The government said Monday it would try to accommodate all suggestions from foreign and local businesses about the newly introduced negative investment list (DNI), but would leave it as it was for now.
"We will carry on with what we have at the moment. However, we will listen to their concerns and will try to accommodate them in the upcoming ancillary regulations," Coordinating Minister for the Economy Boediono said after a meeting with business associations.
Boediono said that the substantive list could only be revised when changes were made to other relevant laws, such as the Transportation Law, which would likely open the way up to foreign ownership in that sector.
"In time, if there must be revisions, we will certainly make them," he said, while implying there would be no revisions just because of criticism from the business associations.
In order to accommodate the concerns of business, Boediono said that the government, together with stakeholders from all sectors, would discuss possible solutions at a special forum organized by the nation's export and import promotion working group (PEPI).
"During the forum, we can discuss matters so as to achieve concrete solutions that will be accommodated in the upcoming ancillary regulations for each sector," Boediono said.
The Indonesian Chamber of Commerce and Industry (Kadin), foreign business associations and representatives from about 100 domestic business associations held a meeting with Boediono and submitted a list containing some 50 items, which included queries, criticisms and suggestions regarding the negative investment list.
"The list of areas barred to investment must not be open to interpretation, and it must be easily applied. It has to provide certainty to business and be consistent with global best practice," Kadin chairman Muhammad S. Hidayat said.
Hidayat said that the questions and criticisms had a lot to do with gray areas in the list that could generate differing interpretations, and also the rationale behind some of the decisions made --- such as the reason for 11 foreign-ownership percentage categorizations.
Other questions related to concerns that foreign firms might be forced to sell stakes when renewing their licenses as a result of increased foreign ownership restrictions in some sectors, such as the 65 percent limit in the mobile telecoms industry, compared with 95 percent previously.
There was also confusion about the terminology used in the list.
Some chamber members asked about the definition of "major pharmaceutical firms" as there was no definition given of the term "major". In addition, questions were raised about the meaning of the term "small and medium enterprise" as used in the list as firms in some sectors would be required to enter into partnerships with SMEs.
Summarizing some of the government's responses to the associations, Trade Minister Mari Elka Pangestu said that about one-third of their concerns were related to the possibility of retroactive application of the new regulation.
"We were able to answer most of their questions. The new regulation is not retroactive. If you are an existing company or if you expand or undertake a merger or acquisition, as long as you don't change your line of business and you don't exceed the (percentage shareholding) limit, it will not be a problem," Mari said.
She explained that a lot of the concerns of the foreign chamber members were due to the fact that they had not understood the regulation.
"But now they feel better. Those concerns that have not yet been answered, which are primarily concerned with definitions, will be dealt with by the ancillary regulations."