BKPM to Asses Business Implementation Performance in Central and Local Governments


BKPM organized the Dissemination of the Performance Appraisals on One-Stop Service (PTSP) and Accelerating Business Implementation for Central (Ministries/Institutions) and Local Governments in Medan, North Sumatra on Thursday, 18 March 2021. This activity aimed to follow up the mandate of Presidential Regulation (Perpres) No. 42 of 2020 concerning the Giving of Awards and/or Imposition of Sanctions to the Ministries/Institutions and Local Governments. The event was carried out through a hybrid method of online and face-to-face with the Heads and representatives of the One-Stop Investment and Integrated Services Service (DPMPTSP) Provinces, Cities/Regencies in Sumatra, as well as association and company representatives.

Deputy for Investment Cooperation Riyatno explained that based on Presidential Decree Number 42/2020 article 17, the Chairman of BKPM has the mandate to lead an assessment team consisting of elements from BKPM, the Coordinating Ministry for Economic Affairs, the Ministry of Home Affairs, the Ministry of Finance, related ministries/institutions, and professionals. Around 18 ministries/institutions including BKPM will be assessed based on the performance of accelerating business implementation, while local governments

will be assessed based on the performance of PTSP and business implementation. The performance appraisal is not only being executed in the regions, but also at the central level which provides and encourages the development of business licenses procedures.

Performance appraisal is not a new thing to BKPM. The last appraisal was carried out in 2018. However, based on Presidential Decree 42/2020, the assessment will be carried out in 2021 and then carried out regularly every year.

The assessment mechanism is carried out through supervision using the Online Single Submission (OSS) system. The central government will be coordinated by BKPM, the Provincial Government will be coordinated by the Provincial DPMPTSP, while the Regency/City Government will be coordinated by the Regency/City DPMPTSP. The assessment process starts in mid-April 2021 and ends in June 2021. In August 2021, the Chairman of BKPM will hand the assessment results to the Minister of Finance and use them as a consideration in granting incentives/sanctions to central and local governments in 2022.

The performance appraisal has three categories: ‘Very Good’ with score of 80 to 100, ‘Good’ with a score of 60 to 79.99 and ‘Not Good’ with a score below 59.99. If the assesses get a ‘Very Good’ score, they can be proposed to get awards in the form of certificates/trophies, media publications, budget incentives for Ministries/Institutions, and Regional Incentive Funds (DID) for Local Governments. Conversely, if they fall under the ‘Not Good’ category, the Local Governments will be imposed administrative sanctions for postponement of the General Allocation Fund (DAU) or Revenue Sharing Fund (DBH). Meanwhile, Ministries/Agencies will accept written warnings, negative media publications and budget disincentives. If the assesses are in the ‘Good’ category, they will not get either award or sanction.

Representing the Governor of North Sumatra Province, Head of DPMPTSP North Sumatra Province Effendy Pohan expressed his appreciation for the cooperation and trust given by BKPM to the North Sumatra provincial government as the first host in dissemination series held by BKPM. BKPM plans to carry out the dissemination series on five cities starting in Medan, then Solo, Makassar, Bali and Jayapura.

The performance appraisal targets to improve business implementation climate and public service quality in the regions. The improvements will eventually lead to an increase in the global Ease of Doing Business (EODB) ranking. (*)