Thursday, March 31, 2016


Jakarta, March 31, 2016 (Antara) - The Indonesian Government plans to scrap thousands of local regulations, which seem to be hampering investment, given that they are slowing down the process of licensing and for doing business in the country.
        Home Affairs Minister, Tjahjo Kumolo, said 3,226 local regulations are potentially stalling investment and contradicting higher laws in Indonesia.
        "We have called officials of legal bureaus of all provinces and sent letters to district heads and mayors, (informing that) within the next three months, such local regulations will be revoked," Tjahjo Kumolo said in Padang, West Sumatra, on March 31.
        The regulations contain complicated bureaucratic and licensing procedures.
       The minister cited the example of when an investor needs to apply for a principle permit, a building permit (IMB), or a Hinder Ordonantie (HO) or Nuisance Permit, for opening a business in Indonesia.
       "In fact, the HO permit is from the Dutch colonial era. Why is it still being used? That's what we want to deal with," he pointed out.

        In the energy field, the licensing documents will be cut from 200 pages to 15 pages,  Tjahjo added.
        "If in the past, the licensing process took one week, now it's just a matter of hours," he said.
        Some local regulations are also not synchronized with each other, and even contradict higher laws, he remarked.
        Tjahjo, however, admitted that certain regions, such as autonomous provinces like Papua, will need different regulations from West Sumatra, for example.
        The point is how to simplify investment licensing procedures and to prevent unnecessary fees.
        The revocation of more than three thousand local regulations is expected to be completed by May this year.
        Meanwhile, the Home Affairs Ministry has revoked 26 percent of its total regulations, he noted.  
   During the 2016 `Ease of Doing Business' survey, the World Bank had ranked Indonesia 109th out of 189 countries. Singapore topped the list, with Malaysia ranking 18th, Thailand 49th, Brunei 84th, and Vietnam 90th. 
   President Joko Widodo also held a limited cabinet meeting on building permits, environmental licenses and hindrance licenses in Jakarta recently.

        "We should improve all aspects of licensing in relation to issuing building and environmental permits, as well as authorization," President Joko Widodo stated during the opening of the meeting.
        The President also remarked that the government should improve the licensing process as part of efforts to improve the business climate in Indonesia.
        The head of state also called for the integrated management of business licensing and the registration process to improve efficiency and boost the business climate.
        The licensing requirements were reviewed during the meeting because the Capital Investment Coordinating Board (BKPM) still needs regulations to be relaxed to attract investors, Cabinet Secretary, Pramono Anung said after the discussion.
        "There are a number of licenses to be abolished, such as hindrance license, location license and principle licenses for small and medium enterprises," he said.
        The government is also considering scrapping the environmental license or analysis of environmental impact (Amdal), Pramono said.
        Coordinating Minister for Economic Affairs, Darmin Nasution, had earlier confirmed that the Indonesian government is preparing guidelines and revising various regulations that will make it easier to do business as part of the efforts to facilitate investors, who want to start a business in Indonesia.
        In the meantime, the Head of the Investment Coordinating Board (BKPM), Franky Sibarani has called on regional administration authorities to follow up the licencing simplification process being carried out by the central government.
        "The licensing simplification process is an ongoing process, and both local and central governments must continue the synergy to make sure that the cooperation agreement signed in last February and witnessed by President Joko Widodo, is implemented," he said in Jakarta on Thursday.
        The board recently launched easy investment services called KLIK, which is a new mechanism that allows investors to begin construction even as the application process for building permits (IMB), environmental licenses and other regional permits is still underway.
        The KLIK scheme was officially launched on February 22, as part of the third package of reforms issued by the Joko Widodo (Jokowi) administration within 15 months of holding the executive power. 
   The simplified investment services are applicable to 14 industrial zones, covering 10,022 hectares of the total 17,154 hectares of industrial zone areas, located in nine districts and cities in six Indonesian provinces.  
   The two previous reforms were the One-Stop Investment Service (PTSP), launched by President Jokowi on January 26, 2015, and the three-hour Investment Licensing Service, announced by Vice President M Jusuf Kalla, on January 11 this year.  ***3***
(T.SYS/A/BESSR/F. Assegaf) 31-03-2016 21:03:38

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