BKPM Admits Indonesian Investment Permits Are Overly Bureaucratic, Burdened by Technical Approvals
The government is currently focusing on improving the business climate, particularly in terms of investment permits.
Summary:
The government, through BKPM, is streamlining business ease and cutting investment permit hurdles to help Indonesia catch up with countries like Vietnam in competitiveness.
A key focus is eliminating technical approvals (Pertek), which are seen as slowing down investment processes and frequently complained about by businesses.
BKPM is also pushing for the implementation of Service Level Agreements (SLAs) via the Online Single Submission (OSS) system, enabling automatic processing of permits if deadlines are missed.
The government continues to accelerate the domestic investment climate to boost national industrial growth.
This step is deemed crucial for Indonesia to keep pace with regional countries such as Vietnam, which has recorded high economic growth supported by export and manufacturing sectors.
Riyatno, Deputy for Investment Climate Development at the Ministry of Investment and Downstream Development/BKPM, stated that the government is currently focusing on improving the business climate, especially regarding investment permits.
Besides attracting domestic and foreign investment, BKPM is also focused on providing services that simplify business and permit processes for investors.
Riyatno noted that investment realisation achievements cannot be separated from cross-ministry, agency, and local government collaboration.
In implementation, coordination is conducted with provincial and regency/city Investment and One-Stop Service Agencies (DPMPTSP) that directly interact with businesses.
One of the issues highlighted by the government is the lengthy process of obtaining technical approvals or Pertek.
He said the President, along with coordinating ministries, has requested that these hurdles be gradually eliminated.
“Obstacles in the permit process, such as dealing with Pertek (Technical Approvals). President has instructed that Pertek must be removed, even during a coordination meeting two weeks ago involving the Coordinating Minister for Economic Affairs, the Minister of Industry, our ministers, and other ministries under Economic Coordination, that Pertek must be eliminated,” Riyatno explained.
As a solution, BKPM is encouraged to implement Service Level Agreements (SLAs) through the Online Single Submission (OSS) system.
With this mechanism, if permits are not issued within the stipulated timeframe, the OSS system will automatically proceed with the process.
“We are aiming to implement a positive system. So if it’s not issued within a month or according to the SLA, the OSS system will proceed,” he said.
BKPM is optimistic that simplifying permits will drive higher national economic growth, particularly through strengthening the manufacturing sector.
Riyatno cited West Java, which has consistently been one of Indonesia’s top investment regions due to numerous industrial zones.
“This is an example. West Java is one of the provinces with the highest investment because of what? Because it has the most industrial zones,” he added.