Regulation Watch · Business Licensing · Indonesia. The regulation applies nationally to businesses in oil and gas, electricity, minerals and coal, new and renewable energy, energy conservation and supporting geology activities. It is relevant to Indonesian companies, PT PMA and PT PMDN entities, foreign investors, permanent establishments where permitted, contractors, licence holders and businesses seeking or changing an ESDM-sector PB or PB UMKU through OSS.
ESDM Replaces Risk-Based Licensing Standards
Permen ESDM 7/2026 replaces Indonesia's 2021 risk-based licensing standards for energy and mineral-resources businesses, aligning sector permits and supporting licences with PP 28/2025 and the OSS system.
- Published
- Established in Jakarta on 8 June 2026 and promulgated on 12 June 2026 in State Bulletin 2026 No. 385. It was first recorded by Regulation Watch on 10 October 2026 as a late-discovered instrument.
- Effective
- 12 June 2026, the date of promulgation specified by Article 21.
- Added to Watch
- 10 October 2026
Who is affected
PT PMA and PT PMDN companies, foreign and Indonesian shareholders and directors, oil-and-gas contractors and downstream operators, power generators and electricity-service businesses, mining and mining-service companies, geothermal, biofuel, biogas, waste-energy and energy-conservation businesses, groundwater operators, investors, lenders, engineering contractors, and licensing, land, environment, safety, technical, human-resources and compliance teams.
Practical impact
The regulation is the new sector-standard layer beneath PP 28/2025 for ESDM risk-based licensing. It requires covered businesses to obtain the relevant PB and, where an operating or commercial support approval is needed, PB UMKU through OSS integrated with ministry systems. Two extensive annexes replace the former 2021 standards and specify the scope, permit form, administrative and technical evidence, assessment process, validity, obligations and supervision for each covered activity. Existing valid licences survive only until their stated expiry, while nomenclature must be read consistently with the new rule and later applications, renewals or changes must be prepared against the applicable new standard.
Permen ESDM 7/2026 was established on 8 June 2026, promulgated on 12 June in State Bulletin 2026 No. 385 and took effect on promulgation. It implements the ESDM-sector standard-setting mandate under PP 28/2025 and revokes Permen ESDM 5/2021, the former risk-based licensing standard for this sector.
The framework requires a covered operator to hold the relevant Perizinan Berusaha, or PB, for its core activity. Where an operating or commercial support approval is also required, the operator must obtain the applicable PB UMKU. Both are processed electronically through OSS, which is integrated with ministry and agency systems, after the relevant basic requirements have been fulfilled unless a legal exception applies.
Annex I covers core permits for oil and gas, electricity, minerals and coal, and new or renewable energy and conservation. It includes upstream contracts and carbon-storage activities, downstream transport, processing, trading and storage, electricity supply and supporting services, mining and mining services, geothermal, biofuel, biogas, waste-energy and conservation services. Annex II covers supporting approvals across those subsectors and geology, including operational-worthiness, technical registrations, explosives storage, electricity pricing, geothermal support, waste-energy operational certificates and groundwater approvals.
Each standard identifies the activity and KBLI, terminology, permit form, risk or business classification, administrative and technical requirements, evaluation process, term and business obligations. The annexes therefore function as filing and operating checklists, not merely descriptions of licence names. A company should use the standard for its exact activity because capital, technical, staffing, safety, domestic-capability, reporting, inspection, supply and infrastructure requirements vary across permits.
Basic-requirement treatment also depends on the project. The main regulation addresses spatial and environmental requirements and provides targeted spatial-assessment exceptions for specified oil-and-gas work areas, electricity infrastructure and exploration stages. Activities in forest areas or marine waters remain subject to the separate legal requirements for those locations; an OSS or ESDM permit does not displace them.
The transition protects a PB or PB UMKU issued before 12 June 2026 only until its stated expiry. Existing licence holders are generally exempt from the new implementation provisions while that licence remains valid, unless the new provision is more favourable, and old nomenclature is read as the equivalent new nomenclature. This protection should not be treated as approval for a new site, capacity, activity or regulated change.
Applications already in process remain under PP 5/2021 and Permen ESDM 5/2021, or the former groundwater framework, until the OSS system adjusted to PP 28/2025 operates. Businesses should retain the submission timestamp and regulator correspondence that establish which regime applies. A separate transition requires existing oil-and-gas product blending with biofuel to comply by 12 June 2027.
Sanctions differ by subsector but can include warnings, temporary suspension or freezing, administrative fines, cessation and licence revocation. Investors, directors and lenders should therefore reconcile the legal entity, KBLI, site, technical standard, licence term and post-licence obligations before a renewal, expansion, acquisition or financing milestone, and should not rely on the mere presence of an NIB as proof that every sector approval is complete.
Late discovery: the instrument took effect in June 2026 but was not previously recorded in the Regulation Watch ledger. The Ministry's current JDIH metadata and official 324-page text now provide the primary-source basis for publishing the replacement standards without changing their true legal dates.
Required action
- Map every Indonesian ESDM activity and project to its current KBLI, subsector and exact Annex I PB or Annex II PB UMKU standard; include supporting activities that sit outside the company's primary KBLI.
- Reconcile the NIB, OSS project data, company objects, investment approval, site coordinates, land or area entitlement, spatial approval, environmental approval, building and safety records, and the technical licence held by each operating entity.
- For every new application, renewal, extension, facility change, capacity change or ownership transaction, rebuild the filing checklist from the applicable Permen ESDM 7/2026 annex rather than reusing a Permen ESDM 5/2021 checklist.
- Create an expiry and grandfathering register for every PB and PB UMKU issued before 12 June 2026. Existing valid licences remain effective to expiry, but that protection should not be assumed to cover a new activity, a material change or a renewal.
- Review the applicable annex for sector-specific capital, technical capability, Indonesian-versus-foreign workforce, local-content, reporting, inspection, safety, environmental, financial-guarantee, supply, infrastructure and operational obligations; the requirements differ materially by activity.
- If the business blends refined oil-and-gas products with biofuel under an existing processing, storage or trading licence, complete the required adjustment no later than 12 June 2027.
- Track the OSS transition status for any application already pending when the regulation took effect and preserve evidence showing whether the application continues under PP 5/2021 and Permen ESDM 5/2021 or has moved to the PP 28/2025 framework.
- Update financing, acquisition and project-development due diligence so licence validity, permit nomenclature, supporting approvals, renewal timing and post-licence obligations are tested against the new standard before funds are committed or operations expand.