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Jakarta Post

Industrial zones, firms get extra protection

  • Tama Salim

    The Jakarta Post

Jakarta   /   Thu, September 4, 2014   /  08:32 am

The Industry Ministry, in collaboration with the National Police, will provide extra security protection to 49 companies and 14 industrial estates that are considered to be vital national installations.

The extra level of security protection would be given to industrial estates and companies depending on the scale of investments they receive, their sizes and the numbers of their employees.

'€œThe industry that drives the economy has a strategic role as it had contributed 21 percent of GDP [gross domestic product] in the last 5 years with an average growth rate of 6 percent per annum,'€ Industry Minister MS Hidayat said on Tuesday. By giving extra security protection, the minister said, it would hopefully make Indonesia more attractive to investors.

This year, the companies that receive vital installation (OVNI) certification are found in various sectors, such as cooking oil and crude palm oil manufacturer PT Smart, petrochemical specialist PT Chandra Asri Petrochemical, pulp and paper producer PT Indah Kiat Pulp and Paper and wheat flour producer PT Indofood Sukses Makmur.

Overall, there are 14 industrial sectors that would be guaranteed extra protection, as stipulated in the industry minister'€™s Decree No. 620/2012 on industrial sector vital installations: raw materials for explosives, aviation, salt, sugar, paper and pulp, metal, cooking oil and palm oil, shipbuilding, petrochemicals, fertilizer, cement, telecommunications, flour and industrial estates.

In addition, the industrial zones that get extra protection are state-owned PT Kawasan Berikat Nusantara in North and East Jakarta, as well as Batam-based industrial estates PT Batamindo Investment Cakrawala and the Kabil Integrated Industrial Estate in the Riau Islands province, among others.

Mired in problems related to labor disputes and protracted licensing process, Batam has seen declining investments and slow growth in the last three years.

A source at the ministry said companies and industrial zones can apply for the vital installation status, which would be determined through a verification process conducted by an independent team consisting of government and police officials.

Article 1 paragraph 1 of Presidential Decree (Keppres) No. 63/2004 on safeguarding national vital installations stipulates that a zone, building or business can be designated as a national vital installation if any threats leveled against it could lead to dire consequences for development, chaos in the transportation and communications sector or the disruption of state governance.

Indonesian Industrial Estate Association chairman Sanny Iskandar said the industrial estate developers were upbeat about the security services that would come with the OVNI certification.

'€œAs developers, we welcome the certification and the security [services]. We hope the certification would be followed with the issuance of a standard security procedure,'€ Sanny said.

Sanny said he hoped the police officers at the regional level would follow the directives from the National Police regarding the security protection given to vital installations.

Sanny, who is also PT Maligi Permata Industrial Estate'€™s president director and co-manages the OVNI-certified Karawang International Industrial City, said that investors have been complaining about worker protests, often organized by labor unions, NGOs and other parties, that impose their will on the companies.

Furthermore, he said that some industrial estate developers were wary of facing excessive policing and illegal levies if they were considered to be vital installations. '€œNothing is free. By designating industrial estates as vital installations, the National Police are surely going to dictate the kinds of facilities that need to be set up,'€ Sanny surmised.

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