA's authority from 'none' or 'moderate' to 'strong'. This can provide a good balancing when a weaker precautionary approach is selected.

In my next post, I will try to highlight the regulation of nano-food packaging in the European Union. Meanwhile, you can read Nanologue's report here.

 

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Constitutional Court's decision on Corruption gets mixed response

Tuesday, January 2, 2007

Constitutional Court invalidated article 53 of the Law on the Commission on the Eradication of Corruption. Article 53 regulates the establishment and jurisdiction of a Corruption Court. The Constitutional Court said that the Corruption Court is unconstitutional as it violates the legal certainty and equality before the law principle.

Law experts have different views:

State Secretary Yusril Ihza Mahendra said the Constitutional Court's ruling posed a serious judicial problem, as those tried and convicted by the Corruption Court would have grounds for complaint if the court turned out to be unconstitutional. "Article 53 of the law on the KPK is clearly against the Constitution, but its existence has been extended for three years. This will be a problem for those who feel their rights have been violated," he said.

Anti-graft activists on Thursday blasted the Constitutional Court's verdict, calling it a "symbolic victory" for those involved in corruption. "The ruling is nonsense. The Corruption Court does not violate the Constitution. Its existence under the law on the KPK does not have any effect on its independence or impartiality," Bambang Widjojanto, who chairs the ethics department at Indonesian Corruption Watch, said at a news conference.

I also have my own view on the matter, which tends to be in the same position with anti graft activists. I have wrapped an article for the Jakarta Post discussing it. We will discuss it in this blog after it is published.

 

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Summaries of nano policies research

David Berube posted a summary of various nanotechnology's (ethical, legal, societal, health, environmental implications) policies researches in his blog. This is a good post for you who wants to know the latest nanotech policies findings while on the go. Check it here.

 

New Year's predictions

There seems to be nothing new:
#8: Weapons of mass destruction will be even easier to obtain over the next 15 years. Terrorists may move from bombs to creating havoc on the cellular level. The weapons of the future—genetic engineering and nanotechnology—require neither large facilities nor mass materials.

#9: The convergence of genetic engineering, nanotechnology and robotics will allow humans to change their bodies in profoundly new ways. In the next 15 years, people may be able to rearrange their genes to change their physical features, extend their lifespan, merge their brains with computers and their bodies with robots, among many other remarkable developments.
I was expecting someone to make a regulatory prediction for nanotechnology. Oh well, maybe I should do it myself. Will keep you posted!

 

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Nanosensors and privacy question

Another example why privacy would be futile to be preserved:

Co-Leader of QUT's Applied Optics Program Dr Dmitri Gramotnev said his research had discovered special metallic structures called plasmonic waveguides that could focus light into nanoscale regions, unachievable in conventional optics. These structures may allow detection and identification of extremely small amounts of substances, even separate molecules in the air. "This type of system could revolutionise airport security, air quality monitoring and forensic investigation," he said.

Welcome to to the naked society! Privacy would be expensive, only the rich may enjoy.

 

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Competition law, appeal procedure

Monday, January 1, 2007

Procedure for filing an appeal on the Business Competition Supervisory Commission's (KPPU) Decision is regulated by a Supreme Court Regulation no. 1 year 2003, available here.