Govt told to live up to trade rules
The Jakarta Post, Jakarta
Although the government is pledging simpler, shorter and more clear-cut procedures for prospective foreign traders, businesspeople warn they could end up as empty promises without diligent implementation.
"The revised regulations look good, but only on the condition they are properly implemented," Indonesian Retail Merchants Association head Handaka Santosa said Friday of revisions to eight regulations introduced Wednesday.
He noted the incomplete implementation of a fuel price hike compensation package for industries launched last October.
"The scrapping of value-added tax on primary products, for example, has not been realized until now. The simplification of trade procedures should not end up like that."
Indonesian Food and Beverage Association head Thomas Dharmawan acknowledged that it would take proper, well-planned implementation of the regulations to draw new investment.
Trade Ministry revisions include reducing the number of documents required to obtain trade-related licenses as well as the procedural layers. The process of obtaining a trade license also has been slashed to five working days, from the current seven to 10 days.
The ministry will also allow joint-venture companies with no more than 49 percent foreign shareholding to obtain trading licenses.
Previously, based on a 1977 government regulation, the licenses could only be issued to purely local entities.
The ministry's director general for domestic trade, Ardiansyah Parman, said obtaining the licenses would no longer require a domicile letter.
The revisions, with six more expected beginning next month, were made as follow-up to Presidential Instruction No. 3/2006, issued to improve the country's investment climate.
Trade Minister Mari E. Pangestu said the revisions were intended to eliminate the high-cost economy, ease procedures and provide legal certainty for healthier, more conducive investment conditions.
She added that a regulation on modern retailing was not among those to be revised because it would be stipulated in a presidential regulation.
Trade regulations: Getting a trimming
1. Processing of trading license (SIUP) now requires four documents instead of the previous six 2. Franchise license (STPUW) requires six documents instead of eight 3. Survey Service License (SIUJS) requires nine documents instead of 12 4. Foreign Trader Representative License (SIUP3A) requires nine documents instead of 12 5. Direct-trading license (SIUPL) requires five documents instead of 10 6. Issuance of goods and services distributor license to take a maximum of five days 7. Issuance of license for the import, distribution and sale of alcoholic beverages to take a maximum of five days 8. Warehousing regulations only require two documents from previous three documents, with five days necessary for issuance
Coming up in April/May
1. Regulation for inter-island registered sugar trading 2. Regulation for inter-island sugar trading 3. Regulation for inter-island refined-sugar trading 4. Regulation for registration of Indonesian manuals and guarantee certificates 5. Regulation for approval of trade, conventions and seminars 6. Recommendation for foreign workers' permit
Source: Trade Ministry