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Lack of commitment, synergy hinders OSS licensing system
Despite its ability to speed up the process of obtaining business licenses, the centralized online submission system launched by the government last year has yet to be optimally implemented as sectoral ego remains a hindrance
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span>Despite its ability to speed up the process of obtaining business licenses, the centralized online submission system launched by the government last year has yet to be optimally implemented as sectoral ego remains a hindrance.
A study by Regional Autonomy Watch (KPPOD) revealed a lack of commitment, especially from regional administrations, in adopting the online single submission (OSS) system as each administration has already implemented its own application-based business licensing system that has not been integrated into the OSS
system.
KPPOD researcher Boedi Rheza said on Sep. 11 that only a few of those regional administrations had issued business licenses, which comprised business opening license and operational license, through the OSS system even though these types of license should be issued through the OSS system as stipulated in Government Regulation No. 24/2018.
“Most administrations only use the OSS system to issue NIBs [business registration numbers],” he said at a discussion in Jakarta.
The study was conducted in 11 city and regency administrations in six provinces in Indonesia, namely Jakarta, North Sumatra (Deli Serdang and Toba-Samosir), West Kalimantan (Pontianak and Kubu Raya), East Java (Surabaya and Sidoarjo), West Nusa Tenggara (Mataram and Central Lombok) and South Sulawesi (Makassar and Maros).
The OSS system, which electronically integrates business licensing services, was officially launched in July 2018 and applies to all government offices throughout the country. In addition to the existing One Stop Integrated Licensing (PTSP), businessmen or residents can apply for permits not only to set up business but also to build a house through the online system.
The OSS system is part of series of deregulatory measures and incentives implemented by President Joko ”Jokowi” Widodo’s administration to improve ease of doing business in the country.
However, many foreign investors are not really impressed with such regulatory reforms and incentives because they are not fully implemented.
According to the Joint European Chambers’ 2019 Business Confidence Index (BCI), regulatory environment and bureaucratic inefficiency remain the top two investment challenges in Indonesia.
Within the central government, the OSS system has yet to be fully integrated with licensing systems in each institution, Boedi added.
KPPOD executive director Robert Endi Jaweng said the problem was in the norms, standards, procedures and criteria (NSPKs) within the respective institutions as technical guidance for business licensing. “They [NSPKs] are not clearly elaborated in the government regulation on the OSS system,” he said. Therefore, regional administrations have their own standard operating procedures in the issuance of business licenses.
Despite acknowledging that the OSS system was ideal for ease-of-doing-business, Boedi said the problems needed to be tackled. The first was to tidy up the overlapping procedures in the central government so that the regional administrations could formulate the regional regulation.
“We found that regional administrations are still reluctant to fully implement [the OSS system] if there is still an overlapping authority at the higher level,” he said.
Synergy between the regional and central government is needed to make the OSS system successful, Boedi added.
“There should be a commitment from the regional administrators to walk alongside the central government,” Boedi told reporters, adding that such a commitment was important to make such a policy become well-implemented. “It has to be clear regarding the right of each institution in the issuance of licenses,” he said.
Indonesian Employers Association (Apindo) chairman Hariyadi Sukamdani acknowledged that there were sectoral egos among government institutions. Businesspeople were hindered by the fact that they still had to go to every related institution to process a license despite the implementation of the OSS system.
“We cannot force something to be implemented if it is not ready,” he told The Jakarta Post on Monday over the phone, adding that it could hold up other processes.
Despite the unsatisfying result from the first year of implementation, the Investment Coordinating Board (BKPM) as the implementer of the OSS system is still upbeat about it.
“Only a few regions have not implemented the OSS system. I assume it has reached 90 percent, but we need more data about it,” Husen Maulana, the BKPM’s deputy of investment services told the Post on Monday over the phone. In the future, the BKPM will also integrate all types of business licensing into the OSS system. (asp)
