BKPM wants monopoly in plantation permits

BKPM wants monopoly in plantation permits

JAKARTA (JP): The Investment Coordinating Board (BKPM) is
seeking the President's approval to become the sole agency
responsible for issuing business permits in the plantation
industry, a board executive said here on Tuesday.

The vice chairman of BKPM, Andung A. Nitimihardja, said
pooling the licensing process under BKPM would cut the
complicated bureaucratic procedures faced by potential investors
when applying for business permits.

Andung said potential investors were currently required to
obtain licenses from at least four government offices before they
could develop a plantation.

Investors must obtain a forest relinquishment permit from the
Ministry of Forestry and Plantations, the right-to-use-land title
from the National Land Agency (BPN), a location permit from the
local administration and investment approval from BKPM.

Andung said such complicated licensing procedures often
discouraged potential investors.

"We have received several complaints from investors about the
complicated procedures. The state minister of investment/BKPM
chairman has met with the minister of forestry and plantations
and the chairman of BPN to discus the possibility of pooling the
licensing procedure under one government office," he said.

Andung said a number of potential oil palm investors were
unable to realize their plans to open oil palm plantations
because of the complex licensing procedure.

He said many of the investors who wanted to develop
plantations had received investment approval from BKPM and
location permits from the provincial administration, but were
not able to develop plantations because they could not obtain
forest relinquishment permits from the Ministry of Forestry and
Plantations.

It currently takes two days for investors to get investment
approval from BKPM and one year for investors to get a location
permit from the provincial administration. However, they must
wait at least two years to get the forest relinquishment permits,
Andung said.

Andung said the government needed to revoke the ruling which
obliged potential plantation investors to obtain forest
relinquishment permits.

He said the Cabinet meeting on investment scheduled for July
would decide whether BKPM would become the sole agency in charge
of issuing business permits in the plantation industry.

"If the government decides not to give its approval to BKPM,
investors should be allowed to work on their projects on the
basis of location permits issued by the provincial
administration. Or, at the least, the forest relinquishment
permits could be issued by the ministry's provincial offices," he
said.

Sources said the proposal for one-stop service in issuing
business permits in the plantation industry had received
opposition from other related government offices, which often
abuse the licensing process to charge investors illegal fees.

Investors who want to develop plantations often have to bribe
officials to ensure they obtain their licenses in a timely
matter, the sources said.

Aside from difficult licensing procedures, rampant looting and
theft at plantations also discouraged investors from investing in
the country's plantation industry, Andung said.

"It's a pity because Indonesia is the best place to develop
oil palm plantations since the Malaysian oil palm sector is
already crowded," he said, adding that the government should take
strict action to deter looters.

Director General of Plantations Agus Pakpahan said earlier
this month that rampant looting of plantations in 1998 caused an
estimated loss of Rp 2.6 trillion.(gis)