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Licensing still a hassle: Study
Business licensing processes remain lengthy and complicated in Indonesiaâs major cities, despite the launch of a one-stop service program to process business permits more speedily
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Business licensing processes remain lengthy and complicated in Indonesia's major cities, despite the launch of a one-stop service program to process business permits more speedily.
According to a study carried out by the Asian Development Bank (ADB) and Regional Autonomy Watch (KPPOD) in five business cities in 2014, Jakarta and Surabaya were the worst at handling business licensing applications, ranking lower than Makassar, Balikpapan and Medan.
KPPOD executive director Robert Endi Jaweng said the survey indicated that licensing processes were still hampered by inefficiency. 'The most difficult cities were Jakarta and Surabaya, which represent Indonesia at the global level,' Robert said in a discussion in Jakarta on Monday, citing the World Bank's Doing Business report, where Jakarta and Surabaya represented the whole of the country.
The study, which was conducted from February to December 2014 but was updated until May 2015, examined the implementation of licensing and regulation reforms in the country.
The government had promised to ease business practices, with then vice president Boediono announcing a policy package consisting of 17 initiatives to improve the investment climate in 2013. President Joko 'Jokowi' Widodo then launched the one-stop integrated service (PTSP) in January this year. The Investment Coordinating Board (BKPM) has since taken over the issuance of 134 permits from 22 ministries and agencies.
However, according to the study, anyone starting a business in Jakarta had to go through 10 different procedures over 48 days, while in Surabaya, there were nine procedures that took 27 days to finish. Makassar required 25 days and eight procedures.
Company registration certificates (TDP) and permanent business trading licenses (SIUP), which according to Trade Ministry regulations should be issued simultaneously in three days by the PTSP, took 14 days in Jakarta and were issued by separate agencies in Surabaya after seven days.
'Surabaya needs special attentions. It's the sole remaining city that doesn't have a one-stop service office. People still need to go to a number of agencies to process their licenses,' Robert said, adding that lengthy procedures were also more vulnerable to corruption.
Surabaya does have the One-Roof Integrated Service (UPTSA) and the Surabaya Single Window, which boasts of transparency in permit-issuance, but the processing and signing of permits was still scattered across state agencies, the research noted.
The study also indicated that the Jakarta and Surabaya authorities had yet to transfer authority for the issuance of building construction permits (IMB) to the PTSP, resulting in further delays.
Robert also questioned Jakarta's commitment to providing one-day services (ODS), as Jakarta Governor Basuki 'Ahok' Tjahaja promised this month.
Meanwhile, Jakarta PTSP head Edy Junaedi Harahap slammed the report's data, calling it 'outdated' and 'inaccurate'. 'Since the launch of the PTSP in January, there have been a lot of improvements. Business trading licenses can be processed in one day,' Edy said, adding that every PTSP branch had an ODS booth.
He insisted that all permits from all city administration units had been transferred to the PTSP, although some 'moderate' and 'heavy' permits would require cooperation with related agencies.
'The regional government is even more progressive than the central government. We in Jakarta have cut SIUJK [construction services business permit] issuance to one day compared with the 10-day maximum imposed by the central government,' he said.
Overlapping bureaucracy at the regional level has been blamed for the World Bank ranking the country 114th out of 189 countries in its 2015 Doing Business report.
Indonesia was ranked 155th for starting businesses and 153rd for dealing with construction permits.
The country is aiming for a total of Rp 519.5 trillion (US$37 billion) in realized foreign and domestic direct investment this year. (fsu)
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