Online Licensing Still Faces Hurdles

The Jakarta Post - March Tuesday 14, 2018

Online Licensing Still Faces Hurdles

The government may have shown improvement in cutting the long process of applying for business permits through a single licensing system, yet experts say it has come up short in reducing unnecessary regulations that of­ten discourage investors.

The impending implementa­tion of the online single submis­sion (OSS) system for business permits is a step in the right di­rection as it would help reduce bureaucratic hurdles, but further deregulation is needed, said Rob­ert Endi Jaweng, executive direc­tor of Regional Autonomy Watch (KPPOD).

“For me, this is a progressive step from the central govern­ment, but it is only one part of li­censing reform,” Robert told The Jakarta Post on Monday.

He said the amount and types of licenses and permits should be reduced to a more reasonable lev­el as the regions had yet to carry out relevant reforms.

A case in point is Jakarta, which has 300 different business permit types, while Central Kalimantan has 181, One region, Robert said, has as many as 518.

“The central government doesn’t even have a complete list of the different permits in each region,” he said. “It is still making an inventory of them.”

The OSS is expected to enable investors to submit related doc­uments required in business li­cense applications through an in­tegrated online system.

The system, slated for launch in April, will be supervised and processed by several taskforces at central, regional and local gov­ernment levels, as part of a presi­dential decree called the 16th eco­nomic reform package.

Licensing for cooperatives will also be integrated in the system, taking it away from the juris­diction of the Cooperatives and Small and Medium Enterprises Ministry.

“All applications for permits will go through the OSS, including for cooperative licensing, which will move to the Law and Human Rights Ministry,” Cooperatives and Small and Medium Enter­prises Minister Anak Agung Gede Ngurah Puspayoga said after a meeting on Monday.

Puspayoga said his ministry would remain in charge of guid­ing and developing cooperatives.

Improving Indonesia’s ease of doing business and thus mak­ing it more attractive to interna­tional investors has been among President Joko “Jokowi” Widodo’s priorities.

As the government set an in­vestment realization target of Rp 765 trillion (US$ 55.7 billion) this year, Investment Coordinat­ing Board head Thomas Lembong said he hoped the OSS would eliminate sectorial ego, in which agencies only deal with matters related to its authority.

However, based on the latest data from the Office of the Coor­dinating Economic Minister, four provinces and 301 regencies and municipalities have yet to form the taskforces required for the es­tablishment of the OSS.

Coordinating Economic Min­ister Darmin Nasution is sched­uled to meet 440 regional heads on Wednesday to discuss the im­plementation of the OSS.

Robert of the KPPOD said even the regions that had formed taskforces were not necessarily ready to effectively implement the system.

“That data is taken from reports. What we see in the field is very different,” he said, cit­ing his observations on recent trips to Kupang, East Nusa Teng­gara and Palangka Raya, Central Kalimantan.

Robert stood by his opinion that the government should en­sure that deregulation should be carried out in parallel with the OSS as “investors and busi­ness people are allergic to uncertainty”.

“Right now, it is very difficult to predict regulations from region to region,” he said. “In tourism, for example, it is hard for a com­pany to plan everything from the entrance to the exit point because of the variation.”

He acknowledged, however, that meaningful deregulation re­quired strong political will that might be lacking in many regions, saying that “deregulation is a re­flection of the attitudes of region­al leaders”.

“If they are truly committed to attracting investment, they will work on it seriously. However, if they are only looking at the next five years, then they will keep adding hurdles to increase re­gional revenue.” (kmt)


--- (The Jakarta Post – Tuesday, 27 March 2018) ---

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