In a city known for its chaotic, unplanned growth, an apparently sudden conversion of the Jakarta administration to the merits of urban planning and the enforcement of zoning rules has small businesses in residential areas both up in arms and worried about the future.
And the Jakarta branch of the country’s biggest business association, the Indonesian Chamber of Commerce and Industry (Kadin), has warned that strict enforcement of the rules would threaten thousands of small businesses housed in private residences with bankruptcy and tens of thousands of workers with redundancy.
Nevertheless, the administration intends to persist with its approach to violations of a 1977 Jakarta gubernatorial zoning decree, which stipulates that only 25 percent of a residential dwelling may be used for commercial purposes. The policy is being enforced by officials from Jakarta’s five municipalities.
“We condemn the administration’s policy,” Irwandi MA Rajabasa, a member of Kadin’s Jakarta branch, said on Thursday. “If this decree is fully implemented, it will devastate the business sector, especially small businesses.”
He said that it meant that Jakarta only laid out the welcome mat for big business, and had no time for small players.
He also insinuated that the administration’s moves may not be entirely based on a desire to uphold the rule of law. “There is something seriously wrong when a gubernatorial decree sides with commercial property interests by forcing people to move to commercial zones,” he said, adding that he believed the administration was motivated by a desire to bolster property prices, which were currently in the doldrums.
Kadin’s Jakarta branch has about 11,000 members, 80 percent of whom are small business owners, he said.
In order to secure a permit from the local municipal administration, the owner of a business must produce a letter of domicile issued jointly by the city ward and subdistrict head. But they have now been instructed to first verify whether their businesses comply with zoning rules.
“Some of our members say they are really worried about what is going to happen,” he said. “If they can’t get a letter of domicile to extend their business permits, they won’t be able to run their businesses going and will be faced with bankruptcy.”
Hatta Simanjuntak, chairman of the Jakarta branch of the Indonesian Goods and Services Suppliers Association (Aspanji), said rigid enforcement of the gubernatorial decree would sound the death knell for many of the association’s members, because without the letters of domicile to obtain permit renewals, they would no longer be able to bid for local government tenders in Jakarta.
“This is a real dilemma,” he said. “According to the decree, we can’t operate from our homes, despite the fact that most of our members are small firms supplying things like stationary or office equipment.”
According to the Jakarta Building Monitoring and Control Agency, however, the new policy is necessary to bring order to Jakarta’s expansion and ensure that the city spatial plan is followed.
Besides tightening up the issuance of business permits, the administration is also cracking down on structures built without proper planning permission (IMB). It estimates that some 4,000 unauthorized buildings erected in residential areas may be liable to demolition.
A number of illegal structures have already been torn down, including five shop-houses valued at Rp 2 billion ($202,000) in Kemang, South Jakarta, in April. A six-story, half-finished office block in Setiabudi, also in South Jakarta, was torn down on Monday in the biggest compulsory demolition ever ordered by the Jakarta administration, followed on Wednesday by a mosque built without planning permission.
So determined was the Jakarta administration to get rid of the reinforced concrete structure in Setiabudi that Hari Sasongko, the head of the Building Monitoring and Control Agency, threatened to call in police bomb experts to blow it up, if necessary.
The long-standing 1977 zoning decree has rarely been acted on in the past, although officials have regularly made threats to enforce it, especially in the Kemang area. But, inexplicably, nothing was ever done, much to the chagrin of local residents, as reflected in letters to newspapers.
However, this time around things appear to be different.
It is not immediately clear what the motivation for the administration’s sudden change of heart is, although it may well be related to national legislation enacted in late 2007 that threatens officials who issue business permits in violation of a spatial plan, with up to five years in jail and a fine of Rp 500 million.