Interview Session with Deputy Chairman for Investment Services BKPM

The integrated investment licensing system service, or known as the Online Single Submission (OSS), has officially transferred to the Indonesia Investment Coordinating Board (BKPM) office starting on January 2, 2019. In this occasion, the Deputy Chairman for Investment Service, Husen Maulana, conveyed his explanation regarding the implementation of the OSS system at BKPM.

Husen Maulana, S.IP., M.Sc. was born on July 18, 1969, and inaugurated as the Deputy Chairman for Investment Services BKPM in November 2018. He has held several positions in BKPM including the Deputy Director of Cooperation (2009), Chief Officer at IIPC Tokyo (2011), Deputy Director of Promotion (2013), Director of Regional Promotion Facilitation (2016), and Director of Application Services (2018).

Nowadays, almost all investors, both foreign and domestic, have heard about the new innovation of OSS service in Indonesia’s licensing system. Can you briefly explain about this service in detail?

The Online Single Submission, which is known as OSS, is stipulated by the Government Regulation (PP) No. 24 Year of 2018 and has been effective since June 21, 2018. This PP regulates that business licenses for sectors listed in its attachment must be processed through the system. Basically, the main purpose of stipulating OSS system is to integrate, expedite, simplify, harmonize and standardize business license process and procedures in Indonesia. It is expected to increase investment realization in the country.

OSS system issues business licenses based on investor’s commitment, namely commitment to fulfill all requirements for location permit, building permit, environmental permit, as well as paying regional retribution if any. Once investors access the OSS system, the system will issue :

  1. Nomor Induk Berusaha (NIB) or Single Business Identity Number. NIB also applies as Company Registration (Tanda Daftar Perusahaan/TDP), Import Identification Number (Angka Pengenal Impor/API), and customs access.
  2. Investment License and;
  3. Operational/Commercial License.

After obtaining NIB, business license and operational/commercial license, investors should then fulfill their commitments by completing the requirements of location permit, building permit including Certificate of Building Feasibility (Sertifikat Laik Fungsi/SLF), and environmental permit to related regional government in the project’s location.

The PP also regulates the time limit for investors to fulfill their commitments. For example, within 10 days after receiving location permit from OSS, investors should complete the requirements to regional government, otherwise, the location permit which has been issued by OSS will automatically become invalid. On the other side, also within 10 days, the regional land office also has to process and confirm whether the requirements from investors are approved or rejected, otherwise, location permit will automatically become approved and effective.

What are the stages of the OSS service transition from Coordinating Ministry for Economic Affairs to BKPM, and how is the preparedness so far?

As you may know, since OSS system is applied on June 21, 2018, the management of OSS system is handled by the Coordinating Ministry of Economic Affairs while BKPM is preparing to host the system. Then, based on the result of coordination meeting between Coordinating Ministry and BKPM last November and December 2018, we agreed that the authority to manage OSS system will be handed over to BKPM in two stages, namely :

  1. The authority of OSS consulting services will be handed over to BKPM on January 2, 2019. It is running well so far.
  2. The authority to manage the development and maintenance of the system, its network, and hardware as well as other related activities, will be handed over on March 1, 2019.

To ensure that the transfer OSS system to BKPM run well, BKPM and Coordinating Ministry has intensively discussed all steps required, including preparation of mitigation strategies to reduce the risk which may happen or appear during the transition period.

Although the licensing operation service has been moved back to BKPM, some current policy aspects would still be handled by Coordinating Ministry for Economic Affairs such as regulations between ministries and institutions (omnibus law), business aspects, case settlements, and integration with the regional governments. What are the steps taken to ensure the investment licensing service continuous optimally?

First, regarding the OSS consultation services at BKPM, we would like to inform you that BKPM and Coordinating Ministry evaluate regularly to ensure it run well. Not only about providing consultation services in the front office, but also answering emails and calls in the call center at BKPM.

Second, we aware that as a new system, there are still challenges in implementing OSS. For instance, the willingness of several regional governments to use OSS as the only system to issue a business license is also needed to be encouraged. To address this challenge, BKPM and Coordinating Ministry intensively promote the system to regional governments to explain the government regulation and the benefits of OSS system.

Third, there are Norm, Standard, Procedure, and Criteria (NSPK) of several ministries and institutions which still need to be simplified, clarified, and made more transparent to meet the spirit of Government Regulation No. 24 Year of 2018. We are now in the process of evaluating those NSPK with Coordinating Ministry for Economic Affairs.

How is the progress of OSS system integration between the central and regional governments so far?

The regional governments have the obligation to facilitate investors to fulfill their commitments, such as location permit, building permit, and environmental permit. Of course, we need to provide an integrated system in OSS for allowing regional governments to do so. Currently, we are still developing this integrated system while for the time being, we have provided in OSS system a “web form” as a tool for regional governments to notify through OSS system on the investors’ commitments fulfillment.

What are the other obstacles that need to be addressed and how are the efforts made by BKPM to mitigate risks in the future?

As I mentioned before, the OSS system is an integrated system, a single portal system which serves all business license process in Indonesia. So, OSS is a big, complicated yet sophisticated system. We understand that we will face some challenges in implementing the system. Therefore, we should keep developing it so that it can be always updated and provide a good service.

We are now in the process of adding more features to the system, expanding the bandwidth network, enlarging server capacity, providing disaster recovery center, and last but not least, increasing human resources capacity at BKPM and other institutions both at central and regional governments.

Previously, the implementation of the rudimentary OSS service was blamed as the cause of the slight degradation of Indonesia’s EODB ranking in 2019. How do you respond to this?

I don’t think that is the case. OSS system has not been a part of EODB indicators when the survey was undertaken for the 2018 ranking. Instead, for the 2019 ranking, when OSS is included in one of the indicators surveyed, we have the opportunity to improve Indonesia’s position. The World Bank’s EODB demands that we have a single business identity number. Well, it is NIB that can fulfill this.

How do you view the growth prospects of direct investment in Indonesia in the coming years, and how can the OSS service help to make Indonesia’s investment climate better?

Investment realization in Indonesia, for both foreign and domestic investments, continues to grow, from IDR 545.4 trillion in 2015 to IDR 692.8 trillion in 2017. Last year, the figure reached IDR 721.3 trillion.

OSS system will allow business license proses to become easier, simpler, faster and more transparent so it should improve the investment climate in Indonesia. Furthermore, the acceleration of the licensing process is expected to expedite the implementation of investment projects in the pipelines and to attract broader investors to invest in the country.

Are there certain messages you want to convey to the investors, especially related to the use of OSS service?

To all investors, rest assured that the government is now and will keep improving OSS infrastructure and system to meet your and our expectation, to become more and more user-friendly and at the end, to ease business in Indonesia. BKPM, together with the Coordinating Ministry for Economic Affairs, are strengthening coordination, integration, and standardization with both central and regional governments to support OSS system as a single portal web for business license throughout the country.

We believe that all ministries, government institutions, and regional governments have the same spirit and goal to make OSS system succeed, including by assisting you to fulfill commitment after obtaining business licenses. At the same time, we also encourage you to meet the requirements that have become your commitment when receiving licenses in advance.