Wed, 10 Feb 2016

Investors will be allowed to kick off the construction of their factories and other investment facilities without having to wait for the issuance of environmental assessment documents and construction permits under a new investment program to be launched by the Investment Coordinating Board (BKPM) next month.

BKPM chairman Franky Sibarani said in a press conference on Tuesday that the board would launch a new mechanism allowing investors to begin construction while application processes for building permits (IMB), environmental licenses and other regional licenses are still underway.

“We hope to launch the mechanism in the fourth week of February,” Franky said.

The scheme, abbreviated KLIK, will allow new or existing investors with new investment worth more than Rp 100 billion (US$7.3 million) and/or employing at least 1,000 local workers to begin construction before obtaining an IMB or environmental licenses such as environmental impact analysis (Amdal).

Franky explained that BKPM had so far included nine industrial zones in the mechanism, with support already assured from the respective regional administrations.

“We hope that the nine zones will be a pilot project and that other local administrations will follow suit,” he said, adding that 20 industrial zones had initially applied for the scheme.

Among the designated industrial zones in the initial phase are four zones in Central Java, one in East Java, one in South Sulawesi and three in Banten.

Franky said he expected the mechanism to help investors kick off their businesses in the country and provide jobs for more local workers.

The BKPM’s deputy director for investment monitoring and implementation, Azhar Lubis, said at the same event that there were 49 unresolved cases in the board’s “debottlenecking” projects as of January this year, including 42 left over from last year’s 88 cases.

Debottlenecking refers to efforts to help potential investors overcome any problems, including to do with environmental licensing, port location licenses, raw sugar import and industry-grade salt import.

Franky said that he expected that KLIK, coupled with debottlenecking and other measures, would boost employment across the archipelago. Last year alone, 40 companies investing in the country as part of the government’s “job vacancy” program employed 20,683 workers, with a target of 184,779 workers by 2019 once the investment is fully realized, BKPM data show.

The 40 companies plan to invest a total of Rp 45.8 trillion, with 59.6 percent realized last year.

Manpower Minister Muhammad Hanif Dhakiri said that the news belied recent labor rallies over layoffs, claiming more jobs were opening up than there were layoffs, and questioning the validity of union data.

The Confederation of Indonesian Workers Unions (KSPI) recently announced that Japanese electronics giant Panasonic had closed its two factories and laid off 1,600 workers, while Toshiba planned to lay off 900 workers.