Novy Lumanauw, Triyan Pangastuti, Jakarta – Indonesia has launched a risk-based online single submission system for business licensing on Monday, a long-delayed milestone that the government had hoped would improve the ideas of doing business in the country and boost investment.
"Business licensing that is integrated, fast, and simple, determine our competitiveness to attract investment," President Joko "Jokowi," Widodo said during an inauguration event for the Risk-Based Online Single Submission (OSS) System at the Ministry of Investment and Investment Coordinating Board (BKPM) office in Jakarta on Monday.
The largest economy in Southeast Asia has been doing single submission for new business licensing for several years now.
Still, old laws required the businesses to get a certain permit from various ministries and regional governments even if the permit may be superfluous compared to the nature of the business. That inevitably clogged the licensing process.
To address this problem, the government includes an article in the 2020 Law about Job Creation that allows some low-risk businesses to get instant approval. The business would need to obtain more permits in line with their perceived impacts on people living in their surroundings or the environment.
Jokowi said the new risk-based OSS system provides service standards for all levels of government that issue permits at the central and regional levels. The system defined clearer responsibilities of the licensee and made licensing services more integrated, Jokowi said.
"I also want to emphasize that risk-based OSS services are not meant to castrate local authority," the president said.
The World Bank's "Ease of Doing Business 2020" report ranked Indonesia at 73rd place out of 190 countries regarding ease of doing business. That was a result of drastic improvements since 2015, when the country only ranked 103rd. But reform had stagnated in the past two years, making Jokowi missed its 40th place target by the end of his first term.
BKPM data showed domestic and foreign direct investments in Indonesia grew 10 percent reached Rp 443 trillion ($30 billion) in the first six months this year compared to the same period last year.
Minister of Investment and the Head of BKPM Bahlil Lahadalia said the new risk-based OSS system could link investors with ministries or agencies, local governments, administrators of special economic zones (KEK), and the Free Port Free Trade Zone (KPBPB).
The OSS system can accommodate licensing process for 1,702 kinds of businesses, including 1,349 already registered in the Indonesian Standard Classifications of Business (KBLI), which have been implemented in the risk-based OSS system, minister said.
Bahlil lauded Indosat Ooredoo, one of Indonesia's largest telecommunication companies, to help the investment ministry develop the online system.
"We have to say that Indosat is doing this. It's not your average company. If there is a problem, Indosat and us will be responsible," Bahlil said.