Indonesian Govt promises to remove all unnecessary permits
Govt promises to remove all unnecessary permits
The Jakarta Post, Jakarta | Business | Sat, June 29 2013, 4:25 PM
Paper Edition | Page: 14
The government has promised to remove all the permits deemed to have hampered investment activities both in the manufacturing sector and mining and oil and gas sectors amid growing concerns from investors about the complicated licensing procedures in the country.
Coordinating Economic Minister Hatta Rajasa said that the government would soon introduce an economic policy package, which would simplify the licensing procedures to do business in trade, manufacturing, oil and gas exploration activities.
As part of the licensing simplification plan, his office would transfer the license granting authority from ministries or local governments to the single window integrated licensing service (PTSP).
Besides simplifying the licensing procedures, the government would also remove the regulations that have no legal basis and are not supported by a higher law. “For example, the regulations issued by the directorate general or ministries, which are not supported by higher law,” Hatta said in his office on Thursday.
“I’ve given directives to all ministries to make a matrix of suggested regulations to be scrapped, which we will discuss in a coordination meeting next week,” Hatta said.
Hatta said there were “thousands” of problematic permit regulations, either those issued by local governments or those issued by ministries. “For example, in order to open a gasoline station, you would need 17 different licenses. To conduct mining exploration, you’d need 25 licenses. In order to begin commercial production, you’d have to obtain another 25 permits,” he said.
He said that his office would head a team that would be tasked to monitor and evaluate the process of licensing simplification. Another policy focus is to foster legal certainty by setting the number of days needed to acquire licenses, he added.
“When a business applies for a license, they need to be given a guarantee when that license would be granted,” Hatta said, adding that the license simplification program should be immediately conducted to ensure that the current complicated licensing problem would not scare away investors.
According to him, the licensing problems have become the main concern of investors when they open their business in the country. “US-ASEAN Business Council, for example, said the business permit licensing process in Indonesia is too complicated,” he added.
Members of the US-ASEAN Business Council met President Susilo Bambang Yudhoyono along with Cabinet ministers during their Indonesian visit early this week. Besides licensing problems, lack of legal certainty and lack of transparency are specific areas which should be surmounted by the government in order to be able to attract more foreign investors.
“There’s one that comes across in ASEAN where we want to see improvement, and it’s that all ASEAN would benefit from more transparency in the development of policies and regulations, and better governance across the board would help a lot; making the countries stronger, but also more appealing to investment,” Alexander C. Feldman, US-ASEAN Business Council President, said.
All in all, Hatta said, he hopes that the economic policy package would encourage investment, ease business, increase competitiveness and improve the economic outlook. The coordinating ministry is also prepping a Negative Investment List (DNI) which will be discussed at a coordination meeting next week. (asw)