Bureaucracy in West Java

By Barrie | July 18th, 2007 | No Comments

Doing business in West Java is expected to be simpler and less time consuming with the newly opened integrated service center in provincial capital Bandung. The center, called a one-roof integrated service management unit, will cater to businesspeople in need of permits and other recommendations from the provincial administration.

In practice, businesspeople will receive their required documents in less than 15 days with the new center.
West Java Governor Danny Setiawan said the center would be able to process 51 different types of business permits and recommendations.

Currently, West Java province has the authority to issue 71 different types of permits and recommendations for investment purposes.

The new unit, located in the same office as the Regional Investment and Promotion Board (BPPMD), was officially opened on July 3 by State Minister for Administrative Reforms Taufiq Effendi.

In addition to speeding up services for businesspeople, Danny said the provincial administration has also decided to begin processing 26 selected permits and recommendations free of charge. This is meant to help draw more investors to the province.

“With this post, apart from wanting to create a good relationship with businesspeople and to improve the competency of officials, most of all we want to fight corruption, collusion and nepotism,” the governor said.

Complicated and lengthy procedures for obtaining permits have been blamed for helping to discourage investment in the country, including West Java.

It is common knowledge that one way to speed up the process for issuing permits is to bribe officials.

BPPMD head Ishak Suratman said in its early operation, the new service center would be unable to issue all the permits because it still had to coordinate with related offices.

There are also certain tasks the center cannot handle because it requires approval from the central government.

“We’re still waiting for the central government to shift authority on the issuance of permits for foreign workers and the formation of limited liability companies,” Ishak said.

Among the permits that will be processed free of charges by the center is the permit to extend the employment of foreign workers, the permit for the placement of private company workers, the permit to trade in hazardous substances and the permit to set up schools for disabled students.

Charges still apply, however, to obtain a permit for public transportation routes in the province, which costs between Rp 100,000 and Rp 150,000 a year.

The most expensive fee is to obtain a permit for running a traditional shipping company, which costs Rp 500,000.

Ishak said the new integrated service center was hoped to boost the province’s investment by 15 percent in 2007.

He said West Java saw an increase in investment value from Rp 19 trillion in 2005 to Rp 20 trillion in 2007.

More than 60 percent of investment in the province is foreign investment in the manufacturing industry.

“Hopefully, by making it easier to obtain permits and recommendations, we can secure Rp 22 trillion in investment this year,” Ishak said.

State Minister for Administrative Reforms Taufiq Effendi said during the integrated service center’s opening that similar services were now being provided in more regencies and cities.

In 2005, he said only nine cities and regencies had this type of one-stop investment service. That number increased to 95 in 2006 and 285 so far in 2007.

However, West Java is the only province to provide an integrated one-stop service, he said.

“As far as I know, this kind of post has a significant impact on investment. In Sragen regency (in Central Java), for instance, this type of integrated post has helped raise revenue tenfold.”

Yuli Tri Suwarni