Investment bill aimed at breaking barriers

Investment bill aimed at breaking barriers

JAKARTA (JP): The Investment Coordinating Board (BKPM) is
drafting a new investment bill that will give equal treatment to
foreign and domestic investors, the BKPM chairman said on
Wednesday.

Theo F. Toemion said the draft bill, currently being discussed
with representatives of various ministries, would be submitted to
the House of Representatives (DPR) for deliberation in November.

When passed into law, the bill will replace the 1967 law on
foreign investment and the 1968 law on domestic investment.

"This new law will in effect break the barriers between
foreign and local investments, which have so far been
differentiated," Theo said on the sidelines of a business
luncheon hosted by the Indonesia-Australia Business Council
(IABC).

Theo contended that equal treatment between foreign and local
investors would greatly increase Indonesia's attractiveness in
the eyes of foreign investors.

He cited the need to extend the land use permit for foreign
direct investment companies so that they would be more willing to
increase investment through various expansions and new
investments.

"We need to be like China, which gives land use permits for up
to hundreds of years," he said.

Theo, however, did not say whether his proposal would mean a
revision of the 1960 land law.

According to the land law, a land use permit is valid for a
maximum of 50 years.

Unlike local investors who can own land, foreign investors can
only use land under a land use title or concession rights, and
both carry a maximum time limit of 50 years.

Theo also said that the investment bill would also encompass
investment in mining as well as the oil and gas sectors, which
are presently governed by the 1967 Law on mining and the 1971 Law
on state oil and gas company Pertamina.

"Why should there be one law for investment in every other
industry and separate ones in mining and oil and gas?" he said.

It was not immediately clear, however, whether the investment
bill will complement or contradict the mining bill and the oil
and gas bill, both of which are currently being deliberated by
the House.

Theo realized his proposal for a new investment law would face
many challenges from a number of ministries.

He explained that the Ministry of Finance, for instance, had
expressed its opposition to equal treatment between foreign and
domestic investors.

"This is a very new concept and must be made public as soon as
possible. Its (success) will depend largely on the reactions of
our friends at the DPR," said Theo, who was the vice chairman of
House Commission IX for financial and development planning
affairs prior to his appointment as BKPM chairman.

With the new investment bill, Theo said he hoped to get more
authority over the management of direct investment in Indonesia,
explaining that the board had yet to reclaim its main function of
coordinating investment in the country.

"We need to act radically and revolutionary," he said, adding
that he had accepted the post as BKPM chairman on the condition
that he would be allowed to act in that manner, or else he would
have stayed a member of the DPR. (tnt)