To strengthen groundwater governance and licensing compliance, the Ministry of Energy and Mineral Resources ("MEMR") issued MEMR Regulation No. 4 of 2026 on Guidelines for the Use of Water Resources in Groundwater and Procedures for the Imposition, Calculation, Payment and/or Deposit of Non-Tax State Revenue in the Form of Administrative Fines for the Arrangement of Groundwater Business Permits and Groundwater Use Approvals ("MEMR Regulation No. 4/2026"), effective 22 January 2026.

MEMR Regulation No. 4/2026 provides detailed procedures for the issuance of Groundwater Business Permits and Groundwater Use Approvals, and establishes a framework for the imposition of administrative fines on parties that construct groundwater wells or utilize groundwater without the required permits or approvals, including where previous approvals have expired.

The regulation introduces a formula-based mechanism for calculating administrative fines, taking into account factors such as groundwater utilization volume, groundwater user classification, applicable tariff rates, and the duration of non-compliance.

Failure to settle the applicable administrative fines may result in the rejection of groundwater-related license applications submitted through the OSS System.

By establishing clearer compliance and enforcement mechanisms, MEMR Regulation No. 4/2026 reinforces the government’s oversight of groundwater utilization and encourages business actors to ensure that groundwater extraction activities are properly licensed and administered.