Govt announces July Package for Batam's 'Bonded Zone Plus'
Govt announces July Package for Batam's 'Bonded Zone Plus'
Zakki P. Hakim
and Fadli
The Jakarta Post/Batam
The status of the Batam Industrial Bonded zone, Bintan Industrial
Estate and Karimun Industrial Cooperation zone have been upgraded
to "Bonded Zone Plus" to give investors more legal certainty, top
officials say.
Minister of Finance Jusuf Anwar and Minister of Trade Mari E.
Pangestu introduced the governmental regulation and three
ministerial decrees through the July Package of deregulation
measures here on Friday. The regulations would serve as legal
basis for the status upgrade, they said.
The package is expected to address four main legal and
investment issues -- the status of assets in the zones, the
status of land and spatial plans, the workings of the Batam
Industrial Development Agency (BIDA) and the Batam municipality
administration, Mari said.
"The package is based on input from various stakeholders. It
is expected to provide incentives for investors, including
facilitating an easier and faster flow of goods," she said.
Under the package, the government now allows manufacturers in
the three areas to import used capital goods for industrial
purposes without official permits and surveyor inspections, as
long as they were an inseparable part of relocating businesses to
the zones.
Several permits and taxes in the zones have also been scrapped
under the package.
The policy is also expected to improve export-oriented
business performance and sustainability; reduce costs, simplify
procedures and maintain consistent policies; give clear
distinctions and regulate industrial and residential zones;
ensure fair taxation; and maintain an easy and fast flow of goods
in the industrial zones.
It would also enable the government to simplify customs
procedures by delegating the authorities of the finance ministry
or its Directorate General of Customs to the heads of local
Customs Service Office (KPBC).
Mari acknowledged that the package might not solve all the
problems in zones, "but, at least it could address many problems
that have been neglected for years."
The private sector, however, cautiously welcomed the package.
Head of the Indonesian Employers Association Riau Island
chapter, Abidin, said although the policies were business-
friendly, they were weaker than laws, which would give businesses
more confidence.
"We greatly appreciate the July Package, but we still expect
that Batam's status be strengthened in a law," he said.
Batamindo Industrial Zone general manager John Sulistiawan
said that the package seemed to have returned Batam's status to
Free Trade Zone; which was an extremely positive move.
"(However) we still have to see the implementation; will it be
as good as the ministers have announced?" he said.
Batam Small and Medium Enterprises coordinator Dorlan Naibaho
said the policies seemed to focus more on foreign investors than
local SMEs, many of whom still depended on imported goods.
Batam is an attractive manufacturing and industrial location
in Southeast Asia, hosting some 600 foreign companies and
absorbing more than US$3 billion in foreign investment.