The operating risk of each business discipline is assessed according to the Indonesian Standard Industrial Classification (KBLI) that was based on health, safety, environment, and other aspects.
By
Kompas Team
·4 minutes read
Kompas
Workers load cement onto a ship at Sunda Kelapa Harbor, Jakarta, Friday (14/2/2020). The government will conduct detailed dissemination of information to people related to the job creation bill, which aims to create jobs so that it can support the country’s economy.
JAKARTA, KOMPAS — After a year since the Job Creation Law was implemented to facilitate business licensing, increase investment, and create jobs, the results have not met the expectations. Business licenses were still being issued without conducting thorough risk analysis as regards the real condition in the regions.
A study by the Regional Autonomy Watch (KPPOD) in December 2021 showed that one year after Law No. 11/2020 on Job Creation and the derivative regulations came into effect, their implementation are still not optimal.
The integrated risk-based licensing system, or Online Single Submission Risk-Based Approach (OSS-RBA), which was created to facilitate the business licensing process was still problematic. It has been found that central-regional policies are not fully developed and synchronized, licensing for certain business sectors is not integrated, and the availability of technology and human resources was limited. Moreover, information dissemination was lacking, which has confused business actors and hindered a smooth licensing process.
To simplify licensing, the Job Creation Law altered the country’s business licensing regime to one that was risk-based.
KPPOD executive director Armand Suparman explained that one of the main issues that had led to unpreparedness in implementing the OSS-RBA system was that business risk analysis had not been mapped out clearly. To simplify licensing, the Job Creation Law altered the country’s business licensing regime to one that was risk-based.
The operating risk of each business discipline is assessed according to the Indonesian Standard Industrial Classification (KBLI) that was based on health, safety, environment, and other aspects. The licensing requirements and process for a business of low to medium risk were easier than that for a high-risk business, which must fulfill the additional requirement of completing and submitting an environmental impact analysis.
According to Armand, the KBLI in determining the category of business sectors on risk-based analysis was not complete in its list of business categories, nor did it reflect the real condition in the regions. The reason was that mapping the risk analysis was managed by the central government in a process that did not involve local governments or local communities.
Kompas
Manpower Minister Ida Fauziyah (third right) poses for a photograph with participants before opening the Coordination Meeting of the Heads of the Provincial Manpower Offices in Indonesia. The meeting discussed the job creation bill in Jakarta on Thursday (20/2/2020).
Granting business licenses in accordance with the real risks in the field was also hampered because many regions did not yet have detailed spatial plans (RDTR). As a result of the poor risk analysis mapping process and an RDTR that was not integrated with the OSS-RBA system, the new business licensing regime could deviate from its function and violate spatial plans.
Businesses in high-risk categories in a particular area might be mislabeled low or medium risk. This threatens environmental sustainability and the local quality of life.
“Right now, the impact might not be visible yet because the business is not yet operating. However, it is just a matter of time before it becomes a problem in future,” Armand said last week.
Local administrations have voiced similar concerns. Parinringi, the head of the Southeast Sulawesi One Stop Investment Service-Investment Office, said that the OSS-RBA system, which had not been unintegrated with the RDTR, had caused frequent delays in processing licenses for business locations.
“This has made people think twice about doing business because the licensing is often constrained, not to mention the environmental impact. In other words, while the funds go to the [central government], we are only left with the problems," he said.
The characteristics of nature and social life in each region were different, so the level of risk cannot be generalized.
According to the deputy chairman Sarman Simanjorang of the Indonesian Chamber of Commerce and Industry, involving the regions in determining the type of business risk was very important to support the implementation of the OSS-RBA system. There needs to be intense communication between the central government and regional administrations, as well as business actors and local communities, on compiling the business risk categories according to the real condition in a region. The characteristics of nature and social life in each region were different, so the level of risk cannot be generalized.
Sarman expressed the hope that these various problems could be rectified through the Job Creation Law revision, in accordance with the Constitutional Court ruling.
Kompas
President Joko Widodo leads a limited meeting on the draft omnibus bill on job creation at the Presidential Office in Jakarta, Wednesday (15/1/2020).
"Because, if one day there is waste pollution, the environment is damaged, the community is affected, it's the regions that have to deal with it, not the central government. Moreover, the business licenses that have been taken over by the central government, such as mining, are among the high-risk businesses," said Sarman. (AGE/JAL/CIP/ERK)
