Regional autonomy abused to take levies, says Ryaas

JAKARTA (JP): The Regional Autonomy Law, No. 22/1999, has been exploited by certain governors, regents and mayors to take illegal levies from foreign investors, a minister claimed on Monday.

State Minister of Regional Autonomy Ryaas Rasyid told a hearing with the House of Representatives' Commission II for domestic and legal affairs that due to rampant levies the Singaporean government and some foreign companies had to take action that might wreak havoc to the investment climate in the country.

"Reliable sources told me that Singapore has added several provinces and regencies to its negative investment list in Indonesia," Ryaas said.

"Other bad news is that at least 13 foreign oil companies have stopped operating here due to the levies."

He stopped short of identifying the regions or companies, but said the levy taking had become a trend since the regional autonomy law was passed last year.

The government has set Jan. 1 next year for the full implementation of the law, along with the law on fiscal balance between central and local governments.

Illegal levies asked by government officials dealing with licenses have also become the main concern of domestic investors, who blame them for the high-cost economy.

A related government regulation issued in May which delineates the authorities of regional government does not elaborate on the rights of local governments in the investment field.

Ryaas said the government was now preparing a regulation which would rule on, among other things, the levies and taxes regional administrations could take.

"We call on the governors and the regents to stop the practice since it will add burdens to the companies," he said.

He said the regulation and other seven regulations related to regional autonomy were expected to be completed in September.

"We hope the regional autonomy law can be applied right on schedule in January next year, after all the government regulations are completed," he said.

He claimed that all the ministries in the Cabinet supported the regional autonomy, including the Ministry of Forestry and Plantations. He said he himself approached his colleague the forestry minister to make him accept the law.

Ryaas said there has been a tendency for the ministries to try to sell their assets, which, according to the regional autonomy law, should be handed over to local governments.

"We should watch over this (tendency). They apparently remain reluctant to give the assets to the regional administrations," he said.

He said President Abdurrahman Wahid had repeatedly asked his Cabinet ministers to comply with the law.

Ryaas also pointed out that the spirit of regional autonomy had created strong local legislative councils. This has caused some excesses, including legislators in some of provinces trying to sack their governors.

"Not all the governors who were elected in the past regime are bad people. The legislative council should not arbitrarily dismiss the governors," he said.

He said a governor's annual report before the local legislature is mandatory according to the law, but could not be used to topple the governor.

"But if the dismissals are related to legal cases, they could be conducted any time," he said. (jun)