Investors in oil, gas, mineral and coal mining sectors are expected to experience an easier and faster business licensing process as some of the permits will be processed under the Investment Coordinating Board’s (BKPM) one-stop service.
Energy and Mineral Resources Minister Sudirman Said on Thursday that he had officially handed the procurement process of 10 out of 42 permits in oil and gas sector and 11 others in mineral and coal mining fields over to BKPM’s one-stop integrated services (PTSP). The new scheme is effective immediately.
This is part of President Joko “Jokowi” Widodo’s administration’s efforts to streamline business permits in the country to attract investment and bolster growth in Southeast Asia’s largest economy, which in the past few quarters has experienced the lowest growth since 2009.
By October, all oil and gas permits are expected to be streamlined into BKPM’s one-stop service, of which 20 will be done by Sept. 1 and the remaining 12 on Oct. 1.
“We wish to conclude the hand-over process in October, which is two months earlier than the December deadline as mandated by Presidential Instruction 4/2015,” Sudirman said during a press briefing after the first hand-over ceremony at the BKPM office in Central Jakarta.
The ten permits handed over to BKPM from the Energy and Mineral Resources Ministry on Wednesday include business licenses for oil and natural gas processing, oil and fuel export recommendations and liquefied natural gas (LNG) storing licenses.
The mineral and coal mining permits that had been handed over included mining exploration licenses, production mining licenses and their renewals and mining services licenses and their renewals.
The ministry claimed to have cut more than 60 percent of bureaucracy in permit procurement — from 222 licenses to 94 — during the last six months, with hopes of simplifying procedures and encouraging a conducive investment climate, Sudirman said.
BKPM head Franky Sibarani said that he appreciated steps taken by the ministry, saying the simplification would ease the workload of the PTSP and reduce the stress of prospective investors. However, he could not detail the new time length of permit procurement.
“I need to check the time line of each permit first then calculate it, but I’m sure the changes are significant,” he said, giving the electricity sector license simplification as an example.
Previously, the government simplified electricity sector permits from 49 pieces to 25, for which permits could be procured in approximately 256 days, down dramatically from the previous 923 days.
The number of permits issued by the BKPM doubled in the first half of this year from the same period a year ago, while their value soared almost 10 times to Rp 308.45 trillion (US$22.35 billion) from Rp 28.99 trillion, according to BKPM data.
The BKPM’s one-stop service was established in January this year as a response to President Jokowi’s instruction to create a business-friendly investment climate by eliminating costly red tape for entrepreneurs and investors.
The PTSP has taken over 134 permits from 22 ministries and institutions, including the Food and Drug Monitoring Agency (BPOM) and National Standardization Agency (BSN). These permits include some of those that have often been stumbling blocks for investment, such as land-use permits and environmental impact analysis permits from the Environment and Forestry Ministry.(TheJakartaPost/Azw)