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PRESIDENTIAL REGULATION NUMBER 3 OF 2016: EASE FOR PRIVATE COMPANIES IN STRATEGIC NATIONAL PROJECTS

Requirements which must be met by operators of strategic national projects have now been eased through Presidential Regulation Number 3 of 2016 regarding Acceleration of Strategic National Projects Implementation (Presidential Regulation 3/2016). A strategic national project is a project carried out by the government, a local government, and/ or a business entity which is strategic in nature and has the objectives of promoting growth and ensuring equal development for the purpose of promoting people’s welfare and regional development.

Actually, it is not uncommon for investors or a private fund to be involved in a governmental infrastructure development project. However, sluggish licensing, encumbering bureaucracy and illegal fees in the form of unofficial imposts (pungli) have all been major deterrents for the private sector. Through the promulgation of Presidential Regulation 3/2016 on 8 January 2016, business entities are facilitated and even guaranteed to be able to smoothly arrange their licensing and nonlicensing affairs, including fiscal, data and information facilities.

Applications for licensing and non-licensing affairs can be submitted to the center for one-stop integrated service (PTPSP) at the Capital Market Coordinating Board (BKPM). The most important point of Presidential Regulation 3/2016 is that the implementers of strategic national projects no longer have to be concerned over potential crime of power abuse by certain individuals in strategic national projects. The Presidential Regulation 3/2016 among other provides that every report to the Attorney General’s Office or the Indonesian Police concerning strategic national projects will be forwarded to relevant agencies for due internal process by the government’s internal supervisory instrument by prioritizing administration process.

In addition, project operators, especially private business entities, will obtain a guarantee from the government for strategic national projects. The guarantee includes policies which are taken or not taken by the central government which hamper the strategic national projects.

-MSB-