Manufacturers Obliged to Relocate to Special Regions
Wednesday, 13 September, 2006 | 14:52 WIB

Tempo Interactive, Jakarta: The government will oblige manufacturers to move into special regions and this policy will be attached to a governmental regulation that will soon be legalized.

Agus Tjahajana, Secretary General of the Department of Industry, said that after the regulation is legalized, every manufacturer will be given three to 10 years in which to relocating their business to special regions throughout Indonesia.

“The governmental regulation draft is now examined by the Department of Justice and Human Rights,” Agus told reporters yesterday (12/9).

The draft, according to him, is a replacement regulation for Presidential Decree Number 41/1996 concerning Industrial Region Management.

The new regulation will also arrange administrative sanctions such as removal of business licenses if they do not relocate to industrial regions.

As regards established companies, the period for relocation will be 10 years at the longest after their building rights expire.

Whereas, a new company will be given three years at the longest after the regulation is legalized.

He has explained that the policy is intended to straighten out industrial zones in Indonesia.

“We want each region to have well-organized industries. This will include facilitation of all issues such as administration matters.”

Another consideration is that of the major role of the special regions in supporting the performance of industries.

Last year, non-oil and natural gas exports from the special regions contributed US$46.9 billion, equivalent to 70.64 percent of total national non-oil and natural gas exports.

The government will in turn grant several facilities including administrative incentives such as one-stop investment services and fiscal incentives such as tax allowances.

The government will also form a special region supervisory agency that will manage price mechanism in these regions.

Fery Firmansyah
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