Investment bill passed by House

Andi Haswidi, The Jakarta Post, Jakarta

The House of Representatives finally endorsed the long awaited Investment Law on Thursday amid a walk-out by legislators of one of the main political parties, and noisy protests from non-governmental organizations.

Members from the Indonesian Democratic Party of Struggle (PDI-P) walked out of the plenary meeting, refusing to vote for the bill due to its objection to the longer duration of land titles under the bill.

"We are requesting the postponement of the endorsement of the bill so that the legal basis for land titles can be reexamined," said Aria Bima, speaking on behalf of the PDI-P faction.

The faction argues that Article 22 of the new law, which extends land-usage rights to 95 years from 60 years, conflicts with article 29 of the 1960 Land Law.

"Let us not sacrifice the people's sovereignty. Please allow us not to be included in the approval process," he said.

The faction's stance was supported by another faction, the National Awakening Party (PKB), which fears the longer land title periods will only benefit big investors, especially foreign ones, and hurt farmers.

Some 700 people from various left-wing and nationalist-leaning non-governmental organizations had been gathered since morning outside the House complex to protest against the passage of the law, saying that it would only strengthen what they termed "neocolonialism".

"Allowing land cultivation rights of 95 years is the same thing as giving this country to other people, which means only the third generation will be able to enjoy the land," said Maria Ulfah Anshar representing the PKB faction during the plenary session.

The protests led to the postponement of the plenary session as House Deputy Speaker Muhaimin Iskandar, who chaired the session, suspended it to allow him to consult with both the PDI-P and PKB leaders.

This meeting lasted 10 minutes, but produced no shifts in stances, and was followed by all the members of the PDI-P faction walking out of the hall. The PKB chose to remain but refused to be held accountable for the consequences of the law's approval.

Disregarding the stances of the two factions, whose seats account for less than one-third of the total number of seats, the other eight factions went ahead with the endorsement of the bill. This was followed by loud cheer, marking the end of about 10 months of deliberation since the bill was first presented to the House in June.

Responding to the two protests of the two dissenting factions, Didik J. Rachbini, the chairman of House Commission VI, which deliberated the bill, said the bill had been approved and was supported by the representatives of all of the factions during the deliberation process, without ever having to go to a vote.

"I would call on the public not to be fooled by unnecessary and sensationalistic political maneuvering," he said.

In addition to the longer duration of land rights, the Investment Law provides for the equal treatment of local and foreign investors, and more attractive investment incentives. It also gives more support to small and medium enterprises.

Investors eligible to receive incentives include those who invest in labor-intensive industries and in infrastructure projects, in projects that promote the transfer of technology, in pioneering industries, in rural areas, in projects that involve scientific research and innovation, partnerships with small and medium enterprises, in projects that use local production capital, and in environmentally friendly projects.

The new law also elevates the status of the Investment Coordinating Board (BKPM), which currently operates under the control of the Trade Ministry, to that of a non-departmental government institution that reports directly to the President.
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