Licensing for Building Plant Outside Industrial Zone Still Difficult


The Investment Coordinating Board (BKPM) keeps pursuing their goal to attract more foreign investors into Indonesia to build the manufacturing plants. However BKPM still received many complaints from investors who want to invest in Indonesia, especially related to the availability of land outside the industrial estates.

Deputy for Investment Implementation Control of BKPM, Azhar Lubis, said the board has also recorded some problems associated to business licensing. A total of 92 issues have been under reviewed by BKPM.

“We are always ready to accommodate and solve any problem; there are 92 problems we handling right now, incidentally nobody reports a problem in the pharmacy sector. It means the pharmacy industry is running well or maybe there is a problem but not reporter,” said Azhar Lubis, in his office, South Jakarta, on Thursday (3/11).

Out of the 92 problems, 19 are related with the projects of public private partnership. There are 76 non-PPP projects with problems of which 43 have been completed and 33 others are still in progress.

Most of the problems are associated with the shareholders, the commitments of regional authority in some regions, and including the land clearance. From the 33 projects, 20 projects out of them have been given the principle license, and the other 13 haven’t been yet due to the problems associated to the land clearance since the land plots are not designed for industrial areas.

“Some of the problems are because they bought the land plots before getting permit, usually buying a plot of land in the farming area due to the low price, without knowing that it cannot be used for building a manufacturing plant, so the license cannot be processed,” Azhar said.

He added BKPM would keep trying to facilitate and cooperate with the local government or the relevant stakeholders to provide the solution. According to him, revising the rules of local government would take time, so the investors are advised to build their manufacturing plants in the nearby industrial estate.

“So the investors who want to build a factory, they should seek the location in an industrial estate or in an area allocated for industry,” said Azhar.