Constitutional Court Decision 160/PUU-XXIII/2025 is a 2026 ruling of the Constitutional Court of Indonesia on the provisions of Undang-Undang 2/2025, the fourth amendment of the Mineral and Coal Mining Law, that allow mining business permit areas (wilayah izin usaha pertambangan, WIUP) and special permits (IUPK) to be awarded "by way of priority" as an alternative to auction.^[1] The petition was brought by five individual citizens, among them business operators, a university lecturer and students.^[2] It is one of the constitutional review cases in the field of mining and energy regulation pronounced by the Court on 16 July 2026.^[3]

The Court held that auction and priority award are contradictory methods and that the statute set no clear parameters for a priority award, leaving a wide and subjective discretion.^[4] It granted the petition in part, declaring the priority phrases in Pasal 51, 51A, 60, 60A, 75 and 75A conditionally unconstitutional unless read to mean a priority award that may be given only with clear parameters, through an objective, transparent and accountable assessment, and not as a direct appointment.^[3:1] It rejected the challenge to the participation of private companies in priority areas awarded for the benefit of universities.^[5]

¶ Background

Pasal 51 of Undang-Undang 4/2009 originally provided that metallic mineral permit areas were to be awarded to business entities, cooperatives and individuals by auction. Undang-Undang 3/2020 kept auction as the only method, listing the criteria for it, and added to the central government's powers the offer of special permit areas "on a priority basis" in Pasal 6(1)(j).^[6] In decision 77/PUU-XXII/2024, pronounced on 3 January 2025, the Court upheld that phrase, reading it as a mechanism for directing management to parties that meet administrative, technical, environmental and financial requirements.^[6:1]

Undang-Undang 2/2025, signed and promulgated on 19 March 2025, rewrote Pasal 51(1) and 60(1) so that metallic mineral and coal permit areas are awarded to business entities, cooperatives, individual enterprises, small and medium enterprises or enterprises owned by religious mass organisations "by auction or by way of priority".^[7][8] Under Pasal 51(3) and 60(3) a priority award takes into account the size of the area, the empowerment of cooperatives and small and medium enterprises, the economic function of religious organisations and regional economic growth, and under ayat (4) it is processed through the central government's integrated electronic business licensing system. Pasal 75(3) gives state-owned and region-owned enterprises, cooperatives, small and medium enterprises and religious-organisation enterprises priority for special permits. Pasal 51A, 60A and 75A allow priority areas to be awarded, for the benefit of universities, to state-owned, region-owned or private companies, which must share part of their profit with a university.^[2:1]

¶ Petition

The petition, dated and received on 8 September 2025, was registered on 10 September 2025 and revised in a filing received on 6 October 2025.^[9] It argued that auction and priority award were contradictory, since auction is open and competitive while priority is a subjective government choice that confers privilege, and asked that the priority provisions be read as an auction with a priority offer to the favoured groups.^[10] It further argued that allowing private companies to obtain priority areas for the benefit of universities made universities an instrument of legitimacy for profit-seeking mining, contrary to Pasal 28H(2), 31(5) and 33(3) of the 1945 Constitution, and asked that the words "private business entity" be struck out.^[10:1] The Court heard the House of Representatives and the President, experts called by both sides, and a witness called by the President.^[11]

¶ Ruling

The Court began from Pasal 33(3) of the 1945 Constitution. Restating its line of decisions from 001-021-022/PUU-I/2003 to 77/PUU-XXII/2024, it read state control as a mandate to the state for policy, administration, regulation, management and supervision, and held that the "greatest prosperity of the people" is a multidimensional test: growth that does not lower the quality of life, no loss of environmental quality or carrying capacity for local communities, benefits shared across the population, and regard for future generations.^[12][13]

On the priority mechanism the Court found that, beyond routing applications through the electronic licensing system, the statute set no criteria or measure for deciding who receives a priority award, leaving a broad and subjective discretion. It held that auction and priority award negate each other when applied to the same area and the same class of applicants, since those given the priority route avoid the heavier competition that others must face.^[6:2][4:1] Because mining is capital-intensive and market competition alone would exclude local communities, the Court accepted that an affirmative policy is permissible, but held that a priority award may be made only with clear parameters through an objective, transparent and accountable assessment, so that it is not a direct appointment. It added that priority permits should be evaluated periodically and reviewed or revoked where they cause loss or environmental damage.^[14] Recalling decision 77/PUU-XXII/2024 on supervision, it described the permit as a preventive legal instrument, to be granted selectively with measurable parameters, limited in time, supervised intensively and revoked on breach.^[15]

The Court extended the same reading to the priority phrases in Pasal 51(3) to (6), 60(3) to (6), and 75(3), (5) and (7), and stated that any other priority phrase in the statute relating to IUP, IUPK, WIUP or WIUPK was to follow the decision.^[16][17][18] It rejected the challenge to the words "private business entity" in Pasal 51A, 60A and 75A: the Constitution does not forbid a university from obtaining financial resources from business, and the Higher Education Law contemplates support from industry, but any involvement must serve the university's teaching, research and community-service mission and must not make it a manager of mining business.^[5:1]

The operative order granted the petition in part and declared the phrases "by way of priority award", "by way of priority" and "obtains priority" in Pasal 51(1) and (3) to (6), 60(1) and (3) to (6), 75(3), (5) and (7), and the phrase "priority way" in Pasal 51A(1), (3) and (5), 60A(1), (3) and (5) and 75A(2), (3) and (5), conditionally unconstitutional and without binding force unless read in the terms set out above. It ordered publication in the Berita Negara and rejected the remainder of the petition.^[3:2] The decision was reached in deliberation on 1 July 2026 and pronounced on 16 July 2026, with Suhartoyo presiding; no separate opinion is recorded.^[3:3]

¶ Relationship to other decisions

In decision 184/PUU-XXIII/2025, pronounced the same afternoon, the Court cited this decision on the public-law character of state control when it upheld the licensing regime of Pasal 35(1) of the mining statute.^[19] The elucidation of Pasal 51(4) links the electronic licensing system for priority awards to business licensing under Undang-Undang 6/2023 on job creation.^[6:3]

CRPG's regulatory tracker published an account of the decision on 17 August 2026. Its summary of the ruling covered the phrases in Pasal 51, 60 and 75 but not those in Pasal 51A, 60A and 75A, which the operative order also reaches.^[20][3:4]

¶ External links

• Decision (Mahkamah Konstitusi)
• Case record (Mahkamah Konstitusi)
• CRPG: Constitutional Review of Priority Mining Permit Awards: MK 160/PUU-XXIII/2025 (crpg.id, 17 August 2026)

¶ References