Trade Minister Slams Local Governments Over Retail Permit Disputes

Jakarta, CNBC Indonesia - Trade Minister Budi Santoso has highlighted the controversy surrounding the closure of dozens of modern retail outlets in Lombok, West Nusa Tenggara (NTB). He urged local governments to be more transparent from the outset when issuing business permits to prevent similar incidents in the future.

The scrutiny arose after several minimarket chains, including Alfamart, were temporarily shut down due to zoning and permit issues. Budi stated that approximately 25 modern retail outlets in Central Lombok had ceased operations but have since reopened.

He expressed regret that land use and local regulations were only questioned after the retail businesses had been operating for a long time.

‘We also regret that these retail outlets have been operating for years, yet the zoning adjustments are only being addressed now,’ Budi said during a work session with Commission VI of the House of Representatives at the parliamentary complex in Jakarta on Tuesday (26/5/2026).

Budi noted that the Ministry of Trade has communicated with the Association of Indonesian Retailers (Aprindo) and local governments to ensure policies consider business certainty and the welfare of retail sector workers.

He stressed that local authorities should provide clear regulations before issuing business permits to prevent investors from suffering losses after committing capital and starting operations.

‘Going forward, we caution local governments. For any business, including retail, certainty should be provided from the start. Permits must be clear and transparent. Do not let companies operate only to later discover regulatory violations. This must not happen,’ he said.

‘Rules must also be transparent to businesses to avoid future issues. That is what we emphasise to local governments,’ Budi added.

He explained that technical regulations, such as the distance between minimarkets or between modern stores and traditional markets, fall under the jurisdiction of local governments via the Regional Spatial Plan (RTRW).

Therefore, zoning rules vary by region. However, he cautioned that policies should be implemented fairly without harming existing businesses.

‘Each local government has different rules. For instance, the distance between retail outlets varies by region, as each has its own Regional Spatial Plan,’ he said.

Previously, Aprindo Chairman Solihin confirmed that the closed outlets have reopened. He stated all Alfamart stores previously shut down have resumed operations.

‘First, all stores in Central Lombok are now open. They’re all reopened,’ Solihin told CNBC Indonesia on Tuesday (26/5/2026).

Addressing social media reports about closures leading to layoffs, Solihin acknowledged the shutdowns were due to violations of distance regulations.

‘The stores were closed because of distance rule violations. That’s it. I sent a letter. When closed, where do the employees go? We conveyed our concerns to the regent and the regional legislature,’ he explained.

He said some of the disputed stores had already commenced operations and employed staff, so the temporary solution was to reopen them gradually while awaiting relocation once leases expire.

‘What we did was, the stores had already leased the premises and were operating with staff. If the lease ends and they’re deemed non-compliant, we’ll relocate. That’s the gist of it,’ he added.

‘With the letter and the feedback from the regent and regional legislature, it was decided to reopen gradually to prevent unemployment,’ Solihin continued.

He hopes similar issues do not recur in the future.

‘Going forward, such violations should not happen again,’ he said.