House threatens to endorse FTZ bill without govt consent

Rendi A. Witular, Jakarta

Angered by the absence of key ministers during a hearing to deliberate on a bill about the free trade zone (FTZ) for Batam Island, a senior lawmaker warned the government on Tuesday that the House of Representatives would endorse the bill without the government's consent.

Surya Dharma Ali, chairman of the special House committee tasked to deliberate the FTZ bill, said the absence of the ministers might put at risk efforts to endorse the bill by the Sept. 14 deadline.

"The House and the government have agreed that the bill should be endorsed this month in order to increase the confidence of foreign investors and ensure legal certainty for companies currently operating on the island," said Surya.

"Like it or not, the House will try to endorse it without consulting first with the government," he said.

The hearing on Tuesday was supposed to be attended by Minister of Trade and Industry Rini Soewandi, Minister of Finance Boediono, Minister of Home Affairs Hari Sabarno, and Minister of Justice and Human Rights Yusril Ihza Mahendra.

However, only Attorney General MA Rachman showed up on Tuesday on behalf of Yusril, who is on an overseas trip.

Boediono and Hari did not give any reason for their absence, while Rini said that her decision not to attend the meeting was due to the absence of Yusril, and due to the fundamental differences between the government and the House regarding three articles in the proposed bill.

In a letter sent to the House, Rini said the articles included the government's proposal to grant FTZ status, but only in certain industrial areas on the island, known also as "enclave FTZs", while the House recommends the whole of Batam Island be granted full FTZ status.

The other articles are on the authority to manage seaports and the airport in Batam, and on how to determine the neighborhood units (locally known as RT) and community units (known as RW).

The letter by Rini also suggested that the House cancel the hearing until further notice, or unless all key ministers agreed to attend the hearing.

Surya said the decision by Rini and other ministers not to attend the hearing was a form of "sabotage" on the part of the government to prevent the House from endorsing the bill.

Surya said the special committee would give the government another chance to show up at an upcoming meeting scheduled for Thursday, or else the committee would propose to the House plenary meeting to immediately endorse the bill.

The House and the government have each proposed separate bills, one of the few times in recent years that such an instance has occurred. A bill is usually proposed by either the government or the House.

The House, which is empowered by the Constitution to draw up a bill, completed its draft several years ago. However, the government refused it and instead drafted its own version, which was completed earlier this year.

A further delay in defining Batam's FTZ status carries with it the fear that it will harm the investment climate on the island -- one of the most modern investment destinations in the Asia- Pacific region.