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Mayor’s appointment as BP Batam’s head gets mixed reactions
The Batam Indonesia Free Trade Zone has seemingly been freed from bureaucratic limbo since Batam Mayor Muhammad Rudi was appointed the ex-officio head of the Batam Indonesia Free Trade Zone Authority (BP Batam) earlier this year as part of an effort to abolish dualistic authority on the island
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span>The Batam Indonesia Free Trade Zone has seemingly been freed from bureaucratic limbo since Batam Mayor Muhammad Rudi was appointed the ex-officio head of the Batam Indonesia Free Trade Zone Authority (BP Batam) earlier this year as part of an effort to abolish dualistic authority on the island.
Despite the much-lauded move, however, industry stakeholders expressed skepticism regarding the mayor’s ability to regulate investment in Batam, which has remained in the central government’s domain.
The Indonesian Chamber of Commerce and Industry (Kadin) chairman in Riau, Makruf Maulana, said he was upset with the government’s decision to appoint the Batam mayor to be the ex-officio head of BP Batam.
“We believe the decision was premature at best and loaded with vested political interests at worst. BP Batam should have remained under the control of industry professionals who are more than capable of improving the region’s competitive edge to attract more investments,” Makruf told The Jakarta Post last Friday.
He said he was worried that export and import regulations in BP Batam would end up being at the whim of the government now that the Batam mayor was the ex-officio head.
“A regional head’s capacity to go on overseas business trips is limited because of Home Affairs Ministry restrictions. How can the Batam mayor, who now also serves as the BP Batam head, lobby foreign investors if he’s unable to travel abroad frequently?” Makruf added.
He said the Kadin in Riau and the Batam administration had agreed to reevaluate the government’s decision to put the mayor in charge of BP Batam on legal grounds before they went on to file a lawsuit.
“We’d like BP Batam to be led by a business professional so that the resulting policies will be more supportive of the industry,” he said, adding that he hoped the government would issue a regulation on work relations between BP Batam and the Batam municipality based on Law No. 53/1999 on the establishment of the city of Batam.
Meanwhile, the general manager of Batam’s Batamindo Industrial Park, Mook Sooi Wah, said the government’s decision to appoint the Batam mayor the ex-officio head of BP Batam was the right solution to the dualistic authority on the island, which had often confused investors.
“The most important thing to consider is, above all, reassurance for investors. It doesn’t matter whether [BP Batam] is led by a mayor. Whoever is in charge of BP Batam, they have to be aware of the island’s strengths,” Mook said.
He said many foreign investors had faced legal uncertainty and malleable regulations in doing business in Batam.
“We remain optimistic that the Batam mayor will be able to map out and solve the legal problems plaguing the region’s investment climate. [The mayor] is a native who truly knows the roots of the problems. I expect him to establish a highly-skilled team that will then solve various issues, such as port infrastructure and logistics,” Mook said.
As many as 71 manufacturing companies from various countries currently operate with a total of about 80,000 workers in the Batamindo Industrial Park. In addition, there are eight more companies that have recently invested in the industrial park s a result of the ongoing trade war between the United States and China.
“Batam should have been the destination for investors affected by the trade war. However, because of the negative word-of-mouth regarding Batam among investors, the island remains relatively unpopular,” Mook said.
In response to industry feedback, Rudi said he was determined to make the best of the four-month deadline the Coordinating Economic Minister Darmin Nasution had given him to streamline existing regulations and permits in an effort to lure more investors.
“Our primary focus at the moment is to improve the Batu Ampar Port,” said the Batam mayor. “We strive to do our best to make it easier for foreign companies to make investments in Batam by streamlining and eliminating complicated regulations and permits.”
Rudi said he was also assigned by Darmin to complete the Aircraft Maintenance Repair and Overhaul (MRO) Special Economic Zones (KEK) at the Hang Nadim International Airport and the Nongsa Digital Park KEK in Batam this month.
“There are two KEKs that must be completed this month. We want more KEKs to propose such facilities considering the government incentives,” Rudi said. (rfa)
